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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.
Topics: Charitable Giving