The Rabid Capitalist

Professor Glenn A. Okun

Charity begins at home except when it does not. Evidence suggests that financial pressure has affected charitable giving. The consumer has cut back on discretionary expenditures including donations. This is the most recent data indicating that the consumers’ financial health is in decline (see https://therabidcapitalist.com/2023/10/03/consumers-under-pressure/).

According to a poll by Indiana University and Bank of America, 85% of wealthy households made charitable contributions last year, a 3% decline from 2020. Additionally, their average donation decreased from $43,195 in 2020 to $34,917 in 2022.

The current decline in donations likely reflects elevated inflation, economic uncertainty and the disappointing performance of the financial markets. Diminished consumer confidence is now reflected widely throughout the economy (see https://therabidcapitalist.com/2023/09/28/the-consumer-has-been-in-trouble-since-the-second-quarter/, https://therabidcapitalist.com/2023/09/25/morgan-stanley-reiterates-the-rabid-capitalist-s-warning-on-consumer-stocks/, https://therabidcapitalist.com/2023/09/12/consumer-wellness-check-the-big-point/, https://therabidcapitalist.com/2023/09/06/consumer-fatigue/ and https://therabidcapitalist.com/2023/09/05/taking-the-pulse-of-the-consumer-luxury-watches/).

The Rabid Capitalist does not expect the Fed to rescue the consumer. “Higher for longer” rate policy is likely to remain in effect for the foreseeable future.

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