Thursday, July 23, 2009

Wither giving in 2009?

Everyone wants to know - will 2009 be better or worse than 2008 when it comes to philanthropy?

I had the opportunity to hear Brad Smith (The Foundation Center) and Bob Ottenhoff (Guidestar) talk about this yesterday. You can catch some of it here from twitter. The Guidestar report referenced is here. The Foundation Center advisory is here. Here is a story on it from the Chronicle of Philanthropy.

I'm one of 3 speakers on a national conference call this afternoon about this. Here's what I have to say about USA giving trends.

What we DO KNOW:
  1. Giving declined in 2008 over 2007. See Giving USA for data. Totals for 2008 were down 2% from the previous year, the first decline in current dollar giving since 1987, and only the second since 1956.
  2. 2008 giving totaled $307.65 billion. Individuals gave $229.8 billion. Foundations gave $45.6 billion. (bequests were $22.66 billion and corporate giving $14.5 billion)
  3. Stimulus dollars will get to some sectors/organizations in 2009 - this may be starting to show in first Q survey data of NPOs, 1/3 of which reported drops in their budgets and 1/3 reported increases. (Guidestar report)
  4. Governance changes and political scrutiny of nonprofits and foundations likely to increase in 2009 - result of scandal, Madoff, investment pressures, public budget pressures and the new 990 form
What is being PROJECTED:
  1. The Foundation Center and Guidestar are both projecting 2009 foundation and individual giving to drop between 9-13% each over 2008 and again 2010 over 2009.
  2. If foundation giving drops ~10% in 2009 that would mean ~$4.5 billion less for total of $41 billion in 2009. Another 10% drop in 2010 would mean loss of $4.1 billion for total of $37 billion.
  3. If individual giving drops at 10% each year, that would mean -$23 billion in 2009 for total of $206 billion; for 2010 the loss would be ~$20 billion for total of $186 billion.
  4. Guidestar report for March - May 2009 reported 52% of nonprofits surveyed showing a drop in giving over same time period in 2008.
What we DON'T KNOW:
  1. We don't know details of foundation giving in Q1 and Q2 2009 compared to 2008 (though I'm trying to find out)
  2. We don't know if gifts from Donor Advised Funds were exceptionally generous in late 2008 in response to crisis. If so, the 2008 drop in giving may have been less steep than it would otherwise have been. That said, anecdotal evidence shows that those DAFs are now "empty" and not being replenished at usual rate, so drop in 2009 could be steeper.
  3. We don't know how much smaller the nonprofit sector might be at end of 2009 or 2010. IRS is reporting that applications for 501 c 3 status continue apace, but anecdotal evidence points to nonprofits going out of business at faster than usual rates. Mergers don't seem to play big role, though they are happening. Some (Paul Light of NYU) have predicted a 10% overall decline in NPO numbers by 2009.
  4. We don't know what the impact of state budget cuts will be.

For data on giving trends within specific sectors (environment, education, health, etc) go to the Foundation Center, Giving USA, or Guidestar (which has some health and human service specific information).

That's the national story - what are you experiencing? One commenter on twitter yesterday noted that, where foundation grantmaking is concerned, "Flat may be the new up."

What is your foundation doing? What will your own individual giving look like in 2009? What data do you wish you had? Please chime in with your own organization's experiences, data that I'm missing, or other information that can help us all answer the question, "Whither giving in 2009?"


Unknown said...

I can tell you anecdotally from talking to clients that almost everyone is reducing their grantmaking and laying off staff. This is a good time to think about the ways foundations can participate through non-grantmaking strategies.

Anonymous said...

Katja's NP Marketing Blog brought me to you...

I've been involved in and aware of discussions on the Program Related Investment (PRI) topic as a means for foundations to efficiently work in support of their mission by providing funding to like-minded, mission-driven organizations without giving the funds as a grant. It seems like a time for foundations to be exploring this option more. I'm curious how much PRI you have seen and what your thoughts are on the topic.

Nancy Gallant
Social Entrepreneur
Time Well Sent/Massachusetts

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Bill Huddleston said...

Not all the news is bad --

CFC Fundraising Grew in 2008

The Combined Federal Campaign just released the results from the 2008 non-profit fundraising campaign. The total amount pledged by Federal public servants to thousands of local, national and international non-profits was $275,898,756 which was a 1% increase over the 2007 total of $273,271,290.

The CFC is one of the few fundraising resources for non-profits that did not report a decline in during last fall’s economic pressures.

Want to learn more about the world’s largest workplace giving campaign?
$1 billion of unrestricted funds over the past five years. Did you know that in terms of actual giving, if the CFC were a foundation, it would be the 10th largest foundation in the US?

Bill Huddleston

MPA in NonProfit Management -

George Mason University

Author of soon to be released:

A Hidden Treasure for Your Non-Profit

How to tap into the CFC, America's Largest Workplace Giving Campaign

$1 billion of unrestricted gifts to thousands of nonprofits.