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Fundraisers See Chilly Giving Climate Now and in Future

(Jan. 5, 2008) The fundraising climate is the toughest it’s been since 1998, according to the Indiana University Center on Philanthropy’s most recent Philanthropic Giving Index.

Two thirds of fundraisers reported the economy was having a negative impact on fundraising, while more than a quarter reported it has had a very negative impact.

The Giving Index takes semiannual measure of professional fundraisers’ attitudes about the present giving environment and their outlook for the next six months. All three indicators in the study (fundraisers’ current, future and overall climate assessment) have dropped dramatically.

It is probably no surprise that the present situation for many is markedly unfavorable. Unfortunately, few see things getting any better in the first six months of 2009. The average level of confidence in the giving climate, called the Expectations Index, is 88.9 over the course of all study years, which is fairly optimistic. This index has now fallen to 66.1. Fundraisers report a strong drop off in confidence since as recently as summer 2008. They now rate the present situation about 22 percent lower.

A Closer Look

In terms of specific fundraising methods, significantly fewer fundraisers are reporting success with major gifts, a trend seen throughout 2008. Just over 71 percent of fundraisers reported success in this area, the lowest figure since 2003. However, planned giving has increased over the past six months, from 67.6 percent of fundraisers reporting success to 72.9 now reporting success.

In addition, fewer development officers reported success with direct mail and foundation grants than they did six months ago. However, neither have reached their all time low, the study finds.

Corporate giving, as one might expect, continues its downward trend, while surprisingly, more fundraisers are reporting success with special events and telephone solicitations than just six months ago.

When broken down by sector, health organizations and consultants had the highest overall assessment numbers. Public benefit, environment/animals, international and human service organizations reported the worst fundraising climate in the poll.

Reality Check

Fundraisers were asked in summer 2008 to predict the level of success they would have with various fundraising techniques. In all areas save for telephone and special event, actual results were lower than what fundraisers anticipated. Email and major gifts, in particular, performed far below what fundraisers predicted.

Fundraisers for education have seen mixed results over the past year. More than 40 percent of development officers working in educational organizations reported a decrease in the scheduled payment of pledges this past year, which, the study notes, is significantly lower than other types of organizations. But, education organizations were significantly more likely to report an increase in success this past year using the IRA charitable rollover provision.

“This is a hard year for fundraisers at many organizations across the nonprofit spectrum. These results reflect that the U.S. economy is in recession,” said Patrick Rooney, interim executive director of the Center on Philanthropy, in a press release. “Our research for Giving USA Foundation shows that total giving generally declines by about 2.7 percent annually during longer recessions. While we don’t yet know what will happen to total giving in 2008, the PGI is a strong indicator of the difficult challenges fundraisers are clearly concerned with as 2008 comes to a close.”

The full Philanthropic Giving Index (PGI) report, including results by organization size, location of donor support and subsector (e.g., arts, environment, etc.), is available to premium services members of the IU Center on Philanthropy website at this link. The report may be purchased here.

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