Wednesday, October 15, 2008

Trickle Down Theory

Today I am joining thousands of others by writing this post for Blog Action Day. The theme for 2008 is poverty. The idea behind this movement is to get as many people as possible to blog about poverty on this day in order to raise awareness and move toward viable solutions. I don't know if the organizers chose this theme in light of the current economic conditions, or if it is a very ironic coincidence.

Obviously the current economic downturn is going to affect how non-profits do business, just like it is affecting for profit businesses. I am hearing about cutbacks in services and personnel at non-profits because of the economy. As discussed in the last Take It For Granted post titled "The Economy and Reality" I cited an article from the New York Times that discussed how the assets from the foundations that were set up by Lehman Brothers, AIG and others have plummeted.

The majority of foundations in America have a large portion of their investments in the stock market. When foundation assets decline, foundations give less to organizations. When organizations receive less funding, they cut back on services.

This means that the impoverished, and I don't mean just cash poor people, but others who will loose their health care, or jobs, and the hungry will all loose out. For some people, they will be worse off than when they started receiving services from the non-profit organization that can no longer for example-help pay for childcare services. That single mom will loose her job due to lack of child care and then her car will be repossessed and she will be unable to find another job. She will be right back in to the cycle of poverty that she is so desperately trying to escape.

It looks like President Reagan's trickle down economic theory really is true. Only in this case the poor will just get poorer and the executives at the bankrupt businesses will get their millions in severance pay and bonuses.

Thursday, October 02, 2008

The Economy and Reality

It seems as if the whole world is on edge the past few weeks due to the spiraling economic conditions in the U.S. I don't believe it is the end of the world, but I do think that the current events will have a negative impact on charitable giving in the immediate and foreseeable future.

Finally, someone with teeth agrees with me. Check out this NY Times article titled "Economy Expected to Take a Toll on Charitable Giving" I believe the most interesting point in this article is the vastness of the ripples that each of the bankrupted/overtaken corporations (or their foundations) will have on non-profits that serve communities of people.

Stay tuned for more...