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Charitable Giving Increase in 2011

February 08, 2012

Is charitable giving a leading indicator of the state of the economy?

According to a recent article in the Wall Street Journal many charities finished 2011 with increased donations over 2010 and 2009, down years in the giving world. What does this mean?

Does it mean that the recession is over? Is charitable giving a leading indicator of the state of the economy? I don’t think so, since charitable giving did not decline until after the recession was well recognized and the lead topic of the nightly news. Charitable donations only declined when people lost their jobs and the rest of us were concerned about suffering a similar fate.

One thing that this information does confirm is that Americans are the most charitable people in the world. In a massive global survey conducted by Charities Aid Foundation of America in 2011 the United States ranks highest in terms of charity. In 2010 the U.S. ranked 5th. The survey results are based on over 150,000 Gallup polling interviews with members of the public in 153 countries.

There were some other interesting items in the WSJ article. It was noted that the Salvation Army’s “Red Kettle” campaign raised $147.6 million up 4% from 2010 and 6% from 2009. One of the big changes in the “Red Kettle” campaign is that the Salvation Army began accepting credit card donations in select markets to allow donors who don’t carry cash to give via credit card. They were able to do this via smart phones and a company called Square – because a little square card reader attaches to your smart phone and allows you to accept credit cards. If you are not yet accepting contributions via credit card you need to do so soon. I just hope my golfing opponents do not hear about this technology!

Another interesting item in the article was the fact that St. Jude Children’s Research Hospital raised more than $64 million in its “Thanks and Giving” campaign. This is where they obtain donations from stores whose cashiers ask retail shoppers if they’d like to donate. Have you thought about asking the merchants in your service area if they would conduct a campaign such as this on your behalf? Contact us to set up a similar program.

The last point I wish to make about this article is that it really highlights the amount of giving that occurs at the end of the year. Some people think this is the result of tax planning on the part of donors. Based on my many years in the tax business, I don’t think it is tax planning as much as it is a time of the year when people are feeling especially charitable. If you want to participate in this charitable time, begin to plan now and realize that the competition is very difficult. Design a campaign that will let you stand out from the crowd.

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