Escape from the economic inferno

In 1949, a forest fire in Montana engulfed a parachute brigade of firefighters. Panicking, they ran, trying to make it up a steep slope to safety.

One man, Wag Dodge, stopped, set the grass ahead of him on fire, stepped into the middle of the burned-out area left behind, lay down, and called out to his crew to join him. Although the propitiously named Dodge survived virtually unharmed - he had invented, on the spot, what came to be known as the escape fire - the others either thought he was crazy or never heard his calls. All but two perished.

The firefighters' organisation had unravelled. The men had lost their ability to think coherently, to act together. This is what happens to any jumbled organisation in a disaster; and it's what's happening to the economy. The collapse of Lehman Brothers and the bailout of AIG have left the markets in a state of frenzy. From global to local: if corporate social responsibility budgets are frozen, this will have an impact on company giving. High net worth individuals, too, may become less inclined to give generously.

At the same time, the Government is scattering, so it's hardly likely that the third sector will remain high on its agenda. At any rate, its record for the support of the sector is mixed. The Government will respond that it has invested heavily, but the relationship has been pretty feudal and the sector is divided between the few who've benefited and the many who haven't. Indeed, as a recent Liberal Democrat publication, Communities Actually, points out, the Government's "centralised funding regimes and bizarre reporting requirements" are causing small charities to go out of business.

There may be an escape, as it were, from the inferno. In times of turbulence, voluntary and community organisations become all the more valuable, and levels of trust between communities and local charitable and voluntary organisations remain high. If statutory funding streams become less reliable and corporate support falters, hope may yet lie in fostering strong personal ties, revivifying habits of association and encouraging people to reconnect with communities. Then, if donors do decide to restrict their giving, they may just favour their own local good causes.

- Nick Seddon is an author and journalist:

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