Philanthropy in this economy: Some notes…

For the average consumer/donor,giving is shifting. Cause consumerism was stealing share from donations and actual volunteerism. With the new economy, giving time and skills competes with straight up donations. As unemployment soars, workplace pledges and company matches are dropping off.Micro-philanthropists are shaking things up. High end donors are still giving but with much more caution and to familiar, well-established organizations. Donors want to be engaged- from the moment they give until the money is used.Donors want choices- they want to feel like they have say in how their money is used.


Shifts in Charitable Giving…
A new academic study has interesting ramifications for the world of philanthropy. Behavioral economists Dan Ariely, Anat Bracha and Stephan Meier found that one of the main reasons people give to charity is “image motivation” (Economist.com 1.15.09). That is, they wish to be seen by others as charitable people.

Actual giving
:

Micro-philanthropy:  Less is the new more

Donor as investor: return on social investment= emotional satisfaction

Keeping my money in the community: Giving locally

Beyond the cash: Active donors- money just isn’t enough,

Giving together:  As many as 1,000 giving circles have formed in the past three years to focus on causes their members decide on.

Donor notes:

New philanthropists: Affluent givers, often from the VC sector, who are passionate about their cause and cautious about where their money goes: Gifts include time, skills, strategy consulting and monetary donations.This new breed of philanthropist also wants to be given a clear path in how they can give of their time and skills to create the greatest impact.Many are looking for ways to measure their investments.

Comfort zone: Established charities play on donor need for security and concern in a climate of mistrust (see: AIG, Madoff, etc). Blue Frog surveyed 2000 people 12/08 and  found that 28% of all those interviewed (that include current non-donors) said they were less likely to start supporting a new charity. This rose to 34% amongst those aged 65 and over (and up to 40% amongst those 65+ that described themselves as donors)

Micro Philanthropists (skews younger) : donors who give smaller amounts, want to track the money and connect with end results.

Types of contributions:

With the economy in the trash, we see more empathy from consumers than ever. They believe “we’re all in this together” (against the man) and are concerned about themselves and their neighbors.
Giving DIFFERENTLY
-Consumers are likely to give differently- using different vehicles for giving in the recession (volunteering vs. donating) and being even more thoughtful about where there money goes and how it is used.

-Giving LOCALLY — to organizations that are providing resources in their communities

- Giving with TIME. Renewed volunteerism? Direct volunteerism has been down (as well as direct charitable giving) but with money stretched consumers may return to volunteerism  (family together time, teaching lessons about what’s happening in the economy, internships between jobs and training in order to be ready for job cuts,etc)

-Choosing the cause: Consumers want to FINGERPRINT their cause and they want some CONTROL. See: Tis Best gift card, Subaru Share the Love, Kenneth Cole/Charity, GOOD Magazine (choose your price and your charity).

-New/old causes: We’ve seen April = green…and with hunger/homelessness top of mind, we’ll see more emphasis on these causes throughout the year. (AIDS in Africa and the Rainforest feel FAR away and much less releveant)

-Giving in groups: Mobilization 2.0, pooling funds, texting to give, using facebook cause app, twestivals… giving as we once new it has changed a lot.

1 Response so far »

  1. 1

    i just came across your article and wanted to agree with the micro-philanthropists statements, but add that many of us have always been “MP’s” there’s just more of us now. We’ve become more sensitive to the new additional needs of others who we now know that need our help with their groceries or paying their light bill. We now all live in neighborhoods that have Bank foreclosure signs on their street. So that’s why i see this phrase staying around and because it positively reflects on the many small donors who together do many good deeds. I hope to see more from you on this, thanks. Gary


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