From the President's Office, December 2009

Dear Friend:

The results of our eighth annual nonprofit economic survey are in. The news is mixed: The number of nonprofits reporting decreased contributions is significantly higher than last year, which in turn was markedly higher than in 2007. On the other hand, the results of our latest survey are not that dissimilar from the two surveys we conducted earlier this year. (See the articles we published in May andAugust.)

What these results say to me is that the recession hit charitable organizations hard at the end of 2008, but that giving levels held even at those lower levels throughout 2009 and did not significantly decline further throughout the year. Once again, I am struck by the resilience of our sector. Although 7 percent of the nonprofits in our survey reported that they are in danger of closing next year because of financial reasons, the remaining 93 percent are hanging on. It hasn't been easy, but, once again, nonprofit leaders, staff, and volunteers are doing what they must do to fulfill their organizations' missions.

And they're prepared to do so next year. Nearly half (46 percent) of the nonprofits in our latest survey said their organizations receive the majority of contributions during the fourth quarter of the year. Of that number, 45 percent expect contributions to be down compared to the 2008 giving season. Still, only 31 percent of all of the organizations in the survey have reduced their 2010 budgets, and more than a third (36 percent) have increased them. Last July, I noted, "There is something in the DNA of a successful nonprofit leader that makes us eternal optimists." Nonprofits' plans for 2010 show that that spirit is alive and well, even after a difficult year.

In that same post, however, I reported being asked if nonprofits were prepared for a "new economic normal": "All three conversations presumed we are headed to a new economic reality, for both the general economy and the nonprofit sector, where there is high unemployment, a sputtering stock market, and lower charitable giving from foundations and individuals."

The stock market seems to be recovering, but we've got high employment and reduced charitable giving by individuals—the two primary reasons survey participants cited for reduced contributions were "fewer individuals gave" and "gifts from individuals were smaller." Our latest survey also found that more than one-third (36 percent) of grantmakers reduced payouts in 2009, and another 36 percent held their grantmaking to 2008 levels. I predict that we'll see further reductions in grantmaking in 2010.

I continue to believe that 2010 will be challenging for nonprofits. I am heartened, however, by the results of our latest survey. Last summer, I was concerned that the optimism that characterizes the sector would prevent many of us from adapting to economic necessity. I asked, "Is the optimistic, can-do DNA that makes nonprofit leaders succeed despite the odds working against us as the 'new normal' begins to take shape?" The results of our latest survey indicate that the answer is probably "No." Nonprofit leaders and their organizations persevere. I wish continued success to all of you through the end of this year and into the New Year.

Happy holidays,

Bob Ottenhoff
President and CEO

Topics: Economy