Charitable Donations are still Lagging Pre-recession Levels
August 05, 2013
A recent study on charitable giving from foundations, individuals and corporations indicates that overall amounts are still below levels raised in 2007, the start of the recession and market downturn. While the securities markets have recovered, the ‘psychology of giving’ has not. An article from the Chronicle of Philanthropy confirms that donors at all income levels remain cautious about their personal finances. If you are working, the automatic assumption of annual salary increases and bonuses no longer holds true, and the prospect of layoffs remains a reality. Donations (in the US – we expect Canada to be similar ) are still 8% lower than levels experienced in 2007. This means that all organizations continue to face challenges in delivering programming or building capacity.
Two other themes exist that create challenges for not for profit organizations :
Government Funding – the ‘new normal’ as governments work to attack deficits, is funding programs are either static or may see a decline. If a government funding program is not cut, program administrators face a new challenge. The same amount of funding dollars must be allocated across existing and new/emerging organizations. Not for profits should no longer count on fixed year over year operating grants.
Broader Scope - Donations from individuals or corporations are being made locally, and nationally and internationally. Philanthropic funding is being spread more broadly, and local causes may receive less funding. As an example, one of the wealthiest communities in the United States (San Jose – silicon valley), sees only 33% of funding/grants going to local organizations.
As organizations revisit their business models, the need for core operating support, or new resources to help build capacity is critical. Interviews with not for profit organizations conducted by the Stanford Social Innovation Review identified opportunities for individuals to:
Maintain support levels for operationsand in particular provide support on a multi-year basis. This creates certainty for an organization and is efficient. The time and effort required to complete often complex grant applications every year, diverts employee time away from arts mission and programming. Unrestricted support for the ‘unsexy’ parts of a not for profit organizations budget is greatly needed in our current economic environment.
A task for the non-profit organization is to increase communications with government leaders, foundation grantors and other organizations – look for opportunities for partnerships, for sharing data and resources. Individuals can use their ‘voice’ and share their passion and commitment for a not for profit/arts organization with their contacts in government and foundations.
Not for profit organizations have always been nimble and creative in delivering programming when resources are tight. Given it may be that funds raised for charitable causes won’t reach pre-economic crisis levels till 2018, individuals can support organizations through a focus on core operations and creative ways for partnering within a community.
Background information and articles on this topic can be found at: