Posted on November 7, 2012

Donations for Sandy Recovery May Affect Holiday Giving Season

Although the unofficial start of the holiday giving season is still a few weeks away, the outpouring of support for the millions affected by Superstorm Sandy could mean a reduction in gifts for other organizations, MarketWatch reports.

It's no secret that people tend to dig a little deeper after a major disaster. For example, the median gift after 9/11, Hurricane Katrina, and the 2011 tsunami in Japan was $50, said Patrick Rooney, executive director of the Center on Philanthropy at Indiana University. Given the sluggish economy, however, some fundraising experts worry that Sandy will shift donor behavior. Indeed, a report from the Center on Philanthropy and the Giving Institute found that in 2011, total charitable contributions by individuals, corporations, and foundations grew only 0.9 percent, in inflation-adjusted dollars, and any increase in 2012 is expected to be similarly modest.

Nonprofit education and arts groups, which tend to receive fewer contributions when money is tight, are particularly vulnerable, and many people could decide to count their donations for Sandy-related recovery efforts toward their annual gifts to big disaster relief organizations, meaning less money for the local chapters of those organizations. What's more, donors who've given to Sandy relief efforts — and may have less to give this holiday season as a result — could be more susceptible to cause marketing pitches from retailers who promise to give a portion of all purchases to charity, Lindsay Nichols, a spokesperson for Guidestar, warns. "We advise people to not necessarily give to those kinds of requests," she added. Instead, donors should look critically at such offers and try to determine how effective the charity benefiting from the effort is, how much it will receive, and when it will receive it.

According to many experts, the most effective way to give is still through a direct contribution to a charity via check or credit card on its Web site. While options for contributing through social media sites, mobile apps, and text messages have expanded, such donations tend to be smaller than those made via check or credit card, IUPUI's Rooney told MarketWatch, and charities often have fixed processing costs, regardless of donation size. "From an efficiency perspective," said Rooney, "it might be better to give fewer gifts but larger dollar amounts."