Increase Impact by Waiting for a Recession to Donate or Invest in a Cause.

Investors often talk about the opportunity that comes with a recession. The trick is having the resources in place to capitalize on those opportunities. The same is true for philanthropic investment. When the economy is booming like it is now, costs generally increase and overall suffering, at least financial suffering, generally decreases. The construction industry provides a salient example. Construction is often the hardest and fastest hit of any recession. Right now, many construction companies are working at capacity and prices (along with profits, employment, worker incomes) have been steadily increasing for ten straight years. After the last recession construction prices plummeted as contractors were desperate for work. And at the same time, charitable giving, along with consumer spending, cratered. When the next recession comes, most charities will be in the same position they were in 2008-2009: running out of money and having to retract services.


There was a post few months ago pointing out that charities aren’t doing enough to prepare for recession. This means that charities are squandering their donations by spending them as fast as they get them. When the next recession comes, they’ll be unable to alleviate the added suffering and may be forced to retract services when people need them most and when those services are likely getting more affordable.