Many programs to assist households who face various problems rely on direct giving by people in businesses. And N.C. State University economist Mike Walden says a struggling economy adversely affects this giving:
If you talk to folks who run charitable organizations, they … know this. About three-fourths of charitable giving is from households. And another 15 percent is from businesses. So obviously when households and businesses are hit by a recession, we would expect to see charitable giving drop, and in fact it does.
If you look at the numbers for the last couple of years and you adjust them for inflation, charitable giving is down from its $325 billion level prior to the recession to about $299 billion today. It’s also dropped as a percentage of … the economy. That’s the bad news. …
The good news is that as we’ve seen the economy improve slightly over the last two years, we’ve also seen these numbers in terms of dollars given and percent of the economy for charitable giving go up. So hopefully there’s light at the end of the tunnel. If the economy does continue to improve, albeit slowly, we’ll see the charitable giving also improve.