Charities Report Decreased Contributions, Increased Demand

The proportion of charitable organizations reporting decreased contributions rose for the second consecutive year but remained comparable to results for late 2008 and early 2009, this according to a new economic survey released by GuideStar. Conducted online from October 1, 2009, until October 15, 2009, this was the third of three such surveys conducted by GuideStar in 2009.

Compared to the first nine months of 2008, which was not a particularly good year for nonprofits, things were mostly worse in the first nine months of 2009, with 51 percent of organizations that accept contributions reporting that those contributions had decreased, compared to 35 percent last year (in contrast, only 19 percent of organizations reported a decrease in contributions in 2007). Similarly, 36 percent of grantmakers reported a decrease in monetary awards, versus 16 percent in 2008.

There were no statistically significant differences in declining contributions across organization size, program area, or geography. Many respondents, however, cited a decrease in state and local funding as the major reason that their revenue was down. On the other hand, a smaller number commented that stimulus funds from the American Recovery and Reinvestment Act had helped stabilize the finances of their organizations during the year.

Among the findings of the survey:

• 51 percent of respondents who accept contributions saw a decline in contributions over the first nine months of 2009 versus the same period in 2008. The major factors cited for a decline in contributions were fewer individuals giving (69 percent) and smaller gifts (69 percent).
• 62 percent of respondents had experienced an increase in demand for their organization’s services in 2009.
• 36 percent of grantmakers decreased total monetary payouts; 27 percent gave more.
• Despite the tough year, most organizations were hopeful about 2010. Some 36 percent planned budget increases, and 29 percent expected to be able to maintain their current level of expenditures.
• For those organizations that expected to reduce their 2010 budgets, reduction in program services (59 percent) and salary freezes (54 percent) were the most frequently used techniques for making ends meet.