Does a Bad Economy Hurt Fundraising? Part 1 of 4

We have a new topic today. It concerns the flagging economy. First in Michigan, with the auto makers, and now across the country, we have an economy sorely in need of repair, thanks to selfish and overreaching business interests getting out of control and being able to influence Congress to the point where we have little if any in the way of regulatory restraints to keep them in bounds.

In the past year, I have received many inquiries from clients and others about whether the slow economy, particularly slow here in Michigan, hurts fundraising. The most recent of these inquiries came in November from a prominent reporter for a business publication who was doing an article on philanthropy matters locally.

The proposition was this: "There are so many capital campaigns going on right now, but will a slow economy hurt these efforts? Shouldn't these nonprofits wait until we have improved economic circumstances? Are there more campaigns going on than there is money to fund them?"

My response to this was that philanthropy is not like a pizza. A pizza is a finite, unexpandable entity. You slice it up. When you eat all the slices, the pie is gone. If there are 8 pieces of pizza and Joe has three, Bill and Mary can't each have 3 pieces. Three people can't divide an 8-piece pizza evenly.

That's great for pizza, but that's not what philanthropy is. Many people I've talked to over the years, especially a lot of Board members of nonprofits, seem to assume that if there are "too many charities in town" then there just can't be enough money available to be donated by the local populace for all of them to survive and thrive.

But that's just not the case. Philanthropy is like an amoeba. An amoeba reaches out to where the food is, forms itself around the food, then ingests it. Philanthropy -- the love of humankind -- is similar: it grows out toward the "food" of good ideas; the more good, compelling ideas to give that there are out there in the marketplace, the more the "amoeba" of philanthropy thrives. The more compelling reasons there are to give, the more great and wonderful programs that really help people and achieve the ideals we all generally share about the advancement of humankind, the more people are willing to give to those ideas.

Conversely, when there is a paucity of food, the amoeba shrinks up and, eventually, dies. Similarly with philanthropy, to the degree there is a shortage of compelling and motivating ideas happening in an area's nonprofits, when all is more or less ho-hum and same-ole-same-ole, that is the degree to which more and more people find excuses not to give. They become disinterested. Or they flock to the nonprofit that has the most compelling case for support and the one that gets the best results.

So philanthropy is like an amoeba. We'll continue this tomorrow.