Monday, August 10, 2009

Guidestar Double Header: Impact of the Economy on Nonprofits – New Report and an Important Tip About Updating

Guidestar’s August newsletter provides an updated insight into how nonprofits are dealing with the economy. The results of a survey of over 2200 nonprofits and 181 foundations compare responses to questions for the 10/08 – 2/09 time frame and for the 3/09 – 5/09 period. I am not going to get into the comparison as it leaves you with the same analysis as that of the general economy – Is the fact that it isn’t getting worse great news? Who cares? It’s still bad and the current results show how are nonprofits coping. Here are some of the highlights of the survey for the 3/09 -5/09 period:

52% of nonprofits continue to say that donations are decreasing with almost 70% attributing this to fewer contributions and smaller contributions from existing donors.

About 38% said that corporate and private foundation grants were smaller. And a surprising 23% said that these grants were completely discontinued. Less than 15% cited smaller or discontinued government grants and contracts.

Grantmakers responding provided some insight into the steps they are taking: 20% are cutting back on the types of programs they fund and 9% actually said they were making smaller payouts to programs they were already committed to. In contrast 58% of nonprofits report an increase in demand.

So what are nonprofits doing to cope? 54% report a reduction of program services and staff is taking a big hit with layoffs, salary freeze or reductions, hiring freeze and reduction in benefits all cited.

Download the Guidestar Report

I have some simple advice that I’ve given before on this. Make sure you are keeping in touch with donors and saying thank you. Simply taking the time to say thank you – especially with phone calls without solicitation – can make a difference with being on an individual’s shorter list to support this year.

It is important that you stay in contact with foundations that support you. Make sure they know how you are doing and what steps you are taking to deal with the economy. Keep in tune with foundations that support you so you know if the type of programs you run may be in jeopardy and what kind of action they are expecting from nonprofits. You want to stay on their front burner as much as possible as the flame may go out on the rear burners.

The August Guidestar Newsletter also has a great article: “Applying for Funding from Family Foundations: Results of a New Survey.” I plan to write about that soon too.

Important Guidestar Tip
If you are a regular reader of this blog you know that I am a strong supporter of nonprofits updating their Guidestar profile. I am a member of NTEN – the premier organization for nonprofit technology and recently there have been some posts on one of their forums with this important tidbit. When you update your profile you must go to the donation tab and update that to include donations or it will default to donations not accepted. This will affect donations via Facebook and other sources using Guidestar. Ouch! I didn’t know that. If you have updated your Guidestar profile, go check this out today.

1 comment:

Unknown said...

Well said, Marion. I agree, it is tiresome and painful to read about how everything is tanking.

But while things are falling apart, I hope organizations are looking at this creatively. It's a perfect time to re-examine their business models to try to create new sources of sustainable income.

Thanks for the Guidestar tip - I'll forward on to my clients. Best!
Gail Perry