Fundraising seen emerging from recession

Overall fundraising revenue grew 12.1 percent for the three months ended in April 2010, compared to the same period in 2009, with a big chunk of the increase tied to the outpouring of giving to support relief efforts after the earthquake in Haiti, a new index says.

All nonprofits are emerging from the recession, with smaller nonprofits doing relatively better than mid-sized and larger nonprofits after suffering steeper declines between July 2008 and April 2009, says the inaugural Blackbaud Index of Charitable Giving.

The Index, which will be published monthly and reflects fundraising revenue trends for the previous three months compared to the same period a year earlier at 1,400 nonprofits representing $2.2 billion in annual revenue, also found larger nonprofits showed declines for all of 2009 but now are pulling out of their dive, fueled by relief groups and Haiti-related giving.

Mid-sized nonprofits fared fairly well through 2008 and early 2009 but showed steeper declines later in 2009, the Index says.

Small nonprofits are far less like to have “structural” sources of income, such as monthly giving, endowment income and planned gifts, than are large nonprofits, and thus are more susceptible to the ups and downs the economy, says a report accompanying the Index.

Small nonprofits may be recovering more quickly because they “tend to be localized and work toward meeting community needs like hunger, housing and other human services, donors likely focus more on supporting their causes in tough times,” says the report, written by Chuck Longfield, chief scientist at Blackbaud.

Big nonprofits generally have a much broader and deeper range of income sources, such as monthly giving programs, well-developed planned gift and endowment programs, plus corporate and foundation grants.

So it would be expected that bigger nonprofits “would be slower heading into the trough and a bit slower than small organizations coming out of it,” the report says.

Conceding the reason is not clear why mid-sized nonprofits showed the biggest proportional decline going into the recession and the slowest recovery, the report suggests the cause might be that mid-sized groups may “tend to be more dependent on events, online giving or other sources.”

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