The document examines how philanthropy and the stock market relate during times of economic crisis. It analyzes 13 major events between 1939-2008 and finds that while the stock market often drops initially after a crisis, it recovers within a year. Philanthropy has increased year-over-year in all but one case, even during recessions and stock market declines. Down markets do not necessarily lead to decreased giving. The data shows philanthropy remains resilient during economic storms.

1. Advancement Partners, Inc. Philanthropy in Economic Slowdowns

2. Background After 9/11 The Center on Philanthropy at Indiana University examined what happened to the US economy and to giving in the years surrounding 13 major events of terrorism, war (or war-like acts) and political or economic crises.

3. Events of War Fall of France 1939-41 Pearl Harbor 1940-41 Korean War 1949-51 Cuban Missile Crisis 1961-63 Bombing of Cambodia 1969-71 Gulf War 1990-92

4. Terrorism, Political & Economic Crises World Trade Center Bombing 1992-94 Oklahoma City Bombing 1994-96 JFK Assassination 1962-64 Nixon resigns 1973-75 Arab Oil Embargo 1972-74 Hunt Silver Crisis 1979-81 Panic of 1987 1986-88

5. Effect The stock market dropped dramatically within 30 days of most of the major crises evaluated.

6. BUT… Within one year, the market had recovered (within 1%) or more than recovered its value in all but three cases: The fall of France The Arab oil embargo The financial panic of 1987

7. The Panic of 1987 One day drop: 18.1% drop in the market 30 days after the panic: Still down 15.6% One year later: Down just 4.9% 1988 Philanthropy: Increase of 7.1%

8. The Stock Market & Philanthropy Year Dow Avg. Change Gifts ($Billions) Change 1980 964 48.63 1981 875 -9% 55.28 14% 1982 1,047 20% 59.11 7% 1983 1,259 20% 63.21 7% 1984 1,212 -4% 68.58 8% 1985 1,547 28% 71.69 5% 1986 1,896 23% 83.25 16% 1987 1,939 2% 82.21 -1% 1988 2,169 12% 88.04 7% 1989 2,753 27% 98.43 12% 1990 2,634 -4% 101.37 3% 1991 3,169 20% 105.01 4% 1992 3,301 4% 110.37 5% 1993 3,754 14% 116.54 6%

9. The Stock Market & Philanthropy Year Dow Avg. Change Gifts ($Billions) Change 1994 3,834 2% 119.18 2% 1995 5,117 33% 124.01 4% 1996 6,448 26% 138.55 12% 1997 7,908 23% 153.77 11% 1998 9,181 16% 172.13 12% 1999 10,878 18% 190.79 11% 2000 10,787 -1% 228.25 20% 2001 10,021 -7% 238.46 4% 2002 8,342 -17% 240.92 1% 2003 10,454 25% 240.72 0% 2004 10,783 3% 245.22 2% 2005 10,717 -1% 260.28 6% 2006 12,463 16% 295.06 13% 2007 13,265 6% 306.39 4%

10. Results Only 1 year in the past 27 that philanthropy has dropped (1987 – 1%) Before we blame it all on the Panic of October…

11. Results 1986 = Giving increased 16% Philanthropy boomed at year-end with the pending tax law change .

12. Results Otherwise, philanthropy has increased from one year to the next, even during years in which the market has dropped.

13. Results Even during the worst decline in the stock market (in 2002, when the Dow dropped 17% and the S&P 500 dropped 23%), philanthropy increased by 1%.

14. Results “ When the economy shows stress, whether it is a recession or not, giving may grow more slowly. It is important to note that giving still grows” .

15. Results “ Before adjusting for inflation, giving has increased an average of 8.4 percent in years without a recession . In years with a recession , giving has increased 6.2 percent (also in current dollars)”. Published by Giving USA Foundation™ and written and researched at the Center on Philanthropy at Indiana University

16. What’s it all mean? Changes in total philanthropy are not directly correlated to changes in the stock market.

17. What’s it all Mean? Total philanthropy appears to weather storms in the stock market with great resiliency and less dramatic fluctuation.

18. Conclusion Philanthropy remains resilient. A strong stock market gives donors confidence in giving, but the opposite is not true. Down markets do not always foretell decreased philanthropy.

19. Fall 1981 Recession Prime rate = 20% Inflation = 10% Mortgage rates = 15% Unemployment = 9+% Charitable giving grew 13% over 1980 (3% inflation adjusted) Published August 2008-National Catholic Development Conference, Dimensions

20. What To Do? Most important: ask for gifts in a clear and focused manner . News reports often focus on negative stories… Data show repeatedly that donors continue to give during a recession or downturn and that nonprofit organizations continue to raise funds successfully. Published by Giving USA Foundation™ and written and researched at the Center on Philanthropy at Indiana University