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2007 Donations Good So Far, But What About the Holidays?

(Dec. 3, 2007) A new survey shows that giving in the first nine months of 2007 was strong, with very similar results to figures in 2006. However, will the U.S. housing crisis and overall economic conditions across North America affect giving in the last quarter of the year?

According to GuideStar’s Sixth Annual Nonprofit Survey, 52 percent of charities surveyed reported increased contributions during the first nine months of 2007 compared to the same period in 2006. Twenty-five percent experienced no change and 19 percent reported a decrease in contributions.

These figures should point to a strong giving year in 2007. The previous GuideStar survey in 2006 showed remarkably similar numbers, with 50 percent of charities reporting increased contributions in the first nine months of 2006 compared to the same three quarters in 2005. Twenty-seven percent reported no change and 19 percent received fewer donations. Later research about 2006 giving, such as AFP’s State of Fundraising Survey, revealed that 69 percent of charities said their overall 2006 fundraising increased over 2005. In addition, the Giving USA Foundation reported that overall giving increased by 4.2 percent in 2006.

Giving Season Uncertain

While the 2006 numbers are heartening and 2007 indicators are strong so far, many charities are increasingly concerned about the continuing housing crisis and fluctuating stock market and their impact on charitable giving.

“I’ve been speaking with members across North America, and nearly all of them have mentioned that they are keeping a close eye on the economy,” said Paulette Maehara, CFRE, CAE, president and CEO of AFP. “At the same time, I don’t have the sense that anyone is in panic mode just yet. We’ve all been living with a fairly uncertain economy this year, and many donors and charities have adjusted to that. The lessons of the last several years, going back to 2001, have served us well.”

Maehara also noted that as often as the stock market has gone down, it also has tended to jump right back. “The situation will keep fundraisers on their toes and may keep some donors waiting until the last moments of 2007 to make a gift.”

Donors have a variety giving options to take advantage of this year. For example, the Individual Retirement Account (IRA) Rollover provision is set to expire at the end of the year, and many donors will want to take advantage of that giving incentive. In Canada, many donors are still becoming familiar with the advantages brought about by the elimination of the capital gains tax on gifts of appreciated securities.

“There are many tools that fundraisers can use this year, and I think if we focus on the basics—good stewardship and creating donor loyalty, board and volunteer leadership and a strong internal operation—our organizations will do well, regardless of the environment,” Maehara added.

Last Quarter Critical

The GuideStar survey confirmed the importance of the last three months of the year for many charities. Nearly half (45 percent) of survey participants receive the majority of donations during the last quarter of the year. Another 45 percent said their organizations do not follow this pattern, while 10 percent were unsure.

Of those organizations that receive a majority of donations in the last quarter of the year, 60 percent said they expect contributions in the three-month period in 2007 to exceed amounts received in the same quarter in 2006. More than one-fourth (28 percent) expect contribution levels to remain about the same.

The survey also looked at giving in the first nine months of 2007 based on geographic region, subsector and organizational size. However, no clear trends appeared in any of these categories. Respondents who reported fewer contributions said “gifts from individuals were smaller” (52 percent) and “fewer individuals gave” (50 percent) to primarily explain the decreases.

In addition, more than half (52 percent) of participants from grant-making organizations reported that they had increased the amounts they had granted during the first nine months of 2007 compared to the same period in 2006. A third (33 percent) said their grant amounts had remained about the same, while 12 percent reported a decrease and 3 percent did not know.

How has your organization’s fundraising fared so far in the last quarter of 2007? Email your thoughts to paffairs@afpnet.org, and AFP will publish them in the next issue of eWire.

About the Survey

A copy of the executive summary and survey questions is available on the GuideStar website.

The Sixth Annual Guidestar Nonprofit Survey included 4,173 participants. Ninety-two percent were associated with public charities, 7 percent with private foundations/grant makers and 1 percent were not associated with a nonprofit. At least 3,587 nonprofit organizations were represented in the survey results, and all areas of the United States, all sizes of nonprofits and all subsectors were included in the survey.

GuideStar is a 501(c)(3) public charity based in Williamsburg, Va., that provides to the public information about charities compiled from IRS Forms 990 and the IRS Business Master File, including comprehensive facts on employee compensation and grant activity.

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