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How is the current economy affecting nonprofits?

June 5, 2009

An article written by Amina Evangelista Swanepoel, entitled, “U.S. Philanthropy and the Global Economic Crisis” found on the PhilanTopic blog writes about how nonprofit organizations and charitable giving around the world are being affected by the current economic situation in the US.

It is no surprise that several nonprofit organizations (especially the smaller ones which depend on US aid) have closed and announced bankruptcy due to a decrease in US giving.

As the US economy has slowed down, the needs of domestic populations affected by the recession have increased. It was but natural that US charitable foundations and private foundations have focused more on domestic giving. Consequently, international giving has suffered and continues to do so.  In fact, it is projected that private foreign aid could fall by as much as $1 billion.

Even though the focus of giving has shifted, we must not lose sight of the bigger picture. Social issues like economic problems require a global solution. We must not lose sight of the most vulnerable institutions in the world. Charitable foundations in wealthy countries like the US can have devastating effects on poor countries if they cut back their support. Most definitely, the smaller charitable institutions would not survive without support from foundations with bigger endowments.

A small donation to international NGO’s in less developed countries can certainly go a long way. For example, The Dalit Foundation, a nonprofit NGO profiled in the article, continues to provide support to millions of “untouchables” who have been marginalized for decades in India – this support is possible because of international charity.

It is imperative that we do not forget charitable institutions in other countries during these times.

– P

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