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From the President's Office, November 2008

Dear Friend:

Fasten Your Seatbelts: It's Going to Be a Bumpy Giving Season

Mark Twain once wrote, "The report of my death was an exaggeration." Unfortunately, we can't say the same thing about reports on the economy's impact on charitable giving.

For the past several weeks, news organizations throughout the country have found that charitable donations are down at the same time that demand for nonprofits' services is rising. The results of GuideStar's seventh annual nonprofit economic survey indicate that these news stories are right on money (pun unintentional but apropos).

We asked survey participants, "Did total contributions to your organization increase, decrease, or stay about the same during the first nine months of this year compared to the first nine months of 2007?" The number of participants who said that contributions had decreased nearly equaled the number who said they had increased.

We haven't seen results like these in five years:

Change in Contributions

GuideStar Survey Contributions Decreased Contributions Stayed about the Same Contributions Increased Don't Know
October 2008 35% 25% 38% 2%
October 2007 19% 25% 52% 4%
October 2006 19% 27% 50% 4%
October 2005 22% 26% 49% 3%
October 2004 23% 24% 50% 3%
October 2003 35% 22% 39% 4%
November 2002 48% 22% 28% 3%

Participants who said that contributions had decreased identified "Fewer individuals gave" and "Gifts from individuals were smaller" as the predominant reasons for the drop.

At the same time, for the sixth year in a row, participants overwhelmingly said that demand for their organizations' services had grown:

Change in Demand

GuideStar Survey Demand Decreased Demand Stayed about the Same Demand Increased Don't Know
October 2008 6% 27% 64% 3%
October 2007 5% 25% 67% 3%
October 2006 4% 23% 72% 2%
October 2005 5% 24% 70% 2%
October 2004 5% 23% 71% 2%
October 2003 6% 22% 70% 2%

And participants from nonprofits that rely heavily on end-of-year donations reported that they anticipate a rough giving season. Nearly half (49 percent) said that they expect contributions for the last quarter of 2008 to lag behind those from the last quarter of 2007.

Got Any Good News?

Well, 43 percent of grantmakers did say that their organizations gave more in grant money during the first nine months of this year than during the first nine months of 2007. Plus, another survey found that nearly 70 percent of on-line donors expect to give as much or more at the end of this year than they have in the past. (See "On-line Holiday Giving May Exceed $3 Billion.")

And, as part of the Emergency Economic Stabilization Act of 2008, Congress extended the IRA charitable rollover through 2009. The rollover allows Individual Retirement Account holders to donate up to $100,000 a year to charity directly from their IRAs without declaring the distribution as income. That's welcome news both for Individual Retirement Account holders facing mandatory payouts from their IRAs and for nonprofits whose support comes primarily from older donors. (See "IRA Charitable Rollover Extended.")

Will it be enough? Only time will tell. But we can hope that the increased attention that nonprofits have received in recent years has translated into increased awareness of the important roles they play in almost everyone's life—and that this increased awareness, along with widespread reports on nonprofits' current funding struggles and increased demand, will motivate donors to do what they can at this critical time.

About the Survey

GuideStar's seventh annual nonprofit economic survey was conducted on-line October 6-20, 2008. Some 2,927 individuals representing at least 2,730 charitable organizations participated. View the survey report

Suzanne E. Coffman, November 2008
© 2008, GuideStar USA, Inc.

Suzanne Coffman is GuideStar's director of communications and editor of the Newsletter. She thinks All about Eve, a line from which the title of this article is adapted, is a brilliant movie.

IRA Charitable Rollover Extended

Note: The following discussion is provided for informational purposes only and is not intended to serve as legal or tax advice. For specific information about provisions of the Emergency Economic Stabilization Act of 2008 affecting charitable contributions, consult your tax adviser or attorney.

For older donors and nonprofits that rely on their support, a glimmer of good news emerged from last month's economic turmoil: Congress extended the IRA charitable rollover as part of the Emergency Economic Stabilization Act of 2008.

Expand Your Organization's Reach and Get GuideStar Premium for FREE

The giving season is fast approaching. More and more donors are going on-line to research their giving decisions. Put your organization's best foot forward by updating your report on GuideStar. To thank you for taking the time to update, we'll give your organization one free seat of GuideStar Premium, a $1,000 value.

IRS Updates, November 2008: Mini-Courses on the New 990 and a Colleges and Universities Project

Last month, the IRS launched on-line mini-courses on the new 990 and kicked off a colleges and universities compliance review.

Working Your Organization's Network

When an organization has an open position, it typically relies on advertising the job through traditional means, such as on-line job boards and newspaper classifieds. Many organizations, however, overlook one of the most useful resources available to them in the hiring process: their personal and professional networks.

According to a 2001 study by the U.S. Department of Labor, almost half of all job seekers (48 percent) obtain their jobs through referrals. Additionally, numerous publications report that between 60 and 80 percent of executive-level positions are filled through networking or referrals. In fact, the executive search industry in the United States is built upon the premise that senior-level positions are filled through actively making connections with a targeted set of people pre-identified by an organization. The ability to leverage and extend an organization's known relationships—and to market an organization and its opportunities to this group—is key to making networking work as a viable recruitment source.

On-line Holiday Giving May Exceed $3 Billion

Survey results commissioned by Convio, the constituent relationship management software and services provider, indicate that on-line donors plan to be generous during the 2008 holiday season.

Convio contracted with JupiterResearch, a Forrester Research company, to add questions about on-line support for nonprofit organizations to the researcher's annual U.S. On-line Retail Consumer Survey. The study was conducted September 17-24, 2008, and thus reflects some of the economic challenges that donors and nonprofits are currently facing.

The survey found that:

Fundraising Basics: The Old and New

With new and emerging technologies surfacing in the fundraising realm, fundraisers today have a plethora of choices. Strategies and plans have become more complex and require the use of a variety of tactics.

How is a nonprofit to determine which tactics to use and decipher which ones will net the best response?

Good fundraisers know that the only way to get the answer to this question is to know your audience and experiment with different tactics. But as seasoned fundraisers also know, the luxury of experimentation isn't always possible.

To get the conversation going, start with the basics. Today's basics are not the same as the basic fundraising tactics of a decade ago. The rules have changed. But, nonetheless, the old tactics and new tactics should be evaluated and given fair consideration by nonprofits of all shapes and sizes.

It can be easy to get caught up in the latest and greatest technologies and lose sight of traditional, yet effective, ways of fundraising. Below are lists to help nonprofits combine the old ways of fundraising with the new to develop a truly multi-channel campaign that will help increase effectiveness.

Golf Tournaments Can Be Record Fundraisers, but...

Excerpt from Going for the Green! An Insider's Guide to Raising Money with Charity Golf

Mark Twain once called golf "a good walk spoiled."

Twain's jibe at the sport of kings captures the love/hate relationship so many golfers have with their sport.

Charity golf tournaments often inspire the same conflicting emotions among the volunteers and organizers who host them. Yet, despite the work, the headaches, and the risk, golf tournaments are some of our most popular special event fundraisers. How can this be?

The answer's pretty simple really. While golf tournaments can be exhausting, time-consuming, and fraught with risk, they can be downright satisfying and profitable if done right. Ultimately, a golf tournament may be the hardest work you'll ever love.

Have you worked as one of the following?

10 Tips for Writing a Feature Press Release

The winter holidays represent the perfect season for charities to send out feature press releases. These releases offer you added opportunity for straight pickup by media outlets worldwide. Donors are thinking about their end-of-year giving, and news organizations are reporting on how to give to charity. Feature releases and even just engaging photos with smart captions give you a way to take advantage of this attention and get your message before new audiences. The following tips will help you adapt your message into a feature release.