Economic Troubles: Featured Fundraiser Tom McLagan

Here is the last post in the Featured Fundraiser series. If you know of someone that is a good fundraiser let me know and I’d love to include them in a post like this at some point.

How hard will charities be hit by the current uncertainty in our economy?

I think it’s too early to tell. To some degree the financial part of this crisis has impacted the real economy in the form of home foreclosures in the U.S., but the full extent of the ‘real economy’ impact is still unknown, and a new American president’s policies will affect to some extent how the problems will play out. For those of us north of the 49th parallel, we don’t have anything like the credit problems the U.S. does. The main effects on our economy will be as exports to the U.S. dry up as a result of lower demand, which will in turn be a result of a slowdown in the real U.S. economy – and as I say the extent of that slowdown is still indiscernible. This effect on Canada will also be mitigated by two factors: the fact that our dollar has sunk in value – which helps Canadian exporters, and also the fact that oil has dramatically reduced in price. Of course, this hurts our oil industry, and is not good news for our climate. But there is no question that lower oil prices also boost the overall economy both by reducing the price of a key expense of many families and businesses, and, importantly, by dampening inflation.

This is also a tough question because some charities are far more dependent on capital gifts than cash gifts. It’s safe to say that those reliant on gifts of stock are going to feel the pinch much sooner – especially those in the midst of capital campaigns – and I know for a fact that some of them are already feeling it. For those that rely on donors who give out of their income instead of giving out of their investments, the picture is far less gloomy. In fact, there is empirical evidence that some people give more in the midst of hard times because they become more attuned to the needs of others. I have actually witnessed this personally in talking with two major donors very recently, both of whom decided to significantly increase their giving. So all is not lost.

And I would say that even for those reliant on gifts of stock, though there will be some belt-tightening in the near future, brighter times will come – and even sooner in Canada I think. Sad story. I was involved in a small capital campaign that sent out a mailing one day after 9-11-2001. How well do you think that went? But somehow, when all was said and done, the building eventually got put up. The long view is important in these things. I think a lot of us working in charities are long-view people or we wouldn’t be here in the first place. But I’m speaking only for myself…