July 23, 2009
52% of Charities Saw Drop in Spring Donations, Survey Finds
By Caroline Preston
Just over half of charities saw a drop in donations between March and May of this year, the same portion as reported a decline between October and February, according to a survey by the nonprofit watchdog group Guidestar.
Meanwhile, 36 percent of charities have cut their budgets this year, while the same portion said their budgets have increased.
Bob Ottenhoff, president of Guidestar, said he was surprised by the findings. “We thought we’d see a much bigger dip,” he said. “Either that means they’ve found some ways to get through or the decrease has yet to come.”
Mr. Ottenhoff and Bradford Smith, president of the Foundation Center, announced the findings together during a teleconference. They warned that there is plenty of data to suggest that the worst has yet to come.
Mr. Smith predicted that foundation grants would drop by at least 9 percent in 2009 and that giving would also decline in 2010. Individual giving will likewise continue to fall for some time, said Mr. Ottenhoff, driven in part by the rising unemployment rate.
He said nonprofit leaders tend to have a “we can get through this” attitude that may lead them to postpone big adjustments at their organizations. Nonprofit leaders also tend to have less experience in reducing costs than their counterparts in the business world, he said.
Another sign of nonprofit optimism: The IRS is seeing a steady number of applications for nonprofit status, despite the economy, Mr. Ottenhoff said.
Among other findings from the Guidestar study of more than 2,000 public charities and private foundations:
- Thirty-six percent of grant makers said they gave away less money in the three-month period.
- Eight percent of organizations said they were in imminent danger of closing because of a lack of money.
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“Nonprofit leaders also tend to have less experience in reducing costs than their counterparts in the business world”
I cannot agree with this. I think that, even when donations are up or stable, most non-profits run such a tight budget that there’s little wiggle room for cuts. Just my experience.
— Ashley Jul 23, 11:24 AM #
I also completely disagree with the expense reduction quote. Nonprofit leaders are far more sophisticated than most business leaders at mastering the “do more with less” rule. This doesn’t surprise me at all. Nimble nonprofits (and there are many of them) are innovating during this time, not sitting back and ringing their hands.
— Laura Deaton Jul 23, 01:01 PM #
Nonprofits must be nimble to survive in today’s economy. “Business as usual” will just not work.The same for those of us raising funds for our orgnizations, the “cookie cutter and one-size-fits all” approach to fundraising will not surfice. Innovation, courage and persistence is what is needed today. Mix those attributes with integrity, truth and caring and you will have a winning combination.
— David W. Faulkner Jul 23, 01:29 PM #
I find it hard to trust data collected through a voluntary Web survey. How did Guidestar prevent selection bias? Also, compared to the non-profit sector in Michigan, the respondents over-represent arts & culture, and large organizations.
— Daniel Jenuwine Jul 23, 01:56 PM #
It is my experience that non-profits tend to fall into two categories: those who have an ostrich mentality in hopes that the “best of times” will not become the “worst of times”…and those who choose to plan well, innovate, and act with purpose to ensure the financial strength and viability of their organization, regardless of the economic circumstances. Non-profits who take the latter approach can best control their own destiny.
— Linda Reynolds Jul 24, 08:55 AM #
Incomes are down, giving is down..I took an innovative business model and arrived at a unique way to address both..email me if interested.
— Price Futrell Jul 27, 05:51 PM #