According to researchers at Indiana University’s Center on Philanthropic Planning who research, write and distribute a report for Giving USA, overall donations to non-profit organizations declined 3.2% in 2009. This follows an overall decline in donation of 2.4% in 2008. While non-profit organization results varied greatly in 2009, giving from individuals, which accounts for $227.4 billion in the United States, showed no decline with 0.0% change from 2008.
Isn’t that interesting, giving from individuals did not decline, even in the midst of high unemployment and recession conditions. Realizing historically that 75% of all philanthropic giving comes from individuals, not corporations or foundations, you can see why the emphasis for non-profit fundraisers is on cultivation of individual donors.
- Giving to the United Ways, Jewish federations and other so called public-society benefit groups declined by 4.2%; education declined 3.2%; giving to the Arts and Culture declined 2%.
- Contributions to social services organizations, environmental organizations, and healthcare raised a modest 2-4% in 2009 after declining sharply in 2008.
- Foundation giving dropped by 8.6% to $38.4 billion, while corporate giving rose by 5.9% accounting for $14 billion.
- Bequest revenue from individual estate was $23.8 billion in 2009. While this category was off 23% in 2009, it holds great promise in the future for non-profits who seek these gifts. It is estimated that over the next 40 years more than $50 trillion will pass from generation to generation with an estimated $ 7 trillion or more being donated to non-profits. So, while no one can predict our economic future, it seems reasonable to recommend specific steps that non-profit organizations can take to assure that they will emerge as a healthy entity poised for growth when the economic downturn has passed.
- Strengthen your Case or Support: Make sure that you have communicated effectively to Board members, staff, and donors about the tremendous positive impact that your organization has made in the past and will make in the future. Make sure that the benefits that you provide for individuals in the community are meaningful, well understood, and documented for authenticity.
- Create a fundraising strategy that truly excites and motivates your Board of Directors: If your Board of Directors is complacent, if they are not giving an exceptional amount of time and money to your organization, then you have a problem that must be fixed. It’s a top priority. A Board of Directors must be ambassadors for your cause, advocates for your vision, donors of time and money. They, above all, must be willing to connect you to others like themselves.
- Get the staff involved: The staff must be informed, engaged and motivated. If you create an environment where employees are respected and their good work is acknowledged you can expect a high level of achievement and an extraordinary degree of commitment. So, set the bar high, establish clear goals, encourage employee involvement, acknowledge and reward exceptional performance.
- Renew a commitment to donors: Through personal dialog in all correspondence make sure your donors “feel” special. Nothing is more important to a donor than personal attention. Say “thank-you” more often, with more urgency, with more sincerity, with more personal attention to detail. Be a good steward of every gift to earn the right to ask for continued support with confidence of success.
- Create a written development plan with 3-5 specific goals for each department member: Your development department needs specific objectives with a clear written tactical plan on how these objectives will be achieved. Goals without written plans are just wishful thinking.
- Keep score: Reaching revenue objectives can be FUN….it’s a game. So, to win at this game you have to keep score. Look at funding trends over the past three-five years. Benchmark where you stand now in all income categories. Establish reasonable expectations for the future. Keep score. And, report weekly/monthly.
- Celebrate victories: There is nothing more demoralizing to staff than to do great work without acknowledgement for a job well done. Pay attention to staff just as you do to donors. Say “thank-you” more often, with more urgency, with more sincerity, with more personal attention to detail.
- Keep your eye on the short term while putting strategies in place for the long run: Increasing annual revenue, improving website donations, upgrading mid-range donations, increasing major gifts, gaining more gifts from corporations and foundations, all must be achieved. An effective fundraising plan should expect gifts from every giving category to go up. At the same time, future gifts through donor gift planning should be in the mix. Create a marketing plan for Planned Gifts this year. In most organizations, planned giving gets the least amount of attention and resources. Yet, for well established organizations with good reputations, estate gifts can provide millions of dollars year after year. Today, there are 77.3 million baby boomers in the United States alone. Sadly, only 7% of them have net assets larger than $250,000. Of those with assets, 12% will leave a legacy gift to non-profits. The amount left to non-profit organizations will be billions nationwide. In Missouri, hundreds of millions are donated to non-profits annually. Make sure your organization deserves a gift, and then asks for it.
- Keep your expenses in line but give your staff enough resources to reach their goals: Take a close look at the past results in every income category. Set specific reasonable objectives to improve income in all categories. Finally, establish and monitor budgets keeping an eye on ROI objectives. Even non-profits should track ROI in a comprehensive manner. Think of it as good “stewardship.”
- Stay focused; say NO to anything that takes you off track: It’s easy, in most organizations, to get side tracked. There is much to do, too few people to get it done. Once you have identified objectives and created a written development plan, this document must be transparent with buy in from upper management and the Board. Then, execute the plan. Say “no” to lesser priorities.
Here’s a quick look at history…
While economic and market statistics are ever changing, history is the best guide we have to inform and educate ourselves during uncertain times. Whether it is the Great Depression, World War II, Vietnam, the ‘70s malaise, the 1987 recession, the bursting tech bubble or more recent catastrophic events such as the September 11 terrorist attacks or the devastation of hurricane Katrina, media mania would have you believe that all is lost. When, in fact, in every case, we not only survived these catastrophic events we came out stronger and healthier as a nation despite them.
Consider this: In a December 1984 Time Magazine cover story, “Banking Takes a Beating” detailed the fallout from deregulation of banks. “Bankers now face their most strenuous survival since the Great Depression,” wrote the authors. “Because of poor management, overzealous lending and some bad luck, commercial bank profits have been battered.” As Mark Twain once observed, “History does not repeat itself, but it does rhyme.”
Then came “The Crash” on October 19, 1987. Time Magazine’s cover story was titled “Panic Grips the Globe.” On Black Monday, the Dow Jones Industrial Average plunged 22.6% in one day. Within days of the crash, however, the Dow had recovered almost half its losses. The year ended on a positive note, with an annual 2.3 percent return.
As for fundraising specifically, what happens in times of crisis? Once again, let’s look at history. Past trends help us understand what may occur the remainder in the future.
One important source for understanding the relationships among giving, the economy and crisis is The Chronicle of Philanthropy. In a recent article, this respected publication highlights 13 major events that have had a serious impact on the economy since 1940. All of these, it would appear, were more catastrophic than our recent recession. In each case, the U.S. stock market generally recovered within a year to eighteen months.
This is a time to remind ourselves that we live in a land of enormous wealth and extraordinary opportunity. We can believe the newspaper headlines and television hype claiming that greed has crippled our economy. Or, you can look at the facts
- our markets have not ceased to function;
- our economy has not collapsed;
- commerce still continues for all essential goods and services;
- more than 90% of Americans are employed;
- most companies are still operating aggressively; and
- most non-profit organizations are continuing their fundraising plans
- many non-profit organizations have exceeded their goals, even these past two years
Non-profit organizations need to return to their “mission” with resolve. They need to craft creative strategies for strengthening revenue and refocusing effort.
Philanthropist John Templeton, when asked about the economy, said “No one should feel so conceited as to know the answer.” So, while I will make no effort to predict the economic conditions for 2010 and beyond, I do believe now is the time to stick to our plans, strengthen our resolve, be motivated by our purpose, our expectations for success and the importance of our mission.
Volunteers are the only human beings on the face of the earth
who reflect this nation’s compassion, unselfish caring, patience
and just plain love for one another – Erma Bombeck
Thanks for using Giving USA in your work. One small correction. It is written, researched and distributed by the Center on Philanthropy at Indiana University. If you can change, we’d appreciate it!
managing editor, Giving USA 2010 and associate director of research at the Center on Philanthropy at Indiana Universiy