Eventful year raises concerns over donor fatigue
By Manav Tanneeru
Programming note: Hurricane survivors thank those who came to their aid on American Morning's "Week of Giving," Monday-Friday, 7-10 a.m. ET.
Nearly half of charitable contributions are made during the weeks between Thanksgiving and Christmas.
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(CNN) -- Charities are anxious this holiday season. After an extraordinary year that began with a catastrophic tsunami followed by hurricanes Katrina and Wilma and ended with an earthquake in South Asia that killed thousands, charities worry that donors may not have much left to give.
Americans gave $1.3 billion toward tsunami relief, and donations are approaching $2.2 billion for hurricanes Katrina, Rita and Wilma, which is nearly the same amount given to September 11 charities, according to Evan Goldstein of the industry newsletter Chronicle of Philanthropy.
In contrast, only $13.1 million has been donated toward relief for the victims of the Pakistan earthquake that killed more than 70,000 people in early October.
"It's not the willingness to give," said Diane Swonk, the chief economist of Mesirow Financial, a Chicago, Illinois-based financial services firm. "It's the willingness to give on top of everything else."
Most charities mount their campaign drives from November to December, when donors are more generous and also are looking for tax deductions. Nearly half of charitable contributions are made during the weeks between Thanksgiving and Christmas, according to Charity Navigator, a non-profit organization that evaluates charities.
"We remain optimistic, but I'd be less than honest if I said we weren't anxious," said Janet Durden, the president of the United Way of Northeast Louisiana.
There is evidence, however, that donors will be just as generous toward charities this year as in years past due to a relatively stable economy.
The annual holiday retail spending survey by Deloitte & Touche USA, which polled more than 17,000 consumers, found that 68 percent of holiday shoppers were planning on spending the same or more this year compared to last year.
The survey also said shoppers were likely to give more to charities while spending less on gifts. "I think it's more of a reprioritization," said Pat Conroy, the vice chairman of consumer business industry at Deloitte & Touche.
Consumers placed charitable donations fourth on a list of spending categories, above other priorities such as holiday entertainment and non-gift clothing, the survey showed.
"There is nothing in there that tells me that consumers are tapped, that they're not really going to spend on gifts or charities," Conroy said. "My conclusion is that these people have watched these events and have thought, 'It very well could have been me.' "
A survey published by the National Retail Federation forecast holiday retail sales to increase by 5 percent over last year.
Dawn Johnson, the executive director of the Louisiana Retailers Association, said residents there likely would spend despite the ravages of Hurricane Katrina to, perhaps, gain a sense of normalcy.
"Holiday shopping is going to be an outlet for them," she said, cautioning that it was too early in the season to forecast with confidence. "Thanksgiving is going to tell the tale for Louisiana."
Rick McAllister, the Florida Retail Association president and whose state also was affected by a hurricane this year, agreed. "Holiday shopping is a ritual, something to take their minds off their problems," he said. "I'm fairly certain that they will check off their list of gifts for family and friends. But will they spend as much on themselves?"
Swonk, the economist, cautioned that the numbers predicted an average holiday season, adding that it would look better on paper than it would feel to shoppers.
Economic factors could lead to drastically different experiences for middle- and lower-income shoppers as opposed to upper-income shoppers, Swonk said. High energy costs likely will force middle- and lower-income shoppers to constrain spending, while booming real estate prices and year-end bonuses will enable wealthy households to spend as they like, she said.
"For upper-class households, who usually give the most to charities, this is going to be the best year since 1999," Swonk said, alluding to the waning years of the dot-com boom.
Sandra Miniutti, a spokeswoman for Charity Navigator, expects total charitable donations this year to at least match last year's total of $250 billion.
"The level of giving doesn't change from year to year, it's relatively inelastic," she said. "But the charities on the receiving end this year will be different."
National charities such as the American Red Cross and the United Way may get a larger share of the total than is typical because of the charity drives spurred by the storms and other disasters. About $4 billion was donated to relief organizations that otherwise might not have received it, according to Charity Navigator.
"People were writing checks to the Red Cross in August that they wouldn't normally," Miniutti said. "As a result, I think there will be a funding crisis for local and smaller groups like food banks and animal shelters."
Due to the increased need for funding, Miniutti urged givers to research which charities are the most effective. She also said there are other ways to help beyond donating money.
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