The Economy’s Effect on Fundraisers

In June, charity database information provider GuideStar surveyed 7,014 public charity and private foundation employees to gauge the effect of the downturn on fundraisers. GuideStar published the results in a report, The Effect of the Economy on the Nonprofit Sector: A June 2010 Survey, written by Vice President of Research Chuck McLean and Research Assistant Carol Brouwer.

The survey, which took place online from June 14 to June 28, received 6,434 responses from public charities and 580 responses from private foundations; 97 percent of organizations surveyed accept contributions, and 83 percent award grants. According to McLean and Brouwer, 40 percent of respondents saw further declines in contributions in the first five months of 2010, while 63 percent saw an increase in demand for their services, putting even more pressure on fundraisers.

Organizations that rely on reimbursement for services from state and local governments experienced cash flow issues due to delays in payments, and many faced upcoming state budget cuts, even further hindering funding, the report finds. One area that went against the grain was food and nutrition organizations. For the most part, contributions largely kept pace with the increased demand — only 24 percent experienced a decline in donations, while 56 percent experienced a modest or substantial increase.

Here are more findings from the report.

Did total contributions increase, decrease or stay about the same from Jan. 1, 2010, to May 31, 2010, compared to the same period last year?

• 40 percent said contributions decreased
• 30 percent said contributions increased
• 28 percent said contributions were about the same
• 2 percent were unsure

Evaluating further, 6 percent responded that contributions increased greatly and 24 percent said they increased modestly (making up the 30 percent); 26 percent said they decreased greatly and 14 percent said they decreased modestly (40 percent).

What factors caused total contributions to decrease?

• 67 percent said fewer individuals gave
• 66 percent said gifts from individuals were smaller
• 40 percent said corporate gifts were smaller
• 40 percent said private foundation gifts were smaller
• 22 percent said private foundation grants were smaller
• 20 percent said government grants were smaller
• 19 percent said corporate gifts were discontinued
• 10 percent said government grants were discontinued
• 10 percent said government contracts were smaller
• 9 percent said other factors contributed
• 5 percent said government contracts were discontinued
• 2 percent weren’t sure

Did demand for your organization’s services increase, decrease or stay about the same?

• 63 percent said demand increased
• 29 percent said demand stayed about the same
• 6 percent said demand decreased
• 2 percent weren’t sure

Of the respondents, 28 percent said that demand increased greatly and 35 percent said it increased modestly, while 1 percent said it decreased greatly and 5 percent said it decreased modestly.