Charities are anticipating declines in giving this year as a result of the weakening economy. Will the declines be severe? An article in the January 2009 issue of Trusts & Estates puts our current conditions in perspective with an analysis of historical data. Researchers John J. Havens and Paul G. Schervish look at one scenario: What if the stock market stayed at 30% below the levels seen at the beginning of 2008?
Based on their examination of previous recessions, Schervish and Havens forecast a 3-4% decline in individual giving in 2008 and a drop by the same amount in 2009. One key point in the article is that wealth does not decline at the same rate as the stock market, especially when households are have diversified portfolios.
Read more about their analysis in their article “Giving in Today’s Economy: What Can We Expect?”
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