Recessions are scary times for everybody. When the economy declines, uncertainty rises in almost every aspect of business, charity, and life in general. As the US economy heads into a recession driven by the COVID-19 pandemic, there is still an optimistic perspective to take.
One of the most inspiring aspects of Americans is our willingness to lend a hand to those in need. This isn’t limited to times of prosperity. In the chart below, you can see that while recessions obviously do not have positive effects on charitable giving, their negative effects are small.
US Charitable Giving (Recessions in Orange)
Should nonprofits prepare for a recession coming or growing in 2020? While it’s reasonable to expect a slight decrease in funds raised through the current recession, it is important to stay the course during any economic downturns or upswings. It’s also sensible to continue fundraising regardless and to expect to see donations in the ballpark you would have predicted prior to this downturn.
US Charitable Giving as a % of GDP (Recessions in Orange)
Another source of optimism is the historical stability of charitable giving as a percent of GDP. Through recession and growth, giving has fluctuated around 2% of GDP for the last 70 years. Donors will still give at the same rate and support the causes they know need help in good times and bad. Even though we need to prepare for the next recession, nonprofits should rest a little easier knowing that people aren’t going to stop giving regardless of where the economy is or where it is headed.
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