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The Near Future of Fundraising

 

We’re in the midst of the giving season, a time when many nonprofits raise the majority of their contributions for the entire year. Last year individual donations fell for the first time in many years. Soon we’ll know how 2009 turns out, but so far the indicators—things like the unemployment rate and the psychology of the stock market and personal confidence—suggest a tough year. Read about GuideStar’s own economic surveys >

There is an important new report out from Giving USA that looks at how long it will take for the nonprofit sector to get back to normal funding levels. The bottom line from the report is sobering but not surprising: it will take a few years for the sector’s contribution revenues (as opposed to fees and contracts) to match where they were in 2007. Regarding individuals, the report concludes, “It is likely that donations from households and individuals will not reach their 2007 levels until at least three years after the end of the current recession.” Why is this important? As we know from the annual Giving USA surveys, 75 percent of charitable contributions come from individuals. In comparison, foundations contribute about 13 percent and corporations only about 5 percent.

As for foundations, the recovery could take even longer, depending on the state of the stock market. After the 1973-1974 recession, for example, it took foundations nearly 10 years to recover to pre-recession levels. But some of this slow recovery could be affected by the creation of new foundations and tax policies. The Foundation Center is out with a new report that reports foundation giving will likely decline by more than 10 percent in 2009. Based on responses of close to 600 foundations, Foundations’ Year-end Outlook for Giving and the Sector also finds that continued reductions are expected in 2010.

The Giving USA report ends with a few good tips on fundraising strategy. The key one to me: “Keep demonstrating your organization’s success and impact. Continue to communicate and to make your organization’s story known.” Nancy Rabin, a New York-based fundraising consultant, suggests this as well: “Be candid, but upbeat. Donors are hungry for good news.” Good luck to all, and stay positive.

Topics: Economy Fundraising Nonprofits