Despite signs that some sectors of the economy are slowly recovering, the outlook for nonprofit organizations is still grim. According to recent results from the 2010 Fenton Forecast: Leadership and Effectiveness Among Nonprofits, nearly two-thirds of survey respondents report they plan to either reduce their giving or keep it the same as last year. This is on top of already reduced giving levels for 2008 and 2009.

Although Americans generally believe that nonprofits are doing a good job – 80 percent of survey respondents have a positive view of nonprofit performance – they are notably cautious about their charitable giving now and in the near future. Giving will decrease or remain static this year, a trend that remains steady even among those with higher incomes. Of those who planned to decrease their giving, 56 percent say they will cut donations by 25 percent or more.

Underscoring this problem is the finding that older Americans ages 50 and older, who are typically a reliable fundraising base, intend to reduce their giving the most.

“This is clearly a challenging time for nonprofits,” said Rob Anderson, Managing Director of Fenton’s New York office and head of the firm’s Corporate Social Responsibility practice. “But there is also an opportunity for nonprofit organizations to connect with supporters and prospects to engage them in the organization’s overall mission. There is a direct correlation between how effectively nonprofits communicate to support their brand and their fundraising results.”

The survey revealed how nonprofits can best communicate news and information about their issues. When asked which sources of information they deem the most credible, respondents ranked traditional news outlets the highest. Social media sites like Facebook ranked near the bottom for credibility. This held true with both younger and older audiences. Yet when asked how they themselves choose to share their opinions on the causes they care about, respondents ranked Facebook as their number one method.

These findings point to both the challenges and enormous opportunity social media presents for nonprofits, particularly the need to package and promote content that will establish their credibility as experts, and be compelling enough to inspire sharing – and action – among online communities. Ways to do this include positioning senior leaders as experts, developing original research, showcasing programmatic results, highlighting stories of real people, and creating opportunities that generate traditional news coverage.

While scaling back by donors can be attributed to fall-out from the tough economy, so too can the ways people evaluate the effectiveness of nonprofits. The study reveals that the number one way people assess whether or not a nonprofit is doing a good job is by how well they manage their donated funds. People want to know that the money is being spent on programs which further the organization’s mission. In addition, the public is looking for nonprofits to provide fact-based and objective information about the issues they champion.

Complete survey results are available here.