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Nonprofits and the Economy: Is the Tide Turning?

Things may finally be looking up for the nonprofit sector. In July, GuideStar asked individuals associated with charitable organizations how their nonprofits had faired financially during the first six months of 2003 compared to the first half of 2002.

The results were surprisingly more positive than the responses to a similar survey we conducted in November 2002. Then, nearly half of the participants said contributions had decreased from 2001 levels:

  Decreased About the Same Increased Don't Know
July 2003 35% 20% 39% 5%
November 2002 48% 22% 28% 3%

"This is good news for nonprofits," noted GuideStar's president and CEO, Robert G. Ottenhoff. "In contrast to last fall's results, participants who said contributions had increased outnumbered those who reported decreases. Because most charities receive the bulk of donations in November and December, this is a particularly encouraging trend."

Unfortunately, the majority (63 percent) of respondents also said that demand for their services had increased, and many organizations reported that they are struggling. "Had to lay off 1/3 of our staff," stated an anonymous participant from Lawrence, Kansas. "Our organization is being financially cut to the point it may not survive," said an anonymous participant from Tucson, Arizona.

Only in the Southwest and Far West did the number of people reporting lower contributions exceed those reporting higher ones. New England and the Rocky Mountains had the greatest proportion of respondents who said contributions had increased (47 and 46 percent, respectively), and the Far West had the smallest (33 percent).

Mutual and membership benefit, general health care, and human service organizations had the highest proportion of participants who reported increased contributions. Although results varied by nonprofit size, there was no correlation between size and contribution levels.

GuideStar will do a follow-up survey in October to see if the positive trend continued during the third quarter of 2003. The results of that survey will be released in mid-November, in time for the giving season.

Anyone associated with a charitable organization (specifically, a nonprofit eligible to receive tax-deductible contributions) is welcome to participate in the October 2003 survey. To be added to the survey invitation list, send your name, type of organization (public charity or private foundation), and e-mail address to Suzanne Coffman.

Survey Report

About the Survey

GuideStar invited 2,824 persons associated with public charities and private foundations to take the survey. Of that number, 795, or 28 percent, participated. The survey was conducted on-line July 9-23, 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. 

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