Total charitable giving graphed with the Standard & Poor’s 500 Index, 1968–2008
(Adjusted for inflation)

2000

350

1800

1600

S&P 500 (inflation-adjusted)

1400

1200

1000

800

600

400

200

S&P 500 Total giving

300

250

200

150

100

Total charitable giving (inflation-adjusted)

50

0 1968

1973

1978

1983

1988

1993

1998

2003

0 2008

 

Three sources of contributions are linked with stock market values:

Individuals: because higher wealth means more assets to contribute and a greater — sense of financial security;

Foundations: because most foundation assets are invested in stocks; and —

Bequests: because many—although not all—estate assets are securities or are — otherwise linked to stock market values (mutual funds, for example).

This graph shows that changes in giving are associated with changes in the Standard & Poor’s 500 Index. Giving, however, does not necessarily change as dramatically as the stock market does in any one year. The stock market values used are for the last trading day of the year.

From 1972 to 1974, when the market fell from above 600 to around 300 (adjusted for inflation) or 51 percent, total giving fell 7 percent.

Similarly, from 2000 through 2002, the market fell from above 1650 to just over 1052 (a drop of 36 percent), and giving declined just 3 percent.

The same trend appears in 2008. The stock market dropped precipitously (- 40 percent for the Standard & Poor’s 500 Index and a drop of 37 percent for the Dow Jones Industrial Average), and giving declined an estimated 5. 7 percent adjusted for inflation.