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New Survey Gives Credence to the “New Normal”

 

GuideStar’s latest economic survey has just been released, and you can find the results. Over the last two years, we’ve increased the number of economic reports we undertake in order to get a better feel for what is happening in the field. This was our first economic survey this year and the fourth survey we have released in the last 18 months. Participation in the survey was high, with more than 7,000 nonprofits responding.

The headline for this latest report: the economic recovery is slow and painful for many nonprofit organizations.

About 40 percent of respondents have seen a further decline in contributions in the first five months of 2010 compared to the first five months of 2009. at the same time, a majority (63 percent) have seen an increase in demand for their services.

Given the general state of the economy, I don’t think we should be too surprised by these results. After a nice boost in the first half of the year, the recovery seems to have stalled and maybe is even beginning to drift—sideways if we’re lucky, but perhaps even downwards.

We know from experience that the most accurate predictors of charitable giving are such indexes as the stock market, the unemployment rate, and consumer confidence. If these are uncertain or declining, so too will charitable giving. And now we have a new factor: the sorry condition of state government budgets, which is putting enormous pressure on nonprofits that rely on fees for services.

When the Great Recession hit in late 2008, I began writing about the “new normal” for the nonprofit sector—a period where the nonprofit sector will no longer experience the revenue growth (from foundations, individuals and government) we had become accustomed to over the last few decades. In Monday’s Wall Street Journal, Mort Zuckerman said he thought the “new normal” meant that our children will not have a better economic life than we have had. That’s very sobering, more than I’m willing to admit at this point. I wasn’t saying that the “new normal” meant nonprofits wouldn’t have any resources, since many still have plenty, but that for most the next few years will be a time when consolidation and contraction are more likely than growth and expansion.

Back in 2009, a few friends and correspondents took me to task, saying I was unnecessarily negative and that things would quickly bounce back to normal. The “new normal” may not apply for certain subsectors of the nonprofit sector and for some regions of the country, but in general our new survey underscores the fact that we still have a slow and painful recovery ahead.

To read GuideStar’s press release about our economic survey, please click here.

Bob.jpgThe preceding is a guest post by Bob Ottenhoff,  Chief Executive of the Center for Disaster Philanthropy. With an entrepreneurial spirit, strong technology focus, and a quest to make an impact in the world, Bob has the ability to take an organization and lead it into strong performance, sustainability, and industry leadership.

Topics: Economy GuideStar