Are We There Yet?

Citing the research note issued earlier this week by our own Steven Lawrence (the center's senior director of research), Lucy Bernholz questions whether foundation giving will hold up as well in this economic downturn as it has in past downturns. Lucy thinks not:

I don't think a short-term drop is all we're facing here. I think we're going to see new banking rules, new credit rules, new housing laws, new charitable giving laws, new philanthropic approaches, new tax structures, new public service demands and possibly programs, the heads and tails of important demographic and generational shifts, and lots of other things that will fundamentally resturcture the business if giving as we've come to know it. And I think a drop in giving this year is just the beginning of it....

She may be right. But this is getting into crystal-ball territory, and I'm of the school that believes all we really know is what we know (e.g., giving patterns in the past). Things could get much worse from here -- or the Dow and S&P could jump 25 percent from these levels by year's end, turning a generational crisis into a bad year.

I don't know what's going to happen in the equity or credit markets over the next six to twelve months, and I think many of the things Lucy points to -- new rules and regulations, revisions to the tax code, etc. -- will take much longer than that to play out. By the time they do (if they do), I suspect this crisis will be behind us and our attention will be focused on something else.

What about you? Are things going to get worse before they get better? Or is the worst behind us? Weigh in below -- and feel free to cross-post your comments to Lucy's blog. She's looking for people to disagree with her!

-- Mitch Nauffts