Entertainment, Charity Among Areas Hit as Economy Forces Americans to Cut Back

Faith-based Organizations May Fare Better Than Other Nonprofits

As the new year begins, Americans say they are putting the brakes on spending, including charitable giving, according to a recent Wilson Research Strategies survey commissioned by Dunham+Company.

The greatest single impact of the economy on household budgets is the money being spent on entertainment — 58 percent of respondents say they have reduced this kind of spending. Click here to download full study.

Forty percent of Americans say they have cut back or eliminated what they put into short-term savings accounts, and 33 percent said they had either reduced or stopped putting money into retirement accounts. Only 18 percent said their household budget had not decreased.

But what should be of concern to non-profit organizations is the impact of the economy on charitable giving — 43 percent of respondents said they had either reduced or stopped giving to charity.

“When you look at the data, it is clear that the failing economy has had a very real and direct impact on household budgets, and giving has not escaped that impact,” says Rick Dunham, President and CEO of Dunham+Company, which helps ministries with their fundraising, marketing and media strategies.”

“There’s little doubt that most charities are in for a bit of a rough ride. However, for faith-based charities, I believe the picture is much brighter. The data shows that 81 percent of those who attend religious services more than once a week intend to give the same or more to charity. This is the core donor demographic for religious charities. On average, only 67 percent of their secular counterparts indicated the same.”

The survey indicated that there will continue to be an underlying weakness to charitable giving in 2009, especially among middle-class households. Only 56 percent of Americans said they intended to give the same to charity in the coming year, with 14 percent indicating they intend to give more, and roughly one in four (27 percent) saying they intend to reduce giving.

These findings are similar to those from a September 2008 survey in which 58 percent of the respondents stated they intended to give the same to charity, 8 percent said they intended to increase their giving, and 26 percent said they intended to reduce their giving.

As mentioned earlier, of special concern in 2009 are middle-class households. Forty-one percent indicated they intend to reduce giving in 2009; only 27 percent of the upper class said they intended to do the same.

The breakdown of those who attend religious services more than once a week (about 27 million people) indicated they are much less likely to pull back on their giving in the coming year and do intend to keep giving. Of those surveyed, 60 percent said they intended to keep giving the same in 2009, 21 percent said they intended to give more, and only 17 percent said they intended to reduce their giving.

Regionally, the findings were consistent across the country, except with respondents living in the South, who demonstrated a slightly greater propensity to continue making charitable donations.

“With the ongoing tremors in the economy and with households continuing to pull back on spending, charities are going to have to work that much harder to gain a share of household expenditures,” Dunham said. “While many people are indeed reducing what they spend, including their giving to charity, I believe the survey indicates the majority of Americans who do give, intend to continue giving, especially those who are active religiously. But I believe it is up to charities to make an even more effective case for that support if they expect to weather this economic storm.”

This study was part of Wilson Research Strategies January Omnibus Study of 1,000 adults nationwide. All respondents were contacted via Random Digit Dialing methodology. Interviews were conducted via live telephone interviewer Jan. 16-20, 2009. A sample of 1,000 has a margin of error of +/-3.1 percent at the 95 percent confidence level.

For more information on charitable giving during recessionary times, please visit www.dunhamandcompany.com/economy.

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