Down but Not Defeated: Results of GuideStar's Eighth Annual Nonprofit Economic Survey

December 2009

Overview

A survey of public charity and private foundation employees was conducted online from October 1, 2009, until October 15, 2009, the eighth annual nonprofit economic survey conducted by GuideStar, and the third of three such surveys conducted by GuideStar in 2009. The purposes of the survey were to compare how charitable organizations fared during the first nine months of 2009 to previous years and to try to gauge the effect of the downturn in the economy on the American nonprofit sector. There were 2,565 usable responses, 2,381 (93 percent) from public charities and 184 (7 percent) from private foundations.

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.

Selected Details

Contributions

Change in Contributions, 2002-2009
Period Covered by Survey	Contributions Decreased	Contributions Stayed about the Same	Contributions Increased	Don't Know
Jan.-Sept. 2009	51%	25%	23%	1%
Mar.-May 2009	52%	29%	18%	1%
Oct. 2008-Feb. 2009	52%	27%	20%	1%
Jan.-Sept. 2008	35%	25%	38%	2%
Jan.-Sept. 2007	19%	25%	52%	4%
Jan.-Sept. 2006	19%	27%	50%	4%
Jan.-Sept. 2005	22%	26%	49%	3%
Jan.-Sept. 2004	23%	24%	50%	3%
Jan.-Sept. 2003	35%	22%	39%	4%
Jan.-Nov. 2002	48%	22%	28%	3%

Reasons Contributions Decreased, 2008-2009
Reason	Jan.-Sept. 08	Oct. 08-Feb. 09	Mar.-May 09	Jan-Sept. 09
Fewer individuals gave	63%	71%	69%	69%
Gifts from individuals were smaller	60%	71%	68%	69%
Corporate gifts were smaller	34%	39%	38%	42%
Private foundation grants were smaller	29%	34%	37%	41%
Private foundation grants were discontinued	13%	23%	22%	26%
Corporate gifts were discontinued	13%	25%	23%	25%
Government grants were smaller	13%	13%	14%	17%
Government grants were discontinued	7%	8%	7%	8%
Government contracts were smaller	6%	6%	6%	8%
Government contracts were discontinued	2%	3%	3%	4%

The Giving Season

Some 46 percent of participants reported that their organizations receive the majority of contributions in October, November, and December, i.e., the giving season. We asked these respondents how they thought their nonprofits would fare during the last quarter of 2009, compared to the same period in 2008.

Predictions for the Giving Season, 2007-2009
Year	Expect Contributions to Decrease	Expect Contributions to Stay about the Same	Expect Contributions to Increase	No Idea
2009	45%	31%	19%	5%
2008	49%	28%	20%	3%
2007	9%	28%	60%	4%

Demand for Services

Change in Demand for Services, 2003-2009
Period Covered by Survey	Demand Decreased	Demand Stayed about the Same	Demand Increased	Don’t Know
Jan.-Sept. 2009	7%	30%	62%	1%
Jan.-Sept. 2008	6%	27%	64%	3%
Jan.-Sept. 2007	5%	25%	67%	3%
Jan.-Sept. 2006	4%	23%	72%	2%
Jan.-Sept. 2005	5%	24%	70%	2%
Jan.-Sept. 2004	5%	23%	71%	2%
Jan.-Sept. 2003	6%	22%	70%	2%

Budgets

Budgets, 2009-2010
Budget Period	Decrease(d)	Stay(ed) about the Same	Increase(d)	Don't Know
2010 (predicted)	31%	29%	36%	4%
Mar.-May 2009	36%	27%	36%	1%
Oct. 2008-Feb. 2009	35%	26%	38%	2%

Grantmaking

Change in Grantmaking, 2002-2009
Period Covered by Survey	Amounts Awarded Decreased	Amounts Awarded Stayed about the Same	Amounts Awarded Increased	Don't Know
Jan.-Sept. 2009	36%	36%	27%	1%
Mar.-May 2009	36%	39%	23%	1%
Oct. 2008-Feb. 2009	31%	44%	22%	2%
Jan.-Sept. 2008	16%	39%	43%	2%
Jan.-Sept. 2007	12%	33%	52%	3%
Jan.-Sept. 2006	14%	32%	52%	3%
Jan.-Sept. 2005	13%	38%	47%	2%
Jan.-Sept. 2004	19%	33%	45%	2%
Jan.-Sept. 2003	35%	36%	24%	4%
Jan.-Oct. 2002	40%	28%	18%	15%

Download the 2009 annual nonprofit economic survey report
Read about GuideStar's previous nonprofit economic surveys

Chuck McLean is GuideStar's vice president for research. He and research assistant Carol Brouwer conducted, analyzed, and prepared the report on the October 2009 nonprofit economic survey. Suzanne Coffman is GuideStar's director of communications and editor of the Newsletter.