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Mixed Economic Picture for Charities

New GuideStar Survey Reveals Both Good and Bad News

The rumors of a recovery in the nonprofit sector may not be premature.

The results of GuideStar's October 2003 nonprofit economic survey show a slight improvement over the end of last year and mirror this summer's mid-year review:


  Decreased Stayed about the Same Increased Don't Know
Oct. 2003 35% 22% 39% 4%
July 2003 35% 20% 39% 5%
Nov. 2002 48% 22% 28% 3%

Unfortunately, this good news isn't the whole story. The results also indicate that the improvement hasn't reached everyone and that organizations of all sizes, working in all subject areas, and at all contribution levels are facing greater demands for their services and higher expenses.

"We were pleased to learn that many charities are receiving increased support compared to 2002," said Robert G. Ottenhoff, GuideStar's president and CEO. "It is significant, however, that most participants reported greater demand for their organizations' services. A number also noted that they have to work harder to garner the same level of contributions and that their organizations' expenses have risen. Thus even charities that have received increased support are facing substantial challenges."

"We're ... definitely working harder to raise the same amount!" said Ruth Hansen, director of annual giving for the Polish American Association in Chicago, Ill. "We saw a >20% decline in donations and a sharp increase in demand for services," commented Nicci Noble, Internet development director for The Salvation Army—Golden State Division in San Francisco, Calif.

Elinor Bugli, president of the Carson City Symphony Association in Nevada, reported, "Our income increased slightly, but expenses increased more than income." Todd A. Landry, president and CEO of Spaulding for Children in Houston, Texas, noted, "Despite the state government cutbacks and decreased foundation and individual giving, we have continued to run a balanced budget. We have, however, accomplished this primarily through workforce reductions. It certainly hasn't been fun."

Synopsis of Survey Results

Mild is the operative term for any recovery in the nonprofit sector. Although the greatest number of participants said contributions had increased, a nearly equal percentage said they had decreased, and more than one-fifth said they were stagnant.

New England, the Southeast, and the Great Lakes had the greatest percentage of participants reporting increased contributions and the smallest reporting decreased contributions.

The Plains and Rocky Mountains had the smallest proportion of respondents reporting increased contributions. The Plains, Far West, and Rocky Mountains had the greatest percentage of participants reporting decreased contributions. The Rocky Mountains had the greatest proportion of respondents reporting increased demand; the Mideast had the smallest.

Larger organizations fared better than smaller ones. The largest organizations had the greatest percentage of respondents who reported that contributions had increased. This figure dropped steadily as budget levels decreased. The two largest budget levels had the smallest proportion of respondents reporting decreased contributions.

Organizations in the Medical Research; Diseases, Disorders, Medical Disciplines; and Health—General, Rehabilitative categories were among the "top five" both for greatest percentage of participants reporting increased contributions and for fewest reporting decreased contributions.

The vast majority of participants reported that demand for their organizations' services had increased. There appeared to be no correlation between change in demand and organization size, mission, or change in contribution levels.

Survey Report

About the Survey

GuideStar invited 2,858 persons associated with public charities and private foundations to take the survey. Of that number, 660, or 23 percent, participated. The survey was conducted on-line October 17-31, 2003.

suzanne-coffman-150x150.jpgThe preceding post is by Suzanne Coffman, GuideStar’s editorial director. See more of Suzanne’s sector findings and musings on philanthropy here on our blog. 
Topics: Economy Charity Nonprofits