As the economy suffers, charities naturally anticipate a drop in income. But a given charity's dependence on the economy's ups and downs varies widely.
Charitable organizations as a whole will suffer in proportion to the rest of the economy. For instance, if the U.S. gross domestic product (GDP) drops by 2 percent, charity income will likely drop about 1.4 percent, says Arthur C. Brooks, president of the American Enterprise Institute and author of Who Really Cares? The Surprising Truth about Compassionate Conservatism.
But some nonprofit organizations—soup kitchens, the Salvation Army, and others that work with the poor directly—actually receive more money during a recession, Brooks says, because donors are more aware of recipients' heightened needs.
Giving to secular organizations drops more than the drop in gdp, while giving to religious organizations typically drops less. Those hit hardest are secular nonprofits dependent on large donations, such as symphony orchestras and environmental charities.
Donors also react differently to a recession, Brooks says. Religious donors, who in general give four times more annually than secular donors, are far less likely than their secular counterparts to stop giving in a bad economy.
"There are all kinds of reasons that people give, from the sense of society or of community to a warm glow to religious observance to purely economic motivations to publicity," Brooks told ct. "But what you find is that religious people tend to give under all different circumstances, because they believe they are speaking to a higher authority than just what's going on with their 401(k)."
All of this means good news for churches.
Historically, church giving tends to stay level for the first year ...1
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