Higher interest rates seen as spur to new giving

July 16, 2009

Rising interest rates in the face of early signs of a possible economic turnaround could spur new giving by some donors who have reduced their giving since the start of the current recession in early 2008, says the head of a group that promotes giving.

A survey in June by the Charities Aid Foundation found 42 percent of British charities were struggling to deliver services because of the recession.

It also showed low interest rates had reduced contributions and were forcing 45 percent of charities to tap their savings or reserves to deliver essential services, a pattern that further hurt the finances of charities already under fundraising stress.

U.S. charities are experiencing those same trends, the group says, but those pressures could ease soon because of a "widely expected increase in interest rates," CAFAmerica, part of the CAF International Network, says in a statement.

"This will be good news for charities that have been bearing the brunt for months now of recessionary pressures," says Susan Saxon-Harrold, CEO of CAFAmerica.

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