DonorsTrust Vice President Peter Lipsett recently appeared on the John Solomon Reports podcast to discuss how the economy and persistent inflation is affecting individual philanthropy and how the downturn in affecting appreciated-stock donations.
Charities Cash-Strapped Amid Persistent Inflation
“We talked about this a little bit last time I was on—that we saw this inflation coming. We knew it was going to get worse. Since then, it’s only gotten worse—only backed off a little bit. And, as we talked about then, it’s bad for donors because their gift doesn’t go as far,” says Lipsett.
Moreover, those that work at charities nationwide aren’t able to do as much with the dollars they are given compared to previous years because of the unrelenting inflation and price increases consumers are experiencing for goods and services across the board.
“[Inflation] is bad for the organizations [donors] are giving to because the gifts they get don’t go as far and it puts pressure all around and none of that’s changed. Fortunately, people do continue to step up. We continue to see giving kind of on pace with last year,” says Lipsett.
Market Downturn Affecting Gifts of Appreciated Stock
Another blow to charitable giving, however, is the fact that appreciated-stock donations are down because donors are experiencing market losses instead of market gains right now. Stocks are in the red—not green—and that’s having a negative impact on larger donations charities rely on year after year.
“I do hear from some of my nonprofit friends that donors who, say, normally give stock donations, which I’m sure plenty of your listeners like to support organizations that way—donate some stock, give away the capital gains. Great way to give,” says Peter.
“Right now there’s not so much appreciated stock to give away and that makes it a little [trickier]. So, donors who give that way may be holding off or giving less in cash and that just continues to go and, if we don’t see something start to turn around in the next six weeks, I do worry about what that year-end picture is going to be like.”