Inside Philanthropy

A blog on philanthropy and nonprofit news and issues. A publication of Philanthropy Journal.

December 28, 2009

Hint of optimism for giving sector

By Todd Cohen

The recession has been tough on the giving sector but a glimmer of optimism is peeking through the gloom.

First, the bad news: Eighty percent of over 100 nonprofit leaders surveyed by Bridgespan said their funding had been cut, compared to 52 percent a year ago, while the percentage of nonprofits that had laid off staff grew to 43 percent from 28 percent, and the percentage of nonprofits dipping into reserves grew to 48 percent from 19 percent.

The good news from the study is that 42 percent said funders were stepping up support, up from 11 percent a year ago, while 69 percent said redesigning programs to achieve outcomes in a less costly manner was part of their plan, up 10 percentage points from a year ago.

Also reporting greater optimism among fundraisers is a new giving survey by the Association of Fundraising Professionals.

Based on 291 responses to an online survey conducted Dec. 7-11, 34 percent of charities were raising more money this holiday season than the same period last year, when only 23 percent were raising more than the same period a year earlier.

And while fundraisers are split on whether they will raise more in all of 2009 than they did in all of 2008, 59 percent expect their organizations will raise more funds in 2010 than they did in 2009.

A third study, by the Association for Healthcare Philanthropy, says businesses and individuals hit hardest by the recession have shifted their giving to long-term pledges and gift commitments rather than not giving.

The most effective fundraisers, the study says, use a mix of “well-rounded programs and activities” to raise money, “shattering the myth that big-ticket galas, golf tourneys and telethons are the only way to attract donors.”

The most successful fundraising programs have a “sustained emphasis on building relationships and cultivating major gift donors,” the study says.

While it has led to greater demand for nonprofit services, higher nonprofit operating costs and greater stress on givers, the recession also should be prompting nonprofits to rethink the way they raise money and stick to the basics.

What works best is to invest the time and effort to better understand, cultivate and engage givers so they will understand the needs of charities and want to be part of the ongoing effort to better serve their clients.

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