The Quiet Cost of Inflation
I do not buy the groceries in our house. I do not pay most of the family bills. I am not the person comparing the price of milk this week to what it cost three months ago. For that reason, I have probably been somewhat insulated from the daily experience of inflation.
Recently, I tried to book a basic flight to a larger city. Nothing exotic. Nothing international. Nothing involving first class or a complicated itinerary. The cost was more than $800.
I stared at the screen for a moment thinking I had done something wrong.
Then there is Friday night dinner. We have places we go regularly. Same restaurant. Same type of food. Same general routine. A dinner that used to cost around $40 is now more than $60. The experience did not change. The food did not suddenly become extraordinary. The bill simply got larger.
I notice it when I balance our monthly accounts. I may not be the person paying each individual bill, but when I look at the totals, there is no question that more money is going out for many of the same things.
One experience caught my attention even more. I picked up a prescription recently and the pharmacist told me the price had increased—some but not crazy. Then came the question: “Is that okay?” It was the way the question was asked that stayed with me. The pharmacist was not simply explaining the price. The question sounded practiced, as if it had become necessary because enough people were standing at that same counter and saying, “No. I cannot afford that.” That is when inflation becomes something different than a statistic reported on the evening news.
I am also hearing about it from nonprofit clients. Annual fund donors who have given consistently for years are disappearing. Some are reducing their gifts. Others are skipping a year. Organizations are trying to determine whether donor behavior has changed, whether their messaging is wrong, or whether there is some larger problem with engagement.
In some cases, the answer may be much simpler. They may still have jobs. They may still own their homes. They may still appear financially comfortable from the outside. But the accumulation of higher grocery bills, insurance premiums, restaurant costs, travel expenses, medical bills, utilities, and everything else begins to change behavior.
Philanthropy lives within that reality. I did two podcasts on this 4 years ago, with details of what this means in the philanthropic space…
Episode 92: Inflation and Philanthropy - Understanding the Challenges, Part 1 https://www.hallettphilanthropy.com/podcast/episode-92-inflation-and-philanthropy-understanding-the-challenges-part-1?rq=inflation
Episode 93: Inflation and Philanthropy - Creative Solutions to Inflation Fundraising Part 2 https://www.hallettphilanthropy.com/podcast/inflation-and-philanthropy-part-2?rq=inflation
Fundraisers cannot assume that a donor who gave $1,000 last year can comfortably give $1,000 this year. We cannot immediately interpret a smaller gift as declining loyalty. And we should be careful about labeling someone a “lapsed donor” when the real story may be sitting in their kitchen, pharmacy, credit card statement, or monthly budget.
There is a tendency in fundraising to study donor behavior through our own institutional lens.
Sometimes we need to look outside it. Because people may be carrying more financial stress than we know.
