"During the Great Depression, giving rose. Over the past 40 years there have been several recessions, but just one year in which total giving has fallen in America: 1987, the year of the “Black Monday” stockmarket crash."Here's what I want to know - what data show that giving rose during the Great Depression (1929-1942)? It certainly wasn't whatever data source is referenced in the second sentence above, since 'the past 40 years' takes us back to 1968. My sense is that the '40 year' data come from some combination of Giving USA, AAFRC, IUPUI, Foundation Center, and possibly IRS returns.*
But what is the source for the assertion that giving rose during the Great Depression? The Foundation Center didn't exist then (Founded in 1956). Giving USA goes back 50+ years, which still doesn't get us into the 1930s. Is there research, tax data, trend analysis - what is the source or sources for this claim? If you know, please let me know. Thanks.
*Of course, it would be nice if there were actually citations provided for this 40 year trend, but now I've gone and gotten all academic on you.
From what I could find with a quick online search, those who cited a source for this assertion are referring to a National Bureau of Economic Research working paper that shows charitable giving by religious organizations to have risen during the Great Depression (http://www.nd.edu/~dhungerm/Great_Depression.pdf).
I also found a more comprehensive report from the Sharpe Group in 1992 entitled "Philanthropy in Uncertain Times." It indicates overall giving dropped and then rose during the Great Depression, and it seems to be much more thoroughly researched. It relies on two main sources: the 1950 study by F. Emerson Andrews "Philanthropic Giving" and reports from pioneer fundraising consultant John Price Jones whose reports began in 1931.
The combined data show that from 1931-1933 there was a significant drop in giving, followed by a slow but steady increase from 1934-1941 (thereafter followed by a sharp increase from 1941-1948).
The final conclusion is that "Overall, giving trended erratically upward during the Depression..." due to in large part to planned giving as "their deferred income rose at a faster rate than current giving declined."
This (pretty fascinating) second report is available online at http://www.sharpenet.com/resources/pdf/UncertainTimes2.pdf
Awesome comment Jeff! That has to be the best answer to a blogger's question I've seen in a while.
That has to be the best answer to a blogger's question I've seen in quite some time. That second report is amazing.Kudos!
To add to Jeff's comment, when people were talking "depression" in 1991-92, I undertook to research giving during the Great Depression and subsequently published "Philanthropy in Uncertain Times" as a white paper for our clients.
We have recently published two updates to the 1992 report and they may be accessed at www.sharpenet.com. Click on home page "Giving During Depression" link.
According to a landmark work published by F. Emerson Andrews in 1950 that examined giving during the Depression, overall giving adjusted for inflation actually went up from 1929 to 1931 and then dropped about 24% over the next two years, bottoming out in 1933.
Giving then more than doubled between 1933 and 1941, reaching and surpassing pre-depression levels by 1937. The rate of growth for the 8 years between 1933and 1941 has seldom been equalled during any other 8 year period.
Bequests did, indeed, become a much larger percentage of giving during the Depression and accounted for much of the growth. According to IRS and other figures, the percentage of giving from estates was much higher than before or after the Depression.
My conclusion is that giving by the wealthy was most negatively impacted at the beginning of the Depression by declines in investment asset values. Giving by the masses was more influenced by the unemployment rate. The overall drop in giving of 24% pretty much matches the unemployment rate in 1933.
Evidence from contemporary reports in the New York Times based on annual surveys by the precursor of Giving USA is that between 1929 and 1933 major gifts by the wealthy dropped as much as 70%, roughly the same as the stock market decline during that period of time. Giving recovered with employment and the stock markets.
Observers at the time concluded that charitable giving and the demand for it were, in the vocabulary of economists, relatively inelastic. People consider their core giving to religion and other deeply held interests to be more like their utilities than a movie ticket and will cut other things before they reduce their giving. They do, however, tend to focus their giving in areas where the hearts and minds most tend to dwell and are less responsive to gimmicks, arm-twisting and other more aggressive types of fundraising that do not speak to their core beliefs and values.
Giving as a result does not go up in proportion to the level of boom or down in proportion to busts. There is a quote from a leading fundraiser of the time to that effect in one of the reports I reference above on our web site.
IRS data from the period 1923 to 1945 reveals that American taxpayers who continued working during the Depression actually gave higher percentages of their income to charity during the depths of the Depression, presumably when there was greater perception of need.
Americans have always given around 2% of their income to charity. In 1932 that figure peaked at 2.1 percent of reported income. The average amount deducted from tax returns for gifts to charity during the period from 1922 to 1938 was 1.85 percent. It was 1.81 percent from 1922 to 1929 and 1.87 percent during the Depression years 1930 to 1938.
Some have said to me that it is not really possible to predict what will happen today based on the Depression because our society has changed so much since then.
That may be true, but from my perspective we are nation of immigrants who brought philanthropy to America from many cultures and religious traditions based in Judaism, Christianity, Islam and others. Philanthropy, as de Toucqueville noted in his work "Democracy in America" in 1835 was a remarkable ingredient in the "stew" that was the American "melting pot." It may still be so.
We still watch Miracle on 34th Street, White Christmas, It's A Wonderful Life and other movies that we can somehow still relate to from the period during and immediately following the Depression.
Maybe, just maybe, we are not that different from our grandparents and greatgrandparents and the more things change....
Robert F. Sharpe, Jr.
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