Nonprofit giving has declined by $65 billion since 2021. However, institutions are not the only ones pulling back. Consumers are also less enthusiastic about gift-giving. Are we becoming a nation of Scrooges?
Americans gave a record $592.5 billion to charity in 2024. That sounds like a lot, but surveys find that over the last 20 years, the number of Americans donating to charity dropped from about two-thirds to under half in recent years. As a result, wealthy individuals, corporations, and foundations are making up the difference; however, even they are slowing down in their gift-giving.
The reasons are many. The tax laws changed back in 2017, and the Tax Cuts and Jobs Act doubled the standard deduction. That decreased the number of households that itemize their deductions. Practically overnight, millions of middle-class families lost their tax incentive to donate. As a result, giving to charities became less rewarding for many everyday givers. Those in the middle of the income distribution claiming a deduction for charitable giving fell by two-thirds.
You would think that, with the stock market and real estate gains nearing all-time highs, affluent Americans would be giving more to charities. A Bank of America Study of Philanthropy found the opposite. Last year, only 81 percent of high-net-worth households gave to charities compared to 91 percent in 2015.
Several key factors, in addition to taxes, are contributing to this trend. The economy, a perennially significant factor, is currently casting a shadow of uncertainty over charitable giving. When people feel uncertain of the future, when inflation is high, and volatility is heightened, charitable giving falters. The present divisions within the nation have also contributed to this hesitation.
Many of today's business donors also believe that nonprofits, overall (especially in education), are no longer aligned with their values. The present administration's attack on much of the education system only heightens this belief. Over the last few years of cultural strife, we have seen institutions forced to rename buildings, remove faculty positions funded by endowments, and even distance themselves from past donors who no longer align with the political or ideological landscape.
From a demographic point of view, the trend among America's wealthiest donors is gradually becoming more conservative, more center-right, if you will. This shift is a function of generational wealth transfers as Baby Boomers fade and Millennials rise to wealth and power in their place, significantly altering the landscape of charitable giving.
However, it is not only the wealthy who are adopting a frugal approach. The pervasive impact of inflation is affecting the costs of everything from birthday gifts to the amount you tip at your favorite restaurant. In a recent survey by Empower, a retirement planning firm, 75 percent of respondents reported that gifts are more expensive due to inflation and tariffs, shedding light on the financial pressures faced by donors.
More than half say gifting is over the top, and almost as many complain of gift fatigue. Once again, it is the Millennials who want to institute a no-gifts policy in 2025 among all their acquaintances. Those who still gift say they shop for gifts based on price, with 58 percent of them setting a budget for gifts. Today's range for giving a birthday gift is $56 for adults and $83 for kids, while children's allowances per week are now $37.
Tipping for takeout dinners, food deliveries, beauty services, and rideshares has also declined according to the survey by more than 10 percent. Whether consumers are becoming more miserly or simply adjusting to tighter economic circumstances remains to be seen. As for the wealthy, future charitable contributions will depend on how quickly recipients of philanthropy adjust to their goals and objectives to meet the rising tide of populism.
Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at bill@schmicksretiredinvestor.com.
Anyone seeking individualized investment advice should contact a qualified investment adviser. None of the information presented in this article is intended to be and should not be construed as an endorsement of OPI, Inc. or a solicitation to become a client of OPI. The reader should not assume that any strategies or specific investments discussed are employed, bought, sold, or held by OPI. Investments in securities are not insured, protected, or guaranteed and may result in loss of income and/or principal. This communication may include opinions and forward-looking statements, and we can give no assurance that such beliefs and expectations will prove to be correct. Investments in securities are not insured, protected, or guaranteed and may result in loss of income and/or principal. This communication may include opinions and forward-looking statements, and we can give no assurance that such beliefs and expectations will prove to be correct.
"Short-term volatility is greatest at turning points and diminishes as a trend becomes established," wrote George Soros in his book The Alchemy of Finance. Last week, I warned investors to expect volatility. We have had that in spades.
Verbal threats from both sides before the upcoming China-U.S. trade negotiations led to stocks whipsawing in both directions for most of the week. The continued government shutdown didn't help matters either, but it was two small regional banks that spooked investors most.
Concerns about credit among two regional banks, Zions Bancorp and Western Alliance, triggered an overnight sell-off on Thursday into Friday. Both companies were victims of fraud in the distressed commercial real estate market. This sparked concerns that other banks may also be victims.
In the meantime, China and the U.S. traded accusations, but don't get carried away by threats and counter-threats. It is reminiscent of Trump's first term and is all part of the positioning game ahead of the meeting between Presidents Xi and Trump at the APEC meeting in two weeks. I won't bother to regurgitate a list of the he said, they-said jawboning that had freaked-out traders booking appointments with their therapists.
Suffice it to say, most of the acrimony centered on China's near-monopoly position on strategic metals used in everything from fighter jets to cell phones. As an example, just this week, the Defense Department canceled a tender offer to purchase $500 million worth of cobalt over a five-year period. There were no bidders.
It was the first attempt to acquire this strategic metal since 1990. Cobalt is used in rechargeable batteries, magnets, and military systems. Beijing dominates cobalt processing and has built a significant stockpile. In comparison, threatening to limit our exports of cooking oil to China seems ineffective. In any case, I expect more of the same as we approach the meeting of the minds at the end of October.
The government shutdown, now the third longest in history, is dragging on with both sides digging in their heels and refusing to talk, let alone compromise. This week, we missed the most recent unemployment claims data, the Producer Price Index, and several other key macroeconomic data points. That leaves day traders in charge, with headlines providing the primary trigger for buying and selling.
Headlines like "Thousands of Treasury, HHS employees fired" got the juices flowing on the downside. "Court blocks Trump administration's latest mass layoffs" was also good for a few points on the upside.
Yes, the administration has taken advantage of the federal furloughs. The Office of Management and Budget has fired thousands of government employees. They have also transferred billions in federal funds away from what Donald Trump termed "Democrat programs" and infrastructure projects in blue states.
I had hoped the shutdown would have been over by now, given the need to ensure paychecks for the military, but Trump found funds to cover that Oct.15 deadline. The President's recent moves have bypassed Congress, raising questions about who holds the 'power of the purse' in government.
How much of these actions will survive the jurisdiction of the courts is questionable. A federal judge in San Francisco has already placed a hold on the government's firings, and many of these unilateral actions are likely to be overturned. However, the attempt to do so makes good copy for the President's base and may repair his failed attempt at cutting government headcount through the use of DOGE.
Given the sage advice of Mr. Soros, it has become abundantly clear to me that volatility is increasing at an exponential rate. From a low of 15, risk, as measured by the volatility Index (VIX), has jumped to 23.37 in less than a month. That is a 48 percent increase.
During that time, safe-haven assets like gold gained more than 16 percent, while the yield on the 10-year U.S. Treasury bond fell below 4 percent. On the other hand, Bitcoin, a leading risk asset, fell 8.8 percent. During the same period, the S&P 500 Index appears unable to surpass the 6,750 level. As the month progresses, the risk of a further pullback in the equity averages seems highly probable.
Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at bill@schmicksretiredinvestor.com.
Anyone seeking individualized investment advice should contact a qualified investment adviser. None of the information presented in this article is intended to be and should not be construed as an endorsement of OPI, Inc. or a solicitation to become a client of OPI. The reader should not assume that any strategies or specific investments discussed are employed, bought, sold, or held by OPI. Investments in securities are not insured, protected, or guaranteed and may result in loss of income and/or principal. This communication may include opinions and forward-looking statements, and we can give no assurance that such beliefs and expectations will prove to be correct. Investments in securities are not insured, protected, or guaranteed and may result in loss of income and/or principal. This communication may include opinions and forward-looking statements, and we can give no assurance that such beliefs and expectations will prove to be correct.
On Friday, Oct. 10, just ninety minutes before President Trump took to social media threatening 100 percent tariffs on China, two anonymous accounts placed bets that cryptocurrencies would fall in the short term. By the end of the day, the cryptocurrency market had plunged $19 billion, resulting in a $160 million gain for those traders.
The plot thickens. Sunday night, before the futures market opened, the president took to the airways again, this time calming fears over a trade war with China. When markets opened on Monday and cryptocurrencies were skyrocketing higher, the same account placed a fresh short bet, this time for $160 million, that crypto would fall even further. Tuesday, after China upped the ante in its trade spat with the U.S., crypto crashed again.
Either someone is extraordinarily lucky or prescient. Traders were quick to accuse this anonymous account of insider trading. Is this just a case of bad feelings, envy, or is there something fishy going on in the markets? Obviously, there is no conclusive evidence of insider trading, and even if there were, it is harder to prove and prosecute in the lightly regulated cryptocurrency market.
This is not the first time this has happened. Front-running important news has become a lucrative pastime this year. A week before Liberation Day on April 2, a key official who shapes the Trump administration's trade policy sold off $30,000 worth of stock. Two days before that ill-fated day, a state department official sold $50,000 in stock. Readers may recall that the stock market plunged dramatically after President Trump's reciprocal tariff announcements. More than a dozen U.S. officials in total sold stocks before the announcement that sent stocks plunging that day.
Democrats were quick to accuse the White House of insider trading, demanding an investigation into all the transactions by staffers leading up to April 2. Kush Desai, a spokesperson for the administration, argued that they should instead investigate their own Nanci Pelosi if they were interested in an insider trading probe.
The Democrats' accusations are a proverbial case of the pot calling the kettle black. Members of Congress of both parties are permitted to trade stocks, and almost all of them own shares in publicly traded companies. Congressional lawmakers have access to nonpublic information that has been shown to move markets, individual stocks, and sectors. A New York Times investigation found that 18% of congressional members trade stocks in industries related to the work of the congressional committees on which they serve. Talk about a conflict of interest!
There are laws in place that prevent front-running and insider trading. The Securities Exchange Act of 1934 aimed to prevent insider trading on the stock market by mandating disclosures; however, this requirement did not apply to members of Congress. The STOCK Act, passed in 2012, partially closed that loophole. It requires Congress to disclose stock trades of more than $1,000 within 30 days. Penalties for failing to do so are a mere $200 for a first-time violation.
And guess who investigates legislators' violations—Congress. The proceedings are private, and enforcement is inconsistent at best. Insider abuse is so well-known that there are at least six internet services that track congressional stock trading, and at least one that tracks Nanci Pelosi's stock picks daily. If you ever wondered how elected officials manage to acquire vast fortunes on their congressional salary, now you know.
Regarding the accusations against the Trump administration, a research paper by Paul Odin, Assistant Professor of Law, published in the Oxford Business Law Blog, argues that, under the definition of market manipulation as outlined in the 1934 Act, neither Trump nor his team violated the law. As for insider trading under the Stock Act, "theoretically," Trump may have been in breach of its provisions. That would be difficult to prove, and in any case, he is protected by presidential immunity.
The facts are that no sanction for insider trading has ever been imposed under the Stock Act, and given Congress's track record, it is unlikely that it ever will. The president has stated publicly that he has not engaged in insider trading, but he admitted that he cannot definitively claim that members of his administration have not.
A recent poll found that 7 in 10 Americans hold unfavorable views of Congress, and a majority of both Republican and Democratic voters support a ban on congressional stock trading. Leaders from both parties, including President Trump and President Biden, House Speaker Mike Johnson, Minority Leader Hakeem Jeffries, Congresswoman Nanci Pelosi, and Treasury Secretary Scott Bessent, support some form of a ban on congressional stock trading. So far, no legislation has crossed the finish line.
As for the mysterious whale that cleaned up in the crypto market, it is doubtful any action will be pursued. The truth is that leaking information to players in the financial markets and other insider trading schemes have been in existence for longer than anyone can remember. Have you ever noticed that markets sometimes rise or fall substantially in the hours leading up to the announcement of a significant economic data point? The same can be said for stocks, and lately, even sectors, more often than I would like to see. It is hard to imagine, given this golden age of grift, that curbs on these illegal practices will be forthcoming anytime soon.
Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at bill@schmicksretiredinvestor.com.
Anyone seeking individualized investment advice should contact a qualified investment adviser. None of the information presented in this article is intended to be and should not be construed as an endorsement of OPI, Inc. or a solicitation to become a client of OPI. The reader should not assume that any strategies or specific investments discussed are employed, bought, sold, or held by OPI. Investments in securities are not insured, protected, or guaranteed and may result in loss of income and/or principal. This communication may include opinions and forward-looking statements, and we can give no assurance that such beliefs and expectations will prove to be correct. Investments in securities are not insured, protected, or guaranteed and may result in loss of income and/or principal. This communication may include opinions and forward-looking statements, and we can give no assurance that such beliefs and expectations will prove to be correct.
Friday morning started well enough until a post by the president ruined everyone's day. Irritated by several recent moves by the Chinese, he lashed out, threatening a "massive" increase in tariffs and canceling a scheduled meeting with China's leader. Markets fell on the news.
The last time I looked around noon on Friday, all three stock market averages were lower by one percent or more. NASDAQ was down more than 2 percent. After several weeks of everything going our way, Donald Trump has had a temper tantrum. I am sure his mood was already somewhat dampened. Maria Corina Machado, the Venezuelan opposition leader, was awarded the Nobel Peace Prize today.
It is an award that Trump has coveted and lobbied for all year. It could be a coincidence, but I suspect China was an easy target for his disappointment. At the same time, some of his hardcore supporters who are China hawks have been accusing him of being soft on China lately. Ostensibly, his outburst was in response to recent Chinese actions on the trade front. They have tightened export controls on rare earth minerals, added new port fees on American ships, and launched an antitrust investigation into Qualcomm.
Before this blowup, the markets meandered within a moderate trading range all week. One positive result of the government shutdown has been that Market volatility has dropped sharply, enabling equities to continue to climb to all-time highs.
Next week, quarterly earnings are once again on deck. Analysts expect corporate results to be relatively strong, which could support the markets. On October 15th, the military, along with other federal workers, will either receive a paycheck or not, depending on the outcome of shutdown negotiations. It appears that the Republican stance against any change in their position is beginning to crack around the edges. The Democrats' health-care concerns are shared by many on both sides of the aisle.
Polymarket betting indicates an 84 percent chance that Congress will pass a funding bill sometime after the middle of the month. Both houses of Congress would need to approve any bill before it is sent to the president. How long would that take? The betting odds indicate a 76 percent chance that this will occur by the end of the month.
My guess is that we will start to hear more compromise talk after Oct. 15, and the end of the current drama will follow a week or so later. If this were to come to pass, all the threats, sword rattling, and dire predictions would melt away. Any damage done will be reversed, and investors will continue with their business.
The only real issue with this shutdown business is that markets continue to operate without crucial economic data, such as inflation numbers, economic growth, and the state of the labor market. The Fed meets at the end of the month, but it is hard for me to believe that the central bank is as much in the dark as we are. I suspect that they have the resources to at least have a general idea of how the economy is functioning despite the blackout.
Investors remain convinced that the Fed will cut interest rates again at its October FOMC meeting at the end of the month. It is the primary reason stocks continue to climb, although 6,800 on the S&P 500 Index has been a difficult level to pierce on the upside. Precious metals and cryptocurrencies, which have experienced a strong run, are also starting to stall.
These could be early signs that the markets are due for a pause in the weeks to come. Do not be surprised if that were to occur.
Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at bill@schmicksretiredinvestor.com.
Anyone seeking individualized investment advice should contact a qualified investment adviser. None of the information presented in this article is intended to be and should not be construed as an endorsement of OPI, Inc. or a solicitation to become a client of OPI. The reader should not assume that any strategies or specific investments discussed are employed, bought, sold, or held by OPI. Investments in securities are not insured, protected, or guaranteed and may result in loss of income and/or principal. This communication may include opinions and forward-looking statements, and we can give no assurance that such beliefs and expectations will prove to be correct. Investments in securities are not insured, protected, or guaranteed and may result in loss of income and/or principal. This communication may include opinions and forward-looking statements, and we can give no assurance that such beliefs and expectations will prove to be correct.
American farmers are set to receive another bailout from Trump's tariffs. The holdup is due to the lack of any additional money that lawmakers can deliver, as well as furloughed administration staffers to finalize and implement the aid package.
Readers may recall that during Donald Trump's first tariff war, which occurred in 2018-2019, farmers were devastated as China retaliated by suspending purchases of U.S. agricultural imports. It took $20 billion of taxpayer money to stop the bleeding. Once again, the same scenario is unfolding as the administration prepares another multibillion-dollar bailout.
Under the first bailout, farmers who earned less than $900,000 a year and produced one of the agricultural products affected by the U.S.-China trade war could apply for relief. The bailout's limit of support for a single farmer was $125,000 per person of a legal entity.
This time around, we are still unclear about the details or how the government will fund it. That is because the government shutdown has removed the administration’s ability to determine if they can use tariff money to pay for it or the need to ask Congress for the funds. Last time around, Trump used funds from an Agriculture Department entity called the Commodity Credit Corp. That avenue is no longer viable since the CCC has depleted its cash.
I still recall the televised announcement when the President claimed he had made a significant trade deal with China, promising to purchase $200 billion of U.S. agricultural products over two years. It turned out that, through 2021, China had only managed to buy 83 percent of that commitment.
While some argue that China deliberately reneged on that promise, I suspect the COVID-19 pandemic had a much more significant impact on the shortfall in purchases, as China struggled to contain the epidemic. Through the Biden years, China continued to purchase farm products. It was only after President Trump restarted the trade war in his second term by increasing tariffs on China by 100 percent that purchases ceased.
Last year, China accounted for more than half of the 24.5 billion of U.S. exports of soybeans. Currently, thanks to Trump's tariffs, China has ceased buying American soybeans since May and increased its purchases from producers in South America. Since the 1950s, the U.S., Brazil, and Argentina have accounted for 80 percent of global soybean production. Soybeans are the second-largest crop in the U.S., with 85 million planted acres over the past five years. That is about the size of the entire Northeast.
That crop contributes, on average, about $124 billion per year to the economy. There are approximately 280,000 soybean farmers in the country, primarily located in the Midwest, with four out of the five largest producers based in states that supported the president in the last election. However, just two multinational corporations, Corteva and Bayer, control more than half of all soybeans (as well as corn and cottonseed) production in America.
Farmers' incomes have been sucking wind for years. Most have lost money over the past two years, and thanks to several different variables, losses will likely mount this year and into 2026. Costs for fertilizer, machinery, and seeds have increased at a rate higher than inflation, while prices for almost every row crop are below the cost of production. Interest rates and climate change have also taken their toll.
The Biden administration and Congress passed a $10 billion bailout for farmers in December 2025, but that is just a drop in the bucket. Republican lawmakers estimate that farmers will need as much as $50 billion in economic support today. Right now the talk centers around another $10 to $14 billion in aid. The American Soybean Association president, Caleb Ragland, called that "putting a Band-aid on an open wound."
While my heart goes out to America's farming community, I cannot help but wonder why farmers have been singled out for relief once again. At the same time, the rest of us continue to suffer from the same fallout from tariffs, including higher food prices that exceed the inflation rate, and increased health care costs as the Republican-controlled Congress continues to reduce benefits.
Is it because the farmers are mainly from states where Trump voters are prevalent? Is it because our Secretary of the Treasury Scott Bessent owns thousands of acres of soybean farmland? Will half the spending end up in the pockets of the two major corporations that control the soybean market?
The last bailout was limited to those who earned less than $900,000 per year. There are many small businesses throughout the country that earn less than that. Where is their bailout? What is the solution to turning around our farmers' plight? It is simple. Drop the irrational tariffs on China.
Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at bill@schmicksretiredinvestor.com.
Anyone seeking individualized investment advice should contact a qualified investment adviser. None of the information presented in this article is intended to be and should not be construed as an endorsement of OPI, Inc. or a solicitation to become a client of OPI. The reader should not assume that any strategies or specific investments discussed are employed, bought, sold, or held by OPI. Investments in securities are not insured, protected, or guaranteed and may result in loss of income and/or principal. This communication may include opinions and forward-looking statements, and we can give no assurance that such beliefs and expectations will prove to be correct. Investments in securities are not insured, protected, or guaranteed and may result in loss of income and/or principal. This communication may include opinions and forward-looking statements, and we can give no assurance that such beliefs and expectations will prove to be correct.
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