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Bad Economic News? Maybe Not!

These days it’s not hard to find bad news about the economy. It’s a much bigger challenge to avoid it. But planned giving fundraisers might want to look a little more closely at some of that gloomy stuff because it could be there’s a silver lining in them thar clouds…

Case in point: The main consumer spending metric utilized by the commerce department – known as “personal consumption expenditure” – is showing only a modest .2% growth rate this year. And that’s considered a pretty weak rebound compared to past post-recession growth rates.

What’s more (if that’s the word), analysts are seeing an odd pattern in American consumer spending: We’re spending more of our money on “luxury” items than we are on mass-market, economy merchandise. In general terms this means the Neiman Marcuses are outperforming the Wal-Marts.

According to a Financial Times online story, for example, the luxury jewelry retailer Tiffany’s is doing much better business than the economy jeweler Zale’s.

And that seems counter-intuitive, doesn’t it?

What’s going on?

Even if we had the answer to that question, it’s not really what this post is about. What we’re interested in is how this high-ticket versus low-rent dichotomy can influence donor behavior in terms of planned giving. And we suspect it’s actually good news for PG fundraisers.

Consider: The current slowdown in consumer buying on the economy end of the spectrum would tend to indicate that cash gifts – smaller annual fund giving, for example – may have to fight an uphill battle in this economic climate.

On the other hand, the higher-value gifts closest to the planned giving fundraiser’s heart – appreciated securities, paid-up insurance, real estate, etc. – may be precisely what current conditions predispose donors to part with.

It has been said before that the present-day economy means there’s never been a better time for planned giving.

We agree. And we think this “bad news” about consumer spending tendencies is just further proof.

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