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Slide in fundraising slows

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PJ staff report

Compared to last year, the decline in fundraising revenue spurred by the recession is slowing, a new report says.

Roughly 37 percent of charities and foundations surveyed say giving during the first nine months of the year fell, down from 51 percent of groups that saw a drop in the same period during 2009, says the fundraising survey conducted by the Nonprofit Research Collaborative.

About 36 percent of the roughly 2,500 organization surveyed say fundraising was up during the latest nine-month period, which does not include the lucrative holiday-giving season, while 26 percent say giving was flat.

While giving appears to have improved slightly, it still has not rebounded to the pre-recession levels seen in 2006 and 2007.

“We are beginning to see some positive signs, but despite that giving still has a long way to go to return to the levels it was at three or four years ago,” Patrick M. Rooney, executive director of the Center on Philanthropy at Indiana University, which spearheaded the collaborative, says in a statement.  “One-fifth of charities in the survey said their budgets for 2011 will be lower than for 2010, forcing many of them to look at cuts in services, salaries and staff.”

Among the eight sub-groups of charities, only the international category saw a majority of charities with an increase in giving this year over last, driven in large part by gifts in response to the earthquake in Haiti and the floods in Pakistan.

In the health, religion and public-society-benefit categories, more organizations saw fundraising drops than increases, while giving was flat for arts, education, environment/animals and human services.

Organizations with larger annual expenditures were more likely to see giving increase this year, with 46 percent of organizations with expenditures of $20 million or more seeing growth in giving, while only 23 percent of groups with less than $25,000 in expenses saw increases.

Among groups that saw giving decline this year, about two-thirds saw say a drop in individual was a primary factor, while 53 percent say grant dollars from foundations were down and 55 percent reported less income from the corporate sector.

Amid these funding declines, demand for services was up at 68 percent of responding organizations, up from 62 percent in the first nine months of 2009.

All eight subsectors reported more organizations with increases in demand than with decreases, the report says, with the human-services subsector leading the way with spikes among 78 percent of responding organizations.

Looking ahead to 2011, six in 10 organizations within the international category are expecting budget increases, while four to five groups in 10 within the other seven categories are anticipating growth.

Despite that fairly rosy outlook, two in 10 organizations expect their budgets to shrink, and 7 percent fear financial hardship could force them to closer their doors permanently.

Among all grantmakers, slightly more than half received more applications for funding this year than last, and almost half those received more requests say they plan to increase their budgets next year.

In addition to the Center on Philanthropy, the Nonprofit Research Collaborative includes the Association of Fundraising Professionals, GuideStar, the Foundation Center, Blackbaud, and the National Center for Charitable Statistics.

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