March 1, 2010

Individual Giving Model--real time philanthropic forecasts!

Analysis of philanthropy and giving trends, as a discipline, has been primarily historical in nature. While researchers have gained a general understanding of the impact of certain economic factors on giving overall (income up = giving goes up), there have been very few "real time" models that can incorporate our shifting economic climate and create accurate predictions and forecasts. Rules of thumb and general trend directions lack precision, and with our mercurial economic climate, lack consistency as well.

Here is some interesting research Center on Wealth and Philanthropy at Boston College. They have designed a model to predict individual household giving in as "real time" as we have ever seen. They call it simply the "Individual Giving Model". They have beta tested"the model on previous years and showed formidable accuracy.

The ability to calculate, within any given year, the impact of economic change on giving can be a wonderful tool in our collective tool box. Please give this paper a review and keep an eye on the IGM.

If the IGM proves successful, the next frontier would be to accurately and timely predict participation, not just total dollars.

Household giving expected to fall
February 17, 2010

When all numbers are in, charitable giving by U.S. households is expected to have fallen by as much as 9 percent in 2009 after adjusting for inflation, a new model predicts.

Individual giving typically correlates to income and wealth, and given the continued challenges Americans face, even the rosiest scenario calls for a drop in donations, says the Individual Giving Model, created by the Center on Wealth and Philanthropy at Boston College.

Assuming slower growth during 2009, the model predicts income will drop at an annual rate of 6.4 percent after adjusting for inflation, and that net worth will grow 4.6 percent.

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