Two-thirds of Donors Plan to Cut Back On Charitable Giving Due to Economic Woes

Study shows another 10 percent will stop giving completely

With the volatility of the U.S. stock market, concerns over the debt ceiling, continued high unemployment and the lower U.S. credit rating, nearly 7 in 10 Americans (68 percent) say they will give more sparingly to charity in the coming months, according to a new study conducted by Campbell Rinker on behalf of Dunham+Company. Another 1 in 10 plans to stop giving altogether until the economy gets back on track. View the complete study findings (PDF download). Even though donors are likely to decrease the amount they give, charities can anticipate that individuals loyal to their cause will continue to give, as nearly 8 in 10 donors (78 percent) say they intend to keep financially supporting the charities they have in the past. This is especially true of donors ages 40 to 59, a key demographic, as well as those younger than 40. "The findings of our study are not surprising, but they are a real concern because charities have just started recovering from the worst decline in giving in U.S. history," said Rick Dunham, President and CEO of Dunham+Company and member of The Giving Institute, publisher of Giving USA, the annual report on giving in America. "According to Giving USA 2011, U.S. charitable giving dropped $30 billion annually from 2007 to 2009. Giving recovered slightly in 2010 and has continued to make a comeback in 2011," said Dunham. "But now it looks like charities are in for some more rough waters with the economy in such disarray." Charities will find gaining new donors to be especially challenging as only 2 in 10

respondents (22 percent) said they would consider providing gifts to organizations they have never before supported. The study shows that the more people feel as if the economy is in decline, the more they are unwilling to support another charity. Older donors are extremely skittish about the economy and less willing to take on a new cause. Nearly 9 in 10 people older than 60 are less willing to support a new cause (86 percent) compared to just 64 percent of donors younger than 40. The study also found that donors who give online are more likely to continue to do so than those who don't give online. Only 6 percent say they will stop giving compared to 15 percent of those who don't give online. And they are more likely to cut other expenses before cutting charitable donations (14 percent vs. 9 percent) and say that giving will be one of the last things to eliminate (12 percent vs. 8 percent). Nearly 9 in 10 online donors (85 percent) say they will continue to assist the causes they have supported in the past, compared to only 71 percent of those who don't give online. And those who donate online are nearly twice as likely to begin supporting another charity, compared to donors who do not give online (28 percent vs. 15 percent). "Our research has shown that online donors are more highly educated and have higher household incomes than donors who do not give online," said Dunham. "Charities will do well to focus attention on these donors to maintain their support and to find ways to acquire other donors via the web." The study shows that the top three factors impacting the donor's willingness to give are directly related to the economic climate across the U.S. They are, in order: (1) reduced income due to job loss; (2) the rising cost of personal or living expenses; and (3) uncertainty over the economy. This should be a concern for charities because nearly half (43 percent) of those surveyed believe the economy will continue to decline, with 31 percent saying they believe it will stay the same and only 17 percent feeling the economy will improve. "Since 2008, our research into donor confidence consistently shows that individuals give

more freely when they feel their expenses are under control," noted Dirk Rinker, President of Campbell Rinker, which conducted the study. "Few donors feel that way in this economy. In response, organizations might consider how to empathize with their constituents as they seek to engage and inspire them to maintain their level of support." The study paints a brighter picture for houses of worship, as 95 percent of those who regularly attend religious services plan to continue giving, with one-third of that group indicating they are more willing to give in the coming months. In fact, those in this group are four times more likely to cut back on other expenses to continue donating compared to those who don't attend religious services, and twice as likely to say that giving will be among the last of their expenses to be cut. The study was part of a Campbell Rinker Donor Confidence Survey of 497 adults nationwide who had donated at least $20 to charity in the previous 12 months. All responses were gathered online from August 12-15, 2011. A sample of this size has a margin of error of +/-4.4 percent at the 95 percent confidence level.