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Fundraisers Report Tough Times—Expect Some Improvement by Year End

August 4, 2009

Fundraisers are finding the current giving environment extremely challenging, but expect some improvement for the second half of 2009.

A survey by the Center on Philanthropy at Indiana University reveals that fundraisers’ assessment of the current giving environment fell to its lowest level since 1998, when they first began to study nonprofit’s attitudes toward the present and future giving climates.

In the latest survey, the Present Situation Index (PSI) is at 58.0, an 8.7 percent decrease from six months ago and a 28.9 percent decrease from one year ago. The PSI has averaged 82.1 over the history of the study.

Overall, just over 86 percent of fundraisers surveyed said the economy is having a negative or very negative impact on fundraising right now, a slight improvement from the 93 percent who reported such an effect in December 2008. Almost 60 percent expect a continued negative effect from the economy in the next six months, while 23 percent said the economy will have a positive impact during that time.

Many Are Optimistic

Fundraisers’ expectations for the coming six months are more optimistic than six months ago, but remain below the historical average for the study. The Expectations Index (EI) is at 72.8, a 10.2 percent increase from six months ago but a 13.2 percent decrease from a year ago. The overall PGI, which is an average of the current and future indexes, is at 65.4, up 0.9 percent from December 2008 but down 21 percent from this time last year.

Expectations for improvement in the fundraising climate in the next six months are highest among religious, education and health organizations, and consultants. Public society benefit, environment/animal and international organizations, arts groups and human services organizations have the lowest expectations for the immediate future.

Consultants who provide outside fundraising counsel to nonprofits are substantially less optimistic about the current fundraising climate (PSI of 49.0) than other survey respondents.  Fundraisers for arts, culture, and humanities organizations and human services nonprofits also are also less confident about the current conditions for giving than other types of nonprofits. Development officers from educational and religious organizations were the most optimistic about the present climate.

Approximately 57 percent of fundraisers said their organizations raised more money (32.3 percent) or about the same amount (24.7 percent) in 2008 than they did in 2007, while just over 39 percent reported raising fewer dollars in 2008. Nearly two-thirds of fundraisers (62.2 percent), reported no change in the timing of scheduled pledge payments during the past six months, and 67.2 percent saw no change in the payment of pledges in the full amount during that time.

Similar results were found in AFP’s eighth annual State of Fundraising Survey, which also asked charities to compare their fundraising totals in 2008 to their figures in 2007. Overall, just 46 percent of organizations raised more funds in 2008, a new low in the eight-year history of the survey. In addition, the percentage of organizations raising less money in 2008 compared to 2007 (40 percent) was an all-time high. Another 14 percent raised about the same amount of money in both years.

What’s Working

The Philanthropic Giving Index (PGI), similar to a consumer confidence index for charitable giving, also asks which fundraising techniques are most successful; survey participants currently perceive major gifts, direct mail and planned giving to have the highest levels of success. With the exception of Internet and email fundraising and direct mail, fundraisers are reporting that their success with most techniques (major gifts, planned giving, special events, foundations, telephone, and corporate gifts) is at or near its lowest levels since the study began.

PGI survey participants are chosen to represent a cross-section of nonprofits nationwide in terms of geographic region, annual revenue size and type of organization. The survey was mailed to 394 nonprofit development executives and fundraising consultants. Of those, 188 fundraisers and consultants responded, for an overall response rate of 49.2 percent. Survey administration and coding of data was conducted by the Center for Survey Research at Indiana University.

The full PGI report, including results by organization size, donor base and subsector (e.g., arts, environment, etc.), may be purchased here.

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