01 November 2020

The State of Charitable Giving

 "If you can't feed a hundred people, then just feed one."

--Mother Teresa

In 2019, American individuals, bequests, foundations, and corporations gave an estimated $450 billion to a variety of religious and charitable causes.  That level of giving ranks among the highest years ever for charitable contributions according to Giving USA.  

The 4.2% increase in donations (2.4% adjusted for inflation) over 2018's $431 billion, measured in current dollars, makes the 2019 report the highest dollar total to date.

"In 2019, the growth in total giving was driven by an increase in giving by individuals, which remains by far the biggest source of giving," said Amir Pasic, Ph.D., and the Eugene R. Tempel Dean of the Lilly Family School of Philanthropy.  

Una Osili, Ph.D., associate dean, summed it up this way, "We saw solid, broad-based growth in almost all aspects of charitable giving, and especially in giving by individuals due to strong growth in the S&P 500 and personal income.

"While giving trends vary by donors' income and wealth, since the Great Recession, we have seen giving become more concentrated toward the top end of the income and wealth spectrum," Dr. Osili added.

Where did the money come from?

  • Individuals--69% or $309 billion.
  • Foundations--17% or $75 billion.
  • Bequests--10% or $43 billion.
  • Corporations--5% or $21 billion.

Where did the money go?

The top five recipients of charitable gifts in 2019--

1.  Religion:  $128 billion.

2.  Education:  $64 billion.

3.  Human Services:  $55 billion.

4.  Foundations:  $53 billion.

5.  Health:  $41 billion.

The power of generosity

The 2019 report reflects the practices of generous givers--those who believe in a worthy cause and back it up with their time and contributions.  

Research from the University of California, Davis, confirms that generosity begets generosity.  That it spreads and transfers even with several degrees of separation.  Individuals affected by your generosity will act generously toward others for a significant period of time.

Additionally, there's a body of scientific evidence to show that those who are generous often feel grateful as a permanent state of being.  People who remain mindfully thankful, rather than choose it as a temporary state of mind, have been proven to engage in healthier behaviors, have a stronger immune system, are more able to relax, and have decreased rates of disease. (Harvard School of Health; Midland Health)

Emerging patterns

Pre-Covid ...

o Giving is increasing because of large gifts from wealthy donors through private foundations and donor-advised funds. Smaller and mid-level donors are slowly disappearing across the broad range of all organizations. That's unfortunate as the loss of middle-class philanthropy would be devastating to smaller charities.  

o In recent years the number of donors declined 4.5% and donations under $250 by 4.4% while donations between $250 and $1,000 also dropped.  Charitable revenues for donations of at least $1,000 increased by 2.6%.  Currently, total charitable giving is around 2% of U.S. Gross Domestic Product (GDP), about where it was in 1984.  

o A person's attendance at a house of worship is the single best indicator of overall charitable generosity.  Those who attend worship regularly (two or three times a month, at least) are three to four times more generous than those who attend less frequently, or not at all. (Lake Institute)

o People who stop itemizing won't necessarily stop giving. But at the margins economists expect tax code changes to reduce donations from where they otherwise would be or to change where and how they contribute.

Post-Covid ...

o More than half of charitable organizations in the U.S. are expecting to raise less money in 2020 than they did in 2019, and an equal percentage believe the same for 2021.  However, 3 out of 10 human services charities said they expected to raise more funds in 2020 than in 2019.  (Association of Fundraising Professionals)

o The challenge confronting all fundraisers during Covid-19 is not being able to meet face-to-face with donors and prospects.  

"It's much easier for our frontline people to have a Zoom call with someone they know really well than it is to qualify a new prospect for fundraising purposes," noted Steven Bayer, associate vice president for university development at Duke.  Bayer said that keeping in touch with loyal donors and bringing new ones into the fold are the basics that cannot be neglected.

What principles transcend time?

It's important to keep coming back to motivations for giving.  Why do people give?

Here are three reasons offered by Clif Christopher, founder, and president of Horizons Stewardship Co.--

1.  A belief in the mission.  People want to be part of something that changes lives.  Nonprofits and churches only have one thing to sell--changed lives.  The best way to raise money is to simply do your job--and communicate results.  

2. Regard for staff leadership.  Ranking high on most donor surveys is the regard the donor has for those who lead the organization. When they have confidence in those individuals to perform, the gifts follow.  When they don't, the gifts go elsewhere.

3. Financial stability of the institution.  People don't give to sinking ships. They give to ships that are sailing strong and give every indication of reaching their destination.  More than ever they are holding nonprofits accountable for wise use of funds and looking for solid performance with the funds already given. 

First things

"There is one general rule that is the most important for charitable organizations, nonprofits, and colleges to follow--don't stop fundraising," says Mike Geiger, CEO of AFP.  "Those that continue to raise funds--even increase their fundraising--will do the best," Geiger emphasized.

Studies show that stewardship is the best step forward toward receiving the next gift. Don't abandon ethics; and express appreciation for every gift, regardless of the size. 

Donors want to hear from the organizations they trust.  

Are donors hearing from you?

Sources: Charitable giving and distribution totals for 2019 are from Giving USA.  Additional information comes from Candid, Donor Trends, and NonProfits Source.


© Bredholt & Co. 

01 October 2020

Flying in Remote Formation

"Geese in the rear of the formation honk to encourage those up front to up their speed. It is important that honking from behind be seen as encouraging.  Otherwise, it is just - well - honking."

--Dr. Robert McNeish

Looking for signs of change?  

The American Expedition Forum reminds us that the flight of Canada geese at certain times of the year is a sure sign the seasons have changed.

Much has been written about the Canada goose, the largest in the world, with specimens averaging between five and 14 pounds.  Some geese weigh over 20 pounds.  Full-grown Canada geese measure between 30 to 40 inches in length and have a wingspan between 50 and 75 inches, or about four to six feet.  

They congregate into large groups for their migrations, maybe 30 to 100 in a group.  Their loud honking, a form of airborne communications, gets our attention even if we're indoors.   

Geese flying in V formation. 
(C) Susan Huppi

Always a sight to behold, a perfect V formation of geese, or skein, can provide 71% more flying range than if they were flying on their own, according to studies published on Quora.com.    

Imagine each bird in line flying a little higher than the goose in front of it.  Some speculate that this formation allows the lead goose to break the headwind, making it possible for the birds behind to "draft."  Shifting positions during their flight allow geese to take turns breaking the wind and reducing fatigue, according to those who study this species of the Anatidae family.

Canada geese fly at an average speed of about 40 miles per hour when migrating but can go up to 70 miles per hour if they catch a strong tailwind.  Migrations have been recorded as long as 2,000 to 3,000 miles with distances of up to 1,500 miles in a single day with good weather.

And yes, you may see some Canada geese flying in different directions.  The Cornell Lab says there are increasing numbers of resident Canada geese across North America.  These birds do not migrate at all but are simply gaggles of geese seen as nuisances in some communities and lake areas.  

Just ask anyone with a dock.  
A remote season

Books and workshops have been produced over the years showing management how much can be learned from Canada geese and applied to business.  However, most literature on that topic was written prior to this current global pandemic.  

Do any of those original lessons still apply to the increased use of video technology and social distancing?

And how are virtual organizations supposed to fly in formation?

Here is our Covid-19 version of the "Lessons of Geese" originally published in 1972 by Dr. McNeish ...

1.   The importance of knowing the organization's purpose and goals.  It's hard to accomplish anything, in-person or remotely if you're not sure of the purpose (why?) and goals (outcomes) of the enterprise.  Those two pillars are worth continually communicating. 

2.   The importance of individuals and teamwork.   Work is a balancing act with the task determining the form.  Sometimes a single individual is all that's needed to perform an assignment.

Teams struggle when there's little or no recognition of the people who comprise them.  Geese strengthen, not weaken, their individual identity when flying in formation.  

There are benefits to staying together.  Like the goose, you may feel the drag when flying out of formation.  Therefore, learn to take advantage of the lifting power of your teammates in person or online, whether nearby or half-way around the world.  

3.   The importance of sharing and remaining still.   When a goose tires of flying it drops back into formation and another goose flies to the point position.  This sharing of responsibility is impressive.  Relieving someone of a difficult task is an issue of health and well-being, personally and corporately.  

At other times singularly and quietly toughing out a difficult duty is a character-building exercise. 

4.   The importance of empathy and understanding.  A recent study by the University of Chicago shows the pandemic is taking a toll on mental health especially among young adults.  Staying alert to colleagues who face discouragement and fatigue is everyone's responsibility.  

Being alone or having children to school while working can only go on so long before causing a severe strain on an associate's well-being.  How many Zoom calls can anyone take?  

If a goose gets sick two geese drop out of formation and follow it down to the ground to help and protect it.  Standing by each other in uncertain times may save someone's job--or life.  

And in taking care of others don't forget to take care of yourself.

5.    The importance of coaching and encouragement.  Employees sometimes need specific help with their jobs.  Ask directly, what, if any assistance, is needed?  How can we help each other with current commitments and deadlines?    

Encouragement should also focus on growth and development, not just addressing one's feelings during stressful situations. 

In one accord

The late Albert Schweitzer told this story about geese--

A flock of wild geese had settled to rest on a pond.  One of the flock had been captured by a gardener, who had clipped its wings before releasing it.  When the geese started to resume their flight, this one tried frantically, but vainly, to lift itself into the air.  

The others, observing his struggles, flew about in obvious efforts to encourage him; but it was no use.

Thereupon, the entire flock settled back on the pond and waited, even though the urge to go on was strong within them.  For several days they waited until the damaged feathers had grown sufficiently to permit the goose to fly.

Meanwhile, the unethical gardener, having been converted by the ethical geese, gladly watched as they finally rose together, and all resumed their long flight. 


© Bredholt & Co.



01 September 2020

Never Golf Alone

"You swing your best when you have the fewest things to think about."

--Bobby Jones (First person to achieve golf's Grand Slam in a single year--1930.)

You can take the game of golf a long way in life.  At least that's the message I repeat often to our grandsons, Lucas and Brody when they visit during the summer in Michigan.  Last year I signed them up for lessons to work on the fundamentals of the game.         

Golf is also filled with lessons for life and business if we know where to look.  Here are five that come to mind:

1.   Guided experience.  Sometimes we cut a unique path on our own but for most, it helps to have someone show the way.  In golf, that person was Bob Smith.  He combines a low handicap with a gift for teaching.  (Bob eventually became a college professor.)  

He knows how the game is played, etiquette, too.    

In the spring of 1961, my parents bought me a set of essential clubs for beginners and a Scottish-plaid golf bag at Montgomery Ward in Owosso, Michigan.  As soon as the snow melted, Bob and I were teeing up at Corunna Hills Golf Course for my first game.  

After nine holes and 99 strokes, I thought the worst was behind me.  That was wishful thinking.  I would need a lot of practice and an improved mindset to continue playing this game. 

Nevertheless, Bob Smith opened a door that remains ajar. 

2.   Framing the day.   As I am walking out the door each Monday morning for a golf outing with our neighbors, my wife Chris says--"Make a hole-in-one today."  

Beginning any day with a clear goal increases the likelihood of getting something done.  

Successful people manage themselves by having purpose and clarity in their lives. They know that if everything is important, nothing is important.  Their day is fashioned so it's productive in the right areas.  Being focused is a good way for leadership to minimize distractions and stay on task. 

3.   Timely coaching.  Just as Bob Smith was a morale-booster in the early days so are golfing partners John Shoup and Duane Pierce presently.

In fine-drawn ways they remind me that managing one's attitude is critical for doing well. Ultimately we play against ourself--and less against others.   

Russ Bredholt hole-in-one. Number nine, Red Course, par 3, 124 yards.
Hickory Ridge Golf Course, Galesburg, Michigan.
24 August 2020 (C)

Both witnessed our hole-in-one and knew what to do. See if the ball is in the cup. Take a picture for the record.  And confirm that the golf ball, a Pinnacle, was mine. 

It was.  

On the way home we celebrated by having lunch at Scooters Malt Shoppe.  Guess who paid?

4.   A game of character.  Golf is popular, someone said, because you can name your own score.  Between the tee box and final putt, each golfer in the amateur ranks is really on their own.  Keeping track of your score becomes a matter of personal responsibility.  

Using fuzzy math is unnecessary.  If tempted--don't yield.  It's not worth it in life or sports. Unless you're on the PGA tour or playing tournament golf at your club, no one except you cares about your final score.
5.    Don't give up.   About 3 million golfers quit each year and a similar number begin, according to the National Golf Foundation.  When I picked up my golf ball from the cup on the ninth hole of the Red Course at Hickory Ridge, I was relieved I hadn't stopped playing the game.

Just a few good drives, chips, or putts, strategically placed, were enough to keep me coming back one more time.  

The same is true in organizational life.  A few good days, properly placed, can help us make progress, even in the midst of a pandemic.  

Don't give up on yourself, your recreation, or the business.  There's more to be gained by persevering than quitting, regardless of your lot in life.  


© Bredholt & Co. 




01 August 2020

50 Years

Chris Bredholt 

The Wife of Noble Character

An excellent wife who can find?

She is far more precious than jewels. 
The heart of her husband trusts in her, 
and he will have no lack of gain.
She does him good, and not harm,
all the days of her life.

She seeks wool and flax,
and works with willing hands.
She is like the ships of the merchant;
she brings her food from afar.
She rises while it is yet night
and provides food for her household
and portions for her maidens.

She considers a field and buys it;
with the fruit of her hands she plants a vineyard.
She dresses herself with strength
and makes her arms strong.
She perceives that her merchandise is profitable.

Her lamp does not go out at night.
She puts her hands to the distaff,
and her hands hold the spindle.
She opens her hands to the poor
and reaches out her hands to the needy.

She is not afraid of snow for her household,
for all her household are clothed in scarlet.
She makes bed coverings for herself;
her clothing is fine linen and purple.

Her husband is known in the gates
when he sits among the elders of the land.

She makes linen garments and sells them;
she delivers sashes to the merchant.
Strength and dignity are her clothing,
and she laughs at the time to come.

She opens her mouth with wisdom,
and the teaching of kindness is on her tongue.
She looks well to the ways of her household
and does not eat the bread of idleness.

Her children rise up and call her blessed;
her husband also, and he praises her:
"Many women have done excellently,
but you surpass them all."

Charm is deceitful, and beauty is vain,
but a woman who fears the Lord is to be praised.
Give her the fruit of her hands,
and let her works praise her in the gates.

--Proverbs 31 (ESV)


©  Bredholt & Co.

01 July 2020

1968--A Chronology

"History never looks like history when you are living through it."

--John W. Gardner

Certain events of the past several months are being compared to 1968, a period that Newsweek described as "The Year That Changed Everything." 

For some perspective, here's a selected chronology of a tumultuous twelve months played out on network TV screens (ABC, CBS, and NBC) 52 years ago.  We were witnesses and participants in a  divisive epoch that one person described as leaving the Baby Boom generation "stuck in the 60s decade."  

o January 5--Prague Spring begins.  Alexander Dubcek is chosen as the leader of the Communist Party of Czechoslovakia.

o January 14--The Green Bay Packers defeat the Oakland Raiders in Super Bowl II, 33-14, at the Miami Orange Bowl.

o January 21--Vietnam War. Battle of Khe Sanh, one of the most publicized and controversial battles of the war begins, ending on April 8.

o January 22--Rowan & Martin's Laugh-In debuts on NBC.

o January 23--North Korea seizes the USS Pueblo, claiming the ship violated the territorial waters while spying.

o January 30--Vietnam War. The Tet Offensive begins, as Viet Cong forces launch a series of surprise attacks across South Vietnam.

o January 31--Vietnam War. Viet Cong soldiers attack the U.S. Embassy, Saigon.


o February 1--Vietnam War. A Viet Cong officer name Nguyen Van Lem is executed by Nguyen Ngoc Loan, a South Vietnamese National Police Chief.  The event is photographed by Eddie Adams. The stunning picture makes headlines around the world and wins the Pulitzer Prize.  

Eddie Adams' iconic Vietnam War photo: What happened next - BBC News
Execution of Nguyen Van Lem. (C) Eddie Adams

o February 6-18--The 1968 Winter Olympics are held in Grenoble, France.

o February 19--NET televises the very first episode of Mister Rogers' Neighborhood.

o February 24--Vietnam War. The Tet Offensive is halted.  


o March 7--Vietnam War.  The First Battle of Saigon ends.

o March 12--U.S. President, Lyndon B. Johnson, barely edges out antiwar candidate Eugene J. McCarthy in the New Hampshire Democratic primary.  The close vote highlights deep divisions in the country and party over Vietnam.

o March 16--Vietnam War.  My Lai Massacre where American troops kill scores of civilians.  The story becomes public in November 1969.

o March 18--The U.S. Congress repeals the requirement for a gold reserve to back the U.S. dollar.

o March 23--Coach John Wooden's UCLA Bruins defeat the North Carolina Tar Heels coached by Dean Smith, 78-55.  It was UCLA's fourth title in five years.  They were led by All-American Lew Alcindor (Kareem Abdul-Jabar).

o March 31--U.S. President, Lyndon B. Johnson, announces he will not seek re-election.


o April 2--The film, A Space Odyssey, premieres in Washington, D.C.

o April 3--Martin Luther King, Jr., 39, delivers his "I've Been to the Mountaintop" speech in Memphis, Tennessee.

o April 4--Martin Luther King, Jr. is shot dead at the Lorraine Motel in Memphis, Tennessee.  Riots, lasting several days, erupt in major American cities including Washington, D.C., Chicago, Baltimore, and Kansas City.

o April 11--U.S. President, Lyndon B. Johnson, signs the Civil Rights Act of 1968.

o April 23--Several hundred students gather on the campus of Columbia University in New York City. Student protestors occupy several buildings for nearly a week over institutional expansion.

o April 23--The United Methodist Church is created by the union of the former Methodist and Evangelical United Brethren churches.


o May 11--The Montreal Canadians defeat the St. Louis Blues in a four-game sweep to win the Stanley Cup.

o May 14--The Beatles announce the creation of Apple Records in a New York press conference.

o May 18--Mattel's Hot Wheels toy cars are announced.

o May 30--Bobby Unser wins the Indianapolis 500.


o June 4--The Standard & Poor's 500 Index closes above 100 for the first time, at 100.38.

o June 5--U.S. presidential candidate Robert F. Kennedy is shot at the Ambassador Hotel in Los Angeles.  Sirhan Sirhan is arrested.

o June 6--Robert F. Kennedy dies from these injuries.  He was 42.

o June 8--James Earl Ray is arrested for the assassination of Martin Luther King, Jr.


o July 13--The 1968 global flu pandemic. Influenza A virus subtype H3N2 first recorded in Hong Kong and in the U.S. in September 1968.  The estimated number of deaths worldwide was one million and about 100,000 in the U.S.  Most deaths were in people 65 years and older.  The H3N2 virus continues to circulate globally and is associated with severe illness in older people. 

o July 18--The semiconductor company Intel is founded.


o August 5-8--The Republican National Convention in Miami Beach, Florida nominates Richard M. Nixon for U.S. president and Spiro T. Agnew for Vice President.

o August 20-21--Warsaw Pact invasion of Czechoslovakia.  The "Prague Spring" ends as 750,000 Warsaw Pact troops and 6,500 tanks with 800 aircraft invade Czechoslovakia.  That invasion was the largest military operation in Europe since the end of World War II.

o August 22-30--Police clash with anti-war demonstrators in Chicago outside the 1968 Democratic National Convention, which nominates Hubert H. Humphrey for U.S. president and Edmund S. Muskie for Vice-President.  The riots and subsequent trials are part of the activism of the Youth International Party.


o September 8--Arthur Ashe wins the first U.S. Open of the Open Era, also becoming the first black to capture the title.

o September 14--Detroit Tigers' pitcher, Denny McClain, becomes the first baseball player to win 30 games in a season since 1934.  He remains the last player to accomplish the feat.   


o October 8--Vietnam War.  Operation Sealords gets underway as the United States and South Vietnamese forces launch a new operation in the Mekong Delta.

o October 10--1968 World Series.  The Detroit Tigers defeat the St. Louis Cardinals in the best of 7 series, 4 games to 3, after being down 3 games to 1.  The final score of game seven played in St. Louis--Tigers 4 and Cardinals 1.  Mickey Lolich (3-0) is the winning pitcher and Bob Gibson (2-1) took the loss for the Cardinals.

o October 11--NASA launches Apollo 7, the first manned Apollo mission (Wally Schirra; Donn Eisele; and Walter Cunningham).  

o October 12-27--The Games of the XIX Olympiad are held in Mexico City, Mexico.  After being awarded gold and bronze medals, respectively, in the 200-meter sprint, U.S. athletes Tommie Smith and John Carlos bow their heads and raise their hands during the playing of the National Anthem.    

o October 31--Vietnam War.  Citing progress in the Paris peace talks, U.S. President Lyndon B. Johnson announces to the nation that he has ordered a complete cessation "of all air, naval, and artillery bombardment of North Vietnam effective November 1."


o November 5--U.S. presidential election.  Republican candidate Richard M. Nixon defeats the Democratic candidate, Vice President Hubert H. Humphrey, and American Independent Party candidate, George C. Wallace.

o The Heidi Game--NBC cuts off the final 1:05 of an Oakland Raiders v. New York Jets football game to broadcast the pre-scheduled Heidi.  Fans are unable to see Oakland (which had been trailing 32-29) score two late touchdowns to win 43-32.  

o November 24--Four men hijack Pan Am flight 281 from JFK International Airport, New York to Havana, Cuba.


o December 9--Douglas Engelbart publicly demonstrates his pioneering hypertext system, NLS, in San Francisco, together with the computer mouse.

o December 11--The film, Oliver!, based on the London and Broadway musical, opens in the U.S. and goes on to win the Academy Award for Best Picture.

o December 24--Apollo program.  The manned U.S. spacecraft Apollo 8 enters orbit around the Moon.  Astronauts Frank Borman, Jim Lovell, and William A. Anders become the first humans to see the far side of the Moon and planet Earth as a whole, as well as having traveled further away from Earth than any people in history.  

APOD: 2018 December 24 - Earthrise 1: Historic Image Remastered
Earthrise, Christmas Eve, 1968, Apollo 8 Mission. (C) NASA

Anders photographs "Earthrise."  The crew reads the story of creation from the Book of Genesis.  


Timeline USA:  Digital Public Library; History.com; U.S. Centers for Disease Control (CDC)


©  Bredholt & Co. 

01 June 2020

Disney's Dilemma

"If they don't want to come out, nobody's gonna stop 'em."

--Yogi Berra, Baseball Hall of Fame Catcher, New York Yankees (1946-1963)

The Walt Disney Co. submitted plans to reopen four U.S. theme parks in July. (Shanghai Disneyland reopened on 11 May.)  As a result of the global coronavirus outbreak, Disney announced the closure of its parks on 12 March 2020.   

The request has been approved by the Orange County, Florida Economic Recovery Task Force, and Mayor Jerry Demings.  On 29 May Gov. Ron DeSantis signed off on the plan. 

The reopening schedule looks like this--

--The Magic Kingdom and Animal Kingdom:  11 July

--Epcot and Hollywood Studios:  15 July

Disney Springs Complete Guide - Al's Blog
Disney Springs, Lake Buena Vista, Florida.
(C) Walt Disney Co.

Disney Springs (formerly Disney Village and Downtown Disney) reopened 20 May with CDC guidelines for social distancing in place.   

What about Disneyland in Anaheim, California?  Perhaps in June as part of California's Stage 3 road to reopening.  As to resort hotels in Florida, it looks as though some could reopen 11 July along with the Disney Vacation Club, all with safety guidelines and cleaning procedures in place.  

Universal Studios will reopen on 5 June with limited capacity.  SeaWorld is opening its three Orlando parks, including Discovery Cove and Aquatica, on 11 June--one month ahead of the Disney schedule.

The proposed Disney dates, if kept, will show why predicting can be a fool's errand.  On 22 April John Hodulik, managing director of research at UBS, wrote to his clients giving a date of 1 January 2021 as "our base case" for reopening.  

Scaling down

Google returns 97 million pages when you search "scaling up" on its website. "Scaling down," which is like looking through the opposite end of a telescope, instantly returns 104 million pages.  

Over the last decade "does it scale?" became a mantra for manufacturing, start-ups, high tech, retail, and financial services. 

Now, businesses are looking to move in the opposite direction to meet reopening guidelines keeping employees and customers safe.  As there is a cost to increasing health and safety measures, can businesses function this way and be profitable?  


The Florida Disney parks will incorporate protocols from the county, state, and federal governments.  But Disney cast members will also be learning from their sister park in China which will have been open two months to the date when guests walk through the gates at the Magic Kingdom.  

Mickey Mouse Lovers - Home | Facebook
"Welcome back!" Mickey Mouse
(C) Walt Disney Co.

From the proposal submitted the last week of May, here's what to expect in the near term when returning to the "most magical place on earth:"

1.  Disney is placing limits on attendance and controlled guest density.  Guests will be required to make a reservation for a particular day.

2.  Events that draw big crowds--such as parades and nighttime spectaculars/fireworks--will not return until later.

3.  High-touch experiences like makeovers and playgrounds will not be available from the start.

4.  Character meet-and-greets will be unavailable upon reopening, but characters will still be out in the park.

5.  Guests ages 3 and up will be required to wear face coverings.

6.  Guests and cast members will be screened for temperatures before entering the park (as they are doing at Shanghai Disneyland). 

7.  The parks are encouraging cashless transactions.

Additionally, Disney issued a COVID-19 warning on its website-- 

"By visiting Walt Disney World Resort, you voluntarily assume all risks related to exposure to COVID-19."

In its proposal, Disney did not say by how much capacity will be capped at the parks as there is a corporate policy of not officially disclosing attendance figures.  However, daily capacity will probably be calculated on the 6' distancing guideline.   

This is a monumental task as Disney cast members will be stretched to manage the parks and monitor healthy behavior at the same time. 

A shock to the system

Walt Disney Co., with total 2019 revenue of $69.5 billion, is an entertainment giant that one news headline recently described as a "Stricken Empire."  

The Walt Disney Company - Wikipedia
Walt Disney Co. Headquarters, Burbank, California
(C) Walt Disney Co. 

Just over 100,000 employees have been laid off.  To further address costs, executive pay was cut up to 50 percent and Disney took out a $5 billion line of credit to boost liquidity.  That was in addition to $8.25 billion the company secured in March.  

Dividends?  Not at this time.

Bob Iger, executive chairman and former CEO who built this $239 billion enterprise over the past 14 years, decided in February to retire as chief executive officer.  Mr. Iger said on CNBC, "I don't want to run the company anymore."  The Board of Directors selected Bob Chapek as CEO with Mr. Iger overseeing creative content at Disney through 2021.

Then in March 2020, the world stopped spinning.

One observer expressed it this way, "Disney's vastness has become a liability.  ABC/ESPN. Disney Cruise Line.  Stage shows.  Disney Stores."  Launched just five months ago Disney+, with more than 50 million subscribers, is a bright spot as many adults and children are at home. 

What's Disney's dilemma?

The Wall Street Journal noted that "much of Disney's business rests on its ability to draw people into crowded spaces including theme parks, hotels, ships, sporting events, and movie theaters. The return of such massive entertainment options at any point this year remains questionable."

Disney's dilemma, then, is having to operate profitably, at reduced capacity, with guests' social distancing.  All that inside a fixed-cost business model driven by increased volume, high density, and large-scale venues.  

At 1:15 p.m. on New Year's Eve 2019, Walt Disney World issued an alert that the Magic Kingdom, which averages 57,128 guests per day based on estimates from Theme Park Tourist website, would stop accepting new guests.  When will that happen again?   

Managing risk

The future depends on factors no one controls--COVID-19 treatments and vaccines; employment levels; airlines staying in the air; and households willing to travel.  A survey by U.S. Travel found that only 18% of adults currently feel safe about flying.  

Willingness to travel more than 300 miles from home is going to weigh heavily on the success of reopenings at Disney and other destination resorts.   

Disney World's Magic Kingdom temporarily stops admitting new ...
The main entrance to Walt Disney World in Florida.
(C) Walt Disney Co.

According to a 2017 Money Magazine study, a family of four visiting Walt Disney World may spend about $6360 on average, for flights, hotels, souvenirs, food, and park tickets during a four-night trip. 

Knowing the cost Disney management and cast members will undoubtedly be working hard to show guests there's still "magic" in the Kingdom.   


© Bredholt & Co.