Monday, August 10, 2009

First, you actually have to have some money to give.

This chart should make every dayschool, kollel, yeshiva, shul, federation, and charitable organization's executive director sit up and take notice. To this point, everyone has complained about their stagnant or falling wages and rising cost of living, but the charts and graphs of these data don't really show what Americans really have left to spend after their rent, utilities, insurance, taxes and medical bills are paid.

Now there's one that does, and it's really, really depressing to see.



This is the result of wage stagnation, pure and simple. We have 1970s income and 2009 expenses, and there's less and less room between the two for people to have as discretionary spending in their budget.

The average household can barely tread water every month, much less increase their charitable giving (or give anything at all, for that matter). People just can't pay what they don't have for private school tuition and shul memberships, either. Yet these organizations seem to have trouble comprehending the fact of their own budget shortfalls - the money just IS NOT THERE to make them up. Instead of scraping the bottom of the barrel for more donations that are not likely to materialize, expenses are going to have to be slashed - and that may mean some thinking outside the box to downsize and adjust.

Way outside the box.

UPDATE: Don't count on equity loans helping, either.

Bloomberg.com
‘Underwater’ Mortgages to Hit 48%, Deutsche Bank Says
Updated: New York, Aug 10 14:47
By Jody Shenn

Aug. 5 (Bloomberg) -- Almost half of U.S. homeowners with a mortgage are likely to owe more than their properties are worth before the housing recession ends, Deutsche Bank AG said.

The percentage of “underwater” loans may rise to 48 percent, or 25 million homes, as prices drop through the first quarter of 2011, Karen Weaver and Ying Shen, analysts in New York at Deutsche Bank, wrote in a report today...

...Home prices will decline another 14 percent on average, the analysts wrote.


From where they are TODAY, let's make that clear, which is already in the neighborhood of 40% below where they were three years ago - with no end in sight.

Time to plan accordingly.

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