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About Bob

Bob serves as President and CEO of GuideStar and serves on the boards of Vision TV, Grameen Foundation USA, and the AAFRC Trust for Philanthropy. More...

About GuideStar

GuideStar gathers and publicizes information about nonprofits. We advocate that nonprofits share information openly and completely. Any nonprofit we track can update its report for free. More...

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The Near Future of Fundraising

Posted By on November 11th, 2009, in these categories: Economy

We’re in the midst of the giving season, a time when many nonprofits raise the majority of their contributions for the entire year. Last year individual donations fell for the first time in many years. Soon we’ll know how 2009 turns out, but so far the indicators—things like the unemployment rate and the psychology of the stock market and personal confidence—suggest a tough year. Read about GuideStar’s own economic surveys >

There is an important new report out from Giving USA that looks at how long it will take for the nonprofit sector to get back to normal funding levels. The bottom line from the report is sobering but not surprising: it will take a few years for the sector’s contribution revenues (as opposed to fees and contracts) to match where they were in 2007. Regarding individuals, the report concludes, "It is likely that donations from households and individuals will not reach their 2007 levels until at least three years after the end of the current recession." Why is this important? As we know from the annual Giving USA surveys, 75 percent of charitable contributions come from individuals. In comparison, foundations contribute about 13 percent and corporations only about 5 percent.

As for foundations, the recovery could take even longer, depending on the state of the stock market. After the 1973-1974 recession, for example, it took foundations nearly 10 years to recover to pre-recession levels. But some of this slow recovery could be affected by the creation of new foundations and tax policies. The Foundation Center is out with a new report that reports foundation giving will likely decline by more than 10 percent in 2009. Based on responses of close to 600 foundations, Foundations’ Year-end Outlook for Giving and the Sector also finds that continued reductions are expected in 2010.

The Giving USA report ends with a few good tips on fundraising strategy. The key one to me: "Keep demonstrating your organization’s success and impact. Continue to communicate and to make your organization’s story known." Nancy Rabin, a New York-based fundraising consultant, suggests this as well: "Be candid, but upbeat. Donors are hungry for good news." Good luck to all, and stay positive.

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Making History with the Foundation Center

Posted By on August 3rd, 2009, in these categories: Economy | General

On July 22, I joined Brad Smith, president of the Foundation Center, on a teleconference to talk about the future of the nonprofit sector. It was the first time GuideStar and the Foundation Center have collaborated on such an event and only one of a few things our organizations have ever done together. It was great fun, and I really enjoyed working with Brad and his staff. After many years working for foundations, Brad brought interesting insight into the world of how foundations think and work. After such a great start, we are pursuing other activities to do together.

With moderator Katherina Rosqueta, founding executive director of the Center for High Impact Philanthropy at the University Pennsylvania’s School of Social Policy & Practice, ably guiding the conversation, Brad and I discussed the impact the economy is having on the sector and what we believe it means for the future. I presented the results of our latest nonprofit economy survey, which covered March through May of this year. Some 52 percent of participants said contributions to their organizations had decreased compared to the same period last year, 58 percent reported that demand for their organizations’ services had increased, and only 36 percent said that they had adjusted their 2009 budgets in response to the recession.

I was surprised by how similar these results were to the findings from our previous survey, which covered October 2008 through February 2009. In particular, I expected more organizations to have altered their budgets after several months of reduced income.

I see changes coming in the near future as the year unfolds. I suspect many nonprofits are living off reserves, which they can’t do forever, or making only minor adjustments to their current budgets, hoping things will improve soon. I also believe that different types of nonprofits are feeling the recession’s impact in varying degrees. Some subsectors and some regions of the country are being hit harder than others. Still, I believe that overall, the sector’s going to have to come up with new ways to cope with fewer resources and greater demand. Outsourcing, more meaningful collaborations, pooling resources, and bartering are just some of the options we need to consider. In the end, I think that our individual organizations and the sector as a whole will be stronger because of these efforts.

We’ve posted a recording of the teleconference on our site. I invite you to listen, and I welcome your comments.

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