New Report: The Effect of the Economy on the Nonprofit Sector

Posted by on July 27, 2009

Half of charities saw spring donations drop: survey

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 conducted by 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.”

Ottenhoff and Bradford Smith, president of the Foundation Center, warned that there is plenty of data to suggest that the worst has yet to come.

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, he said, driven in part by the rising unemployment rate.

Ottendorf said that 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.

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.

A copy of the report can be downloaded here.

http://whatmatters.uwde.org/guidestarreport.pdf