Giving USA’S Annual Report: How to Gauge the Results from 2008 and Plan for the Rest of 2009

by Robert I. Evans & Avrum D. Lapin

With the results from Giving USA regarding charitable giving in 2008 released earlier this month, we pose a critical question: what are some of the important trends we can discern from the report as we turn the corner into the second half of 2009?

Note that Giving USA reported estimated charitable giving results of $307 billion for 2008, as compared with announced results from 2007 of $314 billion.  Watching trends and considering appropriate responses are critical steps that all non-profits should consider . . . especially in difficult times.

Based on three aspects of the Giving USA report’s findings, we can conclude that there are certain trends over which we probably have very little control but which have significant implications for every non-profit organization’s fundraising results:

1. Planned giving will probably continue to decrease slightly. We have seen a small but consistent decline in the U.S. death rate, which has resulted in a statistical decrease in planned giving dollars for non-profits. Planned giving has long been an under-utilized option for Jewish community institutions and especially for houses of worship. Despite this drop in deferred/testamentary gifts, “best practices” dictate that nonprofit organizations must institute or grow Planned Giving programs as a strong component of a forward-looking development program. Non-profits are often, by necessity, short-sighted, but with the aging of the U.S. Jewish community, planned giving options will increasingly loom larger as major parts of viable fundraising efforts.

2. Corporate giving will continue to decline as a result of a sharp drop in recorded corporate profits. As we all know, many corporations have experienced layoffs and shrinking profits. This has naturally affected the amount of charitable or “marketing” dollars made available by corporations. Despite the shrinking pool of charitable support, many nonprofits cannot ignore the corporate/business world as a vital philanthropic resource. Securing charitable dollars from corporate sources requires even more hard work, networking and outreach by non-profits because the decisions are more often based on corporate positioning and PR concerns rather than strict philanthropic interests.

3. Foundation giving will undoubtedly decline because of two rollercoaster years on Wall Street. Wall Street results in 2008 and 2009 will force some foundations to at least reduce their grants; some will merge or close. Some large Jewish foundations are still in the process of reorganizing their budgets and staff and re-evaluating their strategic directions. The results will be reflected in 2010 and 2011. Almost all foundations are encountering an influx of grant requests and there are painful decisions they are making about areas that will be impacted as a result of fewer dollars to award. Most foundations will not happily invade the corpus of their investments so non-profits need to make even more compelling arguments to those foundations that are still accepting grant requests. A word from years of experience: be sure to cultivate personal relationships with foundation staff and board members as this will make a large difference in decision-making.

So here are five ideas and suggestions to implement/consider for the balance of 2009:

• Most vibrant Jewish non-profits cannot and should not overlook these three sources of support (deferred giving, corporate support, and grants from foundations) although individuals account for about 75% of all giving dollars.
• The work to secure charitable dollars will be harder but it needs to be done. Don’t shy away from making approaches because you believe that “they don’t have any money.”
• Keep in mind that despite these indicators, all three giving sources (deferred, corporate, and foundation gifts) still represent significant dollars and can make a positive impact on the future of your organization!
• Yes, the pie has gotten smaller for the time being, but it is still a pie that generates billions of dollars in donations each year.
• When the economy rebounds and foundation corpuses and corporate giving programs grow again, the efforts that you make today will position your organization for success going forward.

Robert I. Evans, Managing Director, and Avrum D. Lapin, Director, are principals of The EHL Consulting Group, of suburban Philadelphia, and are frequent contributors to eJewishphilanthropy.com. EHL Consulting is a proud member of the Giving Institute. The Institute is a leader in tracking data and following trends in the nonprofit sector. EHL Consulting, will continue to develop other articles relating to the results from GUSA and offer their insights into how they specifically impact the Jewish community. EHL Consulting works with dozens of non-profits across the globe on fundraising, strategic planning, and non-profit business practices. Become a fan of The EHL Consulting Group on Facebook.