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A Light at the End of the Tunnel? Results of the 2004 GuideStar Nonprofit Economic Survey


Will 2004 be remembered as the year when the economy turned the corner for charitable organizations? The results of GuideStar's third annual nonprofit economic survey indicate that it just might.

GuideStar asked individuals associated with charitable nonprofits how their organizations fared financially during the first nine months of 2004 compared to the first nine months of 2003. Half of the nonprofit participants reported that contributions to their organizations had increased. Another 24 percent stated contribution levels had stayed the same, 23 percent indicated a decrease, and 4 percent did not know.

These results show improvement over the 2003 and 2002 surveys:

GuideStar Survey Contributions Decreased Contributions Stayed about the Same Contributions Increased Don't Know
October 2004 23% 24% 50% 3%
October 2003 35% 22% 39% 4%
November 2002 48% 22% 28% 3%


At the same time, however, 71 percent of respondents said that demand for their organizations' services had grown.

"GuideStar's 2004 nonprofit economic survey is good news for charities," said Robert G. Ottenhoff, GuideStar's president and CEO. "It shows that, after some difficult years, things are improving for nonprofits. We need to keep in mind that although most people said contributions increased 'modestly,' many reported that demand for their organizations' services grew 'greatly,' and that charities across the board are experiencing this upsurge in demand."

Some 4,292 individuals, 99 percent of whom were associated with nonprofit organizations, participated in the survey. At least 3,767 nonprofits were represented (it was not possible to link approximately 11 percent of the nonprofit respondents with specific organizations). All areas of the country and nonprofits of all sizes and in all subject areas were represented in the survey.

Contributions by Region, Organization Size, and Subject Area

The results were remarkably similar throughout the country. Although differences were statistically insignificant, the Plains, Southwest, and Far West regions showed the most improvement (both the highest proportions of respondents reporting increased contributions and the lowest percentage reporting decreased contributions). The Mideast and Rocky Mountains areas showed the least improvement (both greatest proportion of participants reporting decreased contributions and smallest percentage reporting increased contributions).

Participants from extremely large nonprofits (annual expenditures of $20 million or more) were most likely to report that contributions had increased and least likely to say they had decreased. In general, organizations with budgets of $500,000 or more had more favorable results than nonprofits with budgets of less then $500,000.

Animal-related, environmental, and science and technology research institutes/services were among the "top four" subject areas for both greatest proportion of participants reporting increased contributions and smallest reporting decreased contributions. Crime and legal-related organizations came in dead last, with both the lowest percentage of participants reporting increased contributions and the greatest reporting decreased contributions.

Demand by Region, Organization Size, and Subject Area

Some 71 percent of respondents stated that demand for their organizations' services had increased. Of these participants, 42 percent reported that demand had increased "greatly."

Again, results were remarkably similar throughout the country, ranging from 68 percent of New England participants to 73 percent of Southeast and Rocky Mountains respondents reporting increased demand. There was no clear correlation between change in demand and change in contributions or between change in demand and organization size.

Nonprofits in the Employment/Job-Related and Youth Development categories had the greatest proportion (83 percent) of participants reporting increased demand. Organizations in the Diseases/Disorders/Medical Disciplines, Medical Research, and Social Science Research Institutes/Services had the smallest percentage (59 percent) of respondents reporting increased demand.

Grantmakers

Some 45 percent of participants from grantmaking nonprofits reported that the amounts their organizations awarded during the first nine months of 2004 had increased over amounts awarded during the first nine months of 2003. Another 33 percent said amounts awarded had stayed about the same, 19 percent said they had decreased, and 2 percent did not know.

Participants from grantmaking public charities were slightly more likely than respondents from private foundations to report that amounts awarded had increased. Some 52 percent of respondents from grantmaking public charities and 48 percent from private foundations said that the number of grant applications increased during the first nine months of 2004. The majority—67 percent and 68 percent, respectively—of these participants said applications had increased modestly.

Survey Report >

About the Survey

GuideStar e-mailed 62,888 messages inviting GuideStar Newsletter subscribers associated with public charities and private foundations to participate in the survey; 4,292, or 7 percent, of these individuals took the survey on-line between October 13 and 27, 2004. Some 99 percent of these participants were associated with nonprofit organizations, and at least 3,767 organizations were represented in the survey.

Suzanne E. Coffman, December 2004
© 2004, Philanthropic Research, Inc. (GuideStar)

Suzanne Coffman is GuideStar's director of communications and editor of the Newsletter.
Topics: Trends