The current economic downturn and market turmoil is set to drive down philanthropic giving in the months ahead, but is unlikely to have a long-term impact, according to Joan Blight, a senior consultant at Strategic Philanthropy Inc.

“It’s not going to have a huge impact. It will in the short term, without question, but I don’t think it will in the long term,” said Blight at a conference on philanthropy in Oakville, Ont. on Thursday.

Economic downturns in recent decades have proven to reduce the level of giving temporarily, but do not correlate with declines in long-term levels of giving.

The U.S. economic downturn between 1999 and 2002, for instance, saw average household wealth drop by 15% to 20% — the largest downturn in wealth since the 1930s. In the same period, philanthropic contributions fell by a lesser amount, at 10%, according to Blight.

She added that once household wealth began to grow again following the downturn, contributions also rebounded.

Furthermore, despite recent market turmoil, this country has experienced a significant rise in wealth in recent years that will boost levels of philanthropic giving going forward, according to Keith Thomson, managing director of Stonegate Private Counsel LP.

He pointed to the fact that Canadian economy grew 93% between 1981 and 2005.

“There is so much more wealth than there was a decade or two decades ago,” he said, adding that three quarters of the wealth is held by Canadians aged 55 and up.

As these Canadians age, wealth valued between $1 trillion and $3 trillion will transfer between generations, said Thomson. Within this amount, the component going to charity could range anywhere from $150 billion to $625 billion, he added.

“We are about to go into the golden age of philanthropic giving,” Thomson said.

IE