‘Fiscal Cliff’ Standoff Touches Money in Memphis
CEO of the Community Foundation of Greater Memphis Robert Fockler sees what he describes as a “bubble” of charitable giving this year.
Last year, the foundation received $28.9 million in donations. This year, donations inflated to $50.8 million by mid-December, “and we’ve seen significant gifts since then,” said Fockler.
Fockler’s donors are anticipating that there will be some sort of limitation on tax deductions for charitable giving in 2013, so they are trying to give now and take advantage of current tax law. “I think a lot of it has to do with the ‘fiscal cliff,’” Fockler said. “Today [donors] can take a big deduction and they know what they are going to get for it, as opposed to not being sure what 2013 holds.”
As a result, many charities are expecting lean years ahead. “I’m hoping that a net impact on the community will not be greatly changed,” Fockler said, “but that is somewhat wishful thinking.”
The Community Foundation of Greater Memphis counts some of the wealthiest families in Memphis among its donors. Chief Investment Officer for First Tennessee’s Wealth Management Group Gerald Laurain has clients who run the gamut from very wealthy to middle-class, but the “fiscal cliff” negotiations in Washington, D.C., are impacting Laurain’s job, too. “Oh, it affects it on an hour-to-hour basis,” he said.
Laurain doesn’t have a crystal ball, so he doesn’t know what the outcome of those negotiations will be, but he is giving most of his clients the same advice. “Strangely, we are telling people that it is a good time to be investing [in stock].”
Laurain points out that stock prices right now are impacted by the “fiscal cliff” standoff in Washington, D.C., the slowdown in China, and uncertainty in Europe. “The prevailing sentiment is so negative that if nothing goes wrong, there is an opportunity to realize profits on investments,” Laurain said.
“There’s likely to be a lot more volatility as people careen from headline to headline and sound-bite to sound-bite, but the reality is that the economy is still growing slowly,” Laurain said, “and that is probably a good thing for the stock market.”