August 2009"We’ve got good news and bad news." The old joke fits the findings from our latest nonprofit economic survey, which looked at how charitable organizations fared financially between March and May 2009. The good news is that the proportion of nonprofits reporting decreased contributions, 52 percent, remained unchanged from our previous survey, which covered October 2008 through February 2009. So things apparently didn't worsen dramatically for charitable organizations between March and May.
The bad news is that the numbers don't reflect the stress the economy is placing on nonprofits. As one participant put it, "We are hanging on, barely." Another reported, "The only reason we are still solvent is that we had a financial crisis and could no longer pay our utility bill. After media coverage of the situation, we were inundated with generosity and kindness, and the donations covered the utility bill and the excess paid off outstanding bills, with a little cushion for the future. We were very fortunate. We realize this is a one-time deal, but it has put us back on our feet."
Still, the numbers do give us insight into the impact that the recession is having on charitable organizations. For the specifics, read on.
The Survey
Newsletter readers representing 2,279 charitable organizations—2,098 public charities (92 percent) and 181 private foundations (8 percent)—took the survey on-line between June 8 and 22, 2009. This was the second of three nonprofit economic surveys that we will conduct in 2009.
Contributions
We asked, "Did total contributions to your organization increase, decrease, or stay about the same between March 2009 and May 2009, compared to the same period a year earlier?" The results were remarkably consistent with our survey covering October 2008 through February 2009:
Change in Contributions | Period Covered by Survey | Contributions Decreased | Contributions Stayed about the Same | Contributions Increased | Don't Know |
| March-May 2009 | 52% | 29% | 18% | 1% |
| October 2008-February 2009 | 52% | 27% | 20% | 1% |
The primary reasons that contributions dropped remained consistent with the earlier survey as well:
| Reason Contributions Decreased | October 2008-February 2009 | March-May 2009 |
| Fewer individuals gave | 71% | 69% |
| Gifts from individuals were smaller | 71% | 68% |
| Corporate gifts were smaller | 39% | 38% |
| Private foundation grants were smaller | 34% | 37% |
| Corporate gifts were discontinued | 25% | 23% |
| Private foundation grants were discontinued | 23% | 22% |
| Government grants were smaller | 13% | 14% |
| Government grants were discontinued | 8% | 7% |
| Government contracts were smaller | 6% | 6% |
| Government contracts were discontinued | 3% | 3% |
Grantmaking
We asked grantmakers, "Did the total amount of money your organization awarded increase, decrease, or stay about the same between March 2009 and May 2009, compared to the same period a year earlier?" Their responses showed only slight change from our previous survey:
Change in Grantmaking | Period Covered by Survey | Amounts Awarded Decreased | Amounts Awarded Stayed about the Same | Amounts Awarded Increased | Don't Know |
| March-May 2009 | 36% | 39% | 23% | 1% |
| October 2008-February 2009 | 31% | 44% | 22% | 2% |
As we did in our previous survey, we asked grantmakers if the economy had caused them to change their grantmaking practices or guidelines between March and May. Some 43 percent said that they had, compared to 41 percent in our previous survey. Specifically, they:
| Change in Grantmaking Practices | October 2008-February 2009 | March-May 2009 |
| Cut back on program types funded | 17% | 20% |
| Reduced payouts already committed to | 8% | 9% |
| Increased grantmaking to help grantees cope | 5% | 7% |
| Stopped accepting applications | 7% | 6% |
| Accepted applications only from previously funded organizations | 5% | 6% |
| Did not make payouts committed to | 1% | 1% |
Demand
Some 58 percent of organizations reported that demand for their service had increased. Again, the responses to this question were consistent with our earlier survey:
Change in Demand | Period Covered by Survey | Demand Decreased | Demand Stayed about the Same | Demand Increased | Don't Know |
| March-May 2009 | 6% | 34% | 58% | 1% |
| October 2008-February 2009 | 6% | 34% | 59% | 1% |
How Nonprofits Are Coping
When asked, "How does your 2009 annual budget compare to your 2008 budget?" 36 percent of organizations said it had decreased, 27 percent reported it had stayed about the same, 36 percent stated it had increased, and 1 percent didn't know. Again, these results are very similar to those from our previous survey:
2009 Budget Compared to 2008 Budget | Period Covered by Survey | Budget Decreased | Budget Stayed about the Same | Budget Increased | Don't Know |
| March-May 2009 | 36% | 27% | 36% | 1% |
| October 2008-February 2009 | 35% | 26% | 58% | 2% |
Organizations that had cut their budgets took the following steps to do so:
| Measure Taken to Cut Budget | October 2008-February 2009 | March-May 2009 |
| Reduction in program activities/services | 57% | 54% |
| Salary freeze | 45% | 44% |
| Hiring freeze | 37% | 33% |
| Layoffs | 30% | 29% |
| Salary reduction | 20% | 23% |
| Reduction in employee benefits | 20% | 21% |
| Reduction in operating hours | 13% | 16% |
We'll follow up on this survey in October, when we conduct our annual nonprofit economic survey. Those results will be published in our December 2009 issue.
Download a free copy of the survey report >
Suzanne E. Coffman, August 2009
© 2009, GuideStar USA, Inc.
Suzanne E. Coffman is GuideStar's director of communications and editor of the Newsletter. Chuck McLean, GuideStar's vice president for research, and Carol Brouwer, research assistant, conducted, analyzed, and prepared the report on the June 2009 nonprofit economic survey.