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Down but Not Defeated: Results of GuideStar's Eighth Annual Nonprofit Economic Survey

Overview

A survey of public charity and private foundation employees was conducted online from October 1, 2009, until October 15, 2009, the eighth annual nonprofit economic survey conducted by GuideStar, and the third of three such surveys conducted by GuideStar in 2009. The purposes of the survey were to compare how charitable organizations fared during the first nine months of 2009 to previous years and to try to gauge the effect of the downturn in the economy on the American nonprofit sector. There were 2,565 usable responses, 2,381 (93 percent) from public charities and 184 (7 percent) from private foundations.

Compared to the first nine months of 2008, which was not a particularly good year for nonprofits, things were mostly worse in the first nine months of 2009, with 51 percent of organizations that accept contributions reporting that those contributions had decreased, compared to 35 percent last year (in contrast, only 19 percent of organizations reported a decrease in contributions in 2007). Similarly, 36 percent of grantmakers reported a decrease in monetary awards, versus 16 percent in 2008.

There were no statistically significant differences in declining contributions across organization size, program area, or geography. Many respondents, however, cited a decrease in state and local funding as the major reason that their revenue was down. On the other hand, a smaller number commented that stimulus funds from the American Recovery and Reinvestment Act had helped stabilize the finances of their organizations during the year.

Among the findings of the survey:

  • 51 percent of respondents who accept contributions saw a decline in contributions over the first nine months of 2009 versus the same period in 2008. The major factors cited for a decline in contributions were fewer individuals giving (69 percent) and smaller gifts (69 percent).
  • 62 percent of respondents had experienced an increase in demand for their organization's services in 2009.
  • 36 percent of grantmakers decreased total monetary payouts; 27 percent gave more.
  • Despite the tough year, most organizations were hopeful about 2010. Some 36 percent planned budget increases, and 29 percent expected to be able to maintain their current level of expenditures.
  • For those organizations that expected to reduce their 2010 budgets, reduction in program services (59 percent) and salary freezes (54 percent) were the most frequently used techniques for making ends meet.

Selected Details

Contributions

Change in Contributions, 2002-2009
Period Covered by SurveyContributions DecreasedContributions Stayed about the SameContributions IncreasedDon't Know
Jan.-Sept. 2009 51% 25% 23% 1%
Mar.-May 2009 52% 29% 18% 1%
Oct. 2008-Feb. 2009 52% 27% 20% 1%
Jan.-Sept. 2008 35% 25% 38% 2%
Jan.-Sept. 2007 19% 25% 52% 4%
Jan.-Sept. 2006 19% 27% 50% 4%
Jan.-Sept. 2005 22% 26% 49% 3%
Jan.-Sept. 2004 23% 24% 50% 3%
Jan.-Sept. 2003 35% 22% 39% 4%
Jan.-Nov. 2002 48% 22% 28% 3%
Reasons Contributions Decreased, 2008-2009
ReasonJan.-Sept. 08Oct. 08-Feb. 09Mar.-May 09Jan-Sept. 09
Fewer individuals gave 63% 71% 69% 69%
Gifts from individuals were smaller 60% 71% 68% 69%
Corporate gifts were smaller 34% 39% 38% 42%
Private foundation grants were smaller 29% 34% 37% 41%
Private foundation grants were discontinued 13% 23% 22% 26%
Corporate gifts were discontinued 13% 25% 23% 25%
Government grants were smaller 13% 13% 14% 17%
Government grants were discontinued 7% 8% 7% 8%
Government contracts were smaller 6% 6% 6% 8%
Government contracts were discontinued 2% 3% 3% 4%

 

The Giving Season

Some 46 percent of participants reported that their organizations receive the majority of contributions in October, November, and December, i.e., the giving season. We asked these respondents how they thought their nonprofits would fare during the last quarter of 2009, compared to the same period in 2008.

Predictions for the Giving Season, 2007-2009
YearExpect Contributions to DecreaseExpect Contributions to Stay about the SameExpect Contributions to IncreaseNo Idea
2009 45% 31% 19% 5%
2008 49% 28% 20% 3%
2007 9% 28% 60% 4%

Demand for Services

Change in Demand for Services, 2003-2009
Period Covered by SurveyDemand DecreasedDemand Stayed about the SameDemand IncreasedDon’t Know
Jan.-Sept. 2009 7% 30% 62% 1%
Jan.-Sept. 2008 6% 27% 64% 3%
Jan.-Sept. 2007 5% 25% 67% 3%
Jan.-Sept. 2006 4% 23% 72% 2%
Jan.-Sept. 2005 5% 24% 70% 2%
Jan.-Sept. 2004 5% 23% 71% 2%
Jan.-Sept. 2003 6% 22% 70% 2%

 

Budgets

Budgets, 2009-2010
Budget PeriodDecrease(d)Stay(ed) about the SameIncrease(d)Don't Know 
2010 (predicted) 31% 29% 36% 4%
Mar.-May 2009 36% 27% 36% 1%
Oct. 2008-Feb. 2009 35% 26% 38% 2%

 

Grantmaking

Change in Grantmaking, 2002-2009
Period Covered by SurveyAmounts Awarded DecreasedAmounts Awarded Stayed about the SameAmounts Awarded IncreasedDon't Know
Jan.-Sept. 2009 36% 36% 27% 1%
Mar.-May 2009 36% 39% 23% 1%
Oct. 2008-Feb. 2009 31% 44% 22% 2%
Jan.-Sept. 2008 16% 39% 43% 2%
Jan.-Sept. 2007 12% 33% 52% 3%
Jan.-Sept. 2006 14% 32% 52% 3%
Jan.-Sept. 2005 13% 38% 47% 2%
Jan.-Sept. 2004 19% 33% 45% 2%
Jan.-Sept. 2003 35% 36% 24% 4%
Jan.-Oct. 2002 40% 28% 18% 15%

Download the 2009 annual nonprofit economic survey report
Read about GuideStar's previous nonprofit economic surveys

Chas. E. McLean and Suz. E. Coffman, December 2009
© 2009, GuideStar USA, Inc.

Chuck McLean is GuideStar's vice president for research. He and research assistant Carol Brouwer conducted, analyzed, and prepared the report on the October 2009 nonprofit economic survey. Suzanne Coffman is GuideStar's director of communications and editor of the Newsletter.

Topics: Economy