Wednesday, April 14, 2010

A Trend Towards Longer-Term Giving

According to the Wall Street Journal, the recent economic crisis has helped people to focus on long-term change rather than donating to the cause de jure.  This trend is due partially to governments’ diminished ability to sustain charitable programs; and partially to the improved availability of information to the public on charities’ long term needs.

The reduction in availability of government funds requires a major shift in donor thinking.  Traditionally, a foundation might provide a grant to get a charity going on the assumption that the charity would thereafter sustain itself through other contributions and government funding.  As these other sources of funding dry up, foundations are looking at more long-term relationships with the charities that they fund and pursuing approaches such as promising continued funding to charities that have a sustainability plan in place.

The increase in longer-term funding is also a product of the increased availability of information to donors.  The internet provides donors with a wide range of metrics that enable them to pick and choose where their money goes based on a charity’s performance.  The other side of this coin is an increased knowledge base among charities on how to get their message out and an improved ability to show the long-term effects of their work, and their future plans.

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