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Philanthropy During a Recession: Giving USA Report Yields Insights Into What Fundraisers Can Do Now

By June 15, 2009

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The Giving USA Foundation report, produced by The Center on Philanthropy at Indiana University, was released last week and provides information about charitable giving in 2008.

At a webinar, hosted by Campbell & Company, Peter J. Fissinger parsed the numbers for more than 600 people attending via their phones and computers.

The points of the presentation that captured my attention were the following:

  • It could have been worse. U.S. charitable giving was estimated to be $307.65 billion in 2008, the second year in a row it has been above $300 billion. Charitable giving in 2008 fell by two percent in nominal terms, but by 5.7% when adjusted for inflation. Fissinger referred to the latter number as "the way it actually felt."

    Throughout the presentation, we were given both numbers...the nominal and the adjusted. Because I was more interested in "how it felt," the following figures are the adjusted ones.

  • Although the adjusted figures were the worst seen in many years, the fact is that last year the S&P fell approximately 33%. In comparison, the drop in charitable giving looks better than we might have expected.

  • Foundations stepped up to the plate. Foundation funding (which represents 13% of all giving) fell by only 0.8%, despite a steep fall in foundation assets.

  • Corporate giving (which represents 5% of all giving) was down by 8%. Fissinger pointed out that, historically, corporate giving is most affected by GDP, profits, and changes in top marginal tax brackets. Corporate giving, although significantly lower, also bucked the general tide of the recession (corporate profits were down 16%). There was a marked trend toward "in-kind" giving during 2008.

  • Individual giving (which accounts for a huge 75% of total giving) decreased by 6.3%, again bucking the general recessionary trend. U.S. household net worth decreased nearly 18% in 2008.

  • Much to the dismay of everyone, the human services sector was the biggest loser, with contributions sinking by 15.9%. This reversed the historical trend toward greater giving in this area during times of distress. We are accustomed to seeing giving to human services go up substantially when there is a natural disaster or an unnatural disaster, such as after 9/11. No one seems to know why human services giving suffered so during this downturn. Some clues might lie in these trends, according to Fissinger:
    • direct mail results declined.
    • events fundraising declined.
    • the recent rapid growth in the formation of nonprofit organizations resulted in many small nonprofits that were financially vulnerable.

  • The sector that maintained and even grew, was religion...up by 1.6% (giving to religious organizations represents roughly one-half of all individual giving). It should be remembered that this sector probably includes a large component of human services. Possibly, contributions shifted away from secular human service organizations to human services provided by religious organizations. This is my own speculation. Fissinger pointed out the strengths of the religious sector, including:
    • consistent involvement of members/donors
    • frequent requests for contributions
    • tendency for people to become more involved in religious activities during times of stress, such as a recession.

The webinar, which included a lively discussion by an expert panel of development professionals, provided a number of useful fundraising tips for surviving the rest of the downturn. They included:

  • Stay in touch with donors, even if they can't give as much as they did at one time.
  • Explain to donors how their contributions impact your mission.
  • Appreciate your donors and say thank you frequently.
  • Focus on annual gifts, major gifts, and bequests. Wealth transfer is happening, so every nonprofit needs a planned giving program.
  • Tell a compelling story
  • Engage donors continuously.
  • Look at development as a long-term investment.

For more information, see the GivingUSA Press Release. You can also download a the recorded version of the webinar.

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