Two weeks ago everything seemed bright on the economic horizon with the stock market moving well and unemployment numbers from April looking better and better all the time. What a difference a fortnight makes.
The news this past week from Wednesday on was not cheerful, and was not bright. Only 58,000 jobs were created over the month of May, well short of the number required to have impact on the unemployment rate. It would take gains of 350,000 per month to truly impact the numbers and lower the unemployment rate, which rose to 9.1% nationally due to more people entering the work force and actively looking for work. There are 7 million fewer people working in our country now, than 2006. That is a sobering thought.
No wonder there is such a lull in economic activity and no wonder there is such caution in spending on the part of those who are working.
In 1992 I took a position with the Sisters of Providence Health System in Springfield, MA and the unemployment rate in Massachusetts at the time was 11%. As we planned our fund raising activities, board members (and others) questioned our strategies; I repeatedly mentioned that we were going to focus on the 89% of the people who were working. During my three years there we increased the number of donors from 600 annually to more than 3,500 annually.
Even now throughout our country, more than 90% of the people are working and being very productive. They are not spending and they are concerned that they may be laid-off or lose their jobs. Debt is being reduced (short term debt continues to shrink) and savings is increasing. Thus the savings rate in America is at an all time high having exceeded the 5% level for 10 consecutive quarters. Currently there is $2.7 trillion (yes…trillion) in money funds in America earning less than .3% annually. This does not count savings accounts, checking accounts or short term certificates of deposit (less than 6 months). There is a tremendous amount of money still sitting on the side lines as people are cautious with their spending. At the current savings rate, the economy will make a fundamental shift at some time – there will come a moment when we shift from being a nation of consumers to a nation of investors. But when is the question.
So in this lull, what should you do to support your organization?
- Stay focused on the needs in the community that your organization is serving
- Continue to ask for gifts that will change people’s lives
- Be bold and confident
- Have a vision for the next 3 to 5 years
- Demonstrate results and success
- Seek community endorsements for the good work you are doing
- Stay close to your donors keeping them informed in a variety of ways
- And continue to seek philanthropic support – last week 3 donors gave our clients significant 7 figure gifts!
These are difficult times still, but over time the difficulties will pass. They always have, and they always will.
All the best,
2 thoughts on “The Economy in a Stall”
Thanks for this little reality check. Often we get discouraged with the state of the economy, but your point is valid – there are still generous people out there who are ready to create an impact. We as fundraisers just need to re-focus and think it through slightly differently. Great blog.
Thanks for your comment. We want life to be simple – and it never is simple. If this was all simplier, we would not be needed.
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