One Back

Will charities and non-profit organizations have trouble raising money this year because of the financial crisis?  And if the U.S. falls into a lengthy recession, will that affect next year’s ability to operate non-profit businesses?

Those are questions that NPR recently examined, interviewing many non-profit and corporate represetatives to try and understand how the nation’s economic climate impacts non-profit operating budgets.   If you run a charity or non-profit organization, then you depend on the philanthropy and gift-giving of both individuals and corporations.  In challenging economic times, it’s not surprising that financial donations are reduced.

From an individual perspective, it makes sense.  If you’re struggling with a budget at home, cutting back means a little bit everywhere.  I certainly applaud those who try very hard to keep giving to charity even while they’re struggling financially at home.  One of the keystones to philanthropy in America however is that the greatest amount of financial assistance usually comes from the wealthy and bigger corporations in local communities. 

One example: Washington Mutual Bank, that was taken over by the FDIC and sold to J.P. Morgan used to give over $50 million dollars each year to the local community in the Seattle area to help with homelessness, kids and community outreach.  Will J.P. Morgan continue to provide such enormous charitable donations?  They’re closing over 400 branches and are sure to conduct extensive layoffs.  More importantly, they have little allegiance to the west coast since they’re an east coast bank, formerly the giant investment institution.  It is doubtful that they will consider a similar degree of philanthrophy which is a shame. 

I have another concern.  In recent years, opponents to “globalization” have taken a politically charged viewpoint that large corporations are the enemy, or institutions to be feared.  They have been blamed for everything from global warming, to poverty and to making slaves out of their employees.  And there may be aspects of truth depending upon what part of the world those corporations have operations or factories in.  But demonizing the corporation devalues the positive aspects of what that corporation brings to society, and in my view makes it less likely to achieve necessary reforms.

Many communities are also now realizing is that these large corporation not only are the largest donors from a philanthropic perspective, but that the jobs and services they support have immense value for that community and the state or region in which they are based.  When a company like Washington Mutual goes bankrupt or is sold to another company, all of those relationships change.  And the communities may later suffer without the jobs, services and charitable outreach that once existed.

I believe one of the basic strengths of capitalism begetting jobs growth is the support it provides to people and communities in a myriad of positive ways.  Rather than finding out the hard way how important these corporations are to a local region, we must find a way to balance corporate profits and community conscience.  They are not as bad as anyone might make them out to be, nor are they perfect citizens. But business and corporate development are necessary essentials to growth, and as we are realizing more than ever before, they are essential to a vast array of charitable community services and outreach support.  Let’s work with businesses in our local communities to improve relationships and philanthropic goals, and work with state and local government in order to foster strong business growth. 

Something we must not forget is that in times of great financial challenge it is those at the margin of economic struggle that suffer the most.  Those living in poverty and near the margins of poverty such as the elderly and children are challenged greatly in the best of times, and we must remember to support those organizations and community structures.

Filed under: Donations, Promoting Change