Turbulent Times Hit Home
“Fasten your seatbelts, there is rough air ahead”
You don’t know me well yet, but I am a serial entrepreneur, strategic consultant, author, frequent traveler, giver, wife and mom (not necessarily in that order). I fly way too much and even as comfortable as I am with flying, I still wince a bit when there is serious turbulence.
On any given day, you can turn on NPR on the radio or one of the popular news shows on cable and hear the pundits argue the finer points of whether we have just come through a true recession, an economic downturn, or simply a time of uncertainty.
Harry S. Truman said it best.
It’s a recession when your neighbor loses his job. It’s a depression when you lose yours.
Truman was speaking about a turbulent time in our nation’s history, but he could have just as easily been talking about the present day and the rough air that each of us encounter in our own lives and in those of our friends and our loved ones, as well as in the organizations that support the causes that we are passionate about.
So many Americans have lost their jobs. Although many have returned to the work force driving unemployment back to single digits, the fact is the Labor Department doesn’t report on those that are underemployed or business owners that are not eligible for unemployment, but whose businesses are failing due to the downturn. Add in those statistics and the results would be staggering.
Bankruptcy – A new sign of the times
Business and personal bankruptcies are at an all time high. And as an unintended consequence, per capita giving is hitting a new low, yielding truly turbulent times for the philanthropic sector.
One wonders what would happen if those who went through the bankruptcy courts in the past 2 years had to wear a “Scarlet B”, reminiscent of Hester Prynne in Nathaniel Hawthorne’s the Scarlett Letter.
I suspect you would be amazed and even shocked to discover their identities. I will tell you now that it is your friend, your neighbor, your co-worker, an individual in your online network and those that you count on to provide services on a daily basis in your community.
They are not just the people that you help with your philanthropic programs. They are your donors and your volunteers. And they each have their own stories and their own giving ecosystem that is impacted when money becomes scarce.
I know, because I was one of them.
In my own situation, we earned our “B” through what I call my “spectacular business failure” in late 2007, just before the financial crisis began. The travel industry was one of the hardest hit by the economic downturn. I had served this industry through my consulting firm since 1996 and the startup that I launched a decade later provided game changing technology to this same industry.
The details of that venture will provide fodder for a different blog on another day, but suffice it to say that by 2010 we had gone nearly 3 years without regular income, after having invested nearly $1m in cash and pledged assets in the failed business – a recipe for personal financial failure.
When we closed the doors of the company, the impact was not only on our business. The ripple effect impacted our entire ecosystem and those of the 19 people that we had let go, many of which are still severely under-employed.
In our house, first, we stopped getting bottled water delivered. This was a small sacrifice, but a harbinger of what was to come. My husband started doing our lawn and cleaning our own pool and everyone chipped in to clean the house, reducing the amount of revenue to those service people that counted on that monthly income for their livelihood. We pulled the kids out of private school. We no longer went out to eat, or took our clothes to the dry cleaner. We only shopped for essentials and I was no longer able to put together gift bags for the homeless in the surrounding community. We stopped all corporate giving and all extra personal giving. The only thing that survived was our church tithe, which was 10% of a fraction of our previous income.
The air around us was way more than just a little bumpy.
The same stories could be told for the corporate giving of the bottled water company, the private school and the chains that owned the various restaurants we frequented, as well as the personal giving of those that were let go from those businesses during the downturn. I know that our local church was struggling with reduced donations, unable to help those in need. And I strongly suspect that the personal giving of the pool man and yard man, the cleaning people and the dry cleaner to their favorite cause we also measurably down.
Who could have predicted the unintended consequence of our personal cutbacks?
We were not alone in our struggle. In 2010, the US had 1.5 million total bankruptcy filings. Add on those that couldn’t begin to afford bankruptcy proceedings [it is not cheap], and the measure of the financial devastation of families numbers in the tens of millions. Each one felt their own personal turbulence, some of which just lasted a short time, and others who are still facing it today.
If you have not been touched by the crisis on a personal level, I guarantee that you know someone that was. Whatever term you use to describe the past 24 months, if you work with a philanthropic organization, to say that the situation has stifled giving is a gross understatement.
No doubt about it. Individual donations are down; foundation-giving is down and revenue to perform services for the government is down. All of this is hitting at a time when needs are increasing and with the collapse of key European economies imminent, there is no real end in sight to the economic challenges we face.
Life on the other side
In my own situation, the “B” that I wore metaphorically during our bankruptcy now has a new meaning. It now stands for “Blessed”. During our darkest times, we were blessed to be the recipients of generous gifts of love from the most unexpected people. It was also amazing to watch our kids and how they transformed from the “gimme gimme” culture to one of being thankful for the smallest of things.
During that time I taught Dave Ramsey’s Financial Peace University at our church. Dave’s motto is “Live like no one else [e.g. cutting back in order to get out of debt], so you can live like no one else [and give like no one else]”. I remember thinking that I couldn’t wait until we came out on the “other side” so that we too could give like no one else.
Now, over 18 months later, we have experienced a total recovery, emerging stronger than before. But more importantly, we are definitely wiser and absolutely ready to give. To that end, I’ve recently shifted my focus from full time consulting to a new venture where I am able to tap my travel industry expertise, my strategic bent and my desire to give back.
In my next blog, we’ll talk about Integrated Giving and how to expand your thoughts on fund raising and learn how to raise money while you sleep. Sound good?
Stay tuned and please feel free to comment and tell me your personal story about how these turbulent times have hit home for you.