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Here’s a look at the virtually straight up course of charity in the United States over the course of the last 40 years. Subscribers will notice an uncanny resemblance to the chart of U.S. financial assets that was the lead item in this month’s issue of The Elliott Wave Finanicial Forecast. The upward pitch in the financial assets chart is quite steep over the last two years, but this may also be true for U.S. charity. Totals for 2005 and 2006 are not yet available. Based on 2004’s 5% growth rate, I estimated a jump to $273 billion in total philanthropy in 2006. The article at left suggests this is a conservative estimate. The three-year doubling of volumes handled by consultants since 2002, suggests a surge that may actually resemble the burst in financial assets held by financial institutions. In any case, the long-term rise in both charts represent remarkably persistent uptrends.



Here’s another version in which the annual U.S. charity total is adjusted for inflation by dividing by the CPI. This version fleshes out some of the few hiccups in the uptrend. The only declines are in 1970, 1973-75, 1980, 1987, 1990, 1995 and 2001-03. These are all coincident or slightly behind financial asset declines in 1969, 1973-74, 1977, 1987-88, 1994 and 2002, which are also in line with down years for stocks. So, there’s an unbelieveably tight correlation between the Great Asset Mania and charity, just as Elliott Wave International first suggested in 1999/2000. The urge to “give back” rises with the bull market, but it becomes overwhelming as social mood shifts from up to down. The charts show how the mood supported increased giving in every year of a strongly rising trend, but it was only back in 2000 that philanthropy reached fad status. The final paragraphs of this article and our Socio Times entries of June 16, June 19 and September 20 show that charities are raking in the cash at an even more feverish pitch. 

But as the Bloomberg story suggests giving money away isn’t as easy as it seems. “You can't underestimate how hard it is to give away money well,” says a philanthropy consultant. We agree, but not for the cited reason. The big problem is that just when people are ready to get serious about their fortunes, they have a tendency to evaporate. The rapid approach of such a juncture is evident by the fact that even the most elaborate effort to save the world is now encountering skepticism. A recent Los Angeles Times analysis finds that while the Bill and Melinda Gates Foundation is doing a great deal to fight disease and poverty in Africa, it is also supporting enterprises that are doing just the opposite. The Gates’ investments also include large holdings in the Italian petroleum giant Eni, Royal Dutch Shell, Exxon Mobil, Chevron, and Total of France, which are reputedly big polluters in the same region. The LA Times reveals that “hundreds of flares at oil plants in the Niger Delta have caused an epidemic of bronchitis in adults, and asthma and blurred vision in children. Many of the 250 toxic chemicals in the fumes and soot have long been linked to respiratory disease and cancer." It quotes a local physician, “We're all smokers here, but not with cigarettes.” The coverage foreshadows the social dissension and complex morality that inevitably come with a bear market. As social euphoria fades, the growth in philanthropy and financial assets will surprise the world with a coincident break from their long uptrends. It should be far more persistent than the downward blip that began the new century.