Many U.S. Charities Facing Increased Demand, Signs of Fiscal Stress
Organizations below $3 million in expenditures experiencing greatest challenges
(Dec. 5, 2011) Sixty-five percent of charities surveyed report increased demand for their services in 2011, but just 41 percent saw increased fundraising results in the first nine months of 2011 compared to the same period a year ago, according to the Late Fall 2011 Nonprofit Fundraising Study, conducted by the Nonprofit Research Collaborative (NRC).
Smaller charities, those with less than $3 million in total expenditures and which make up 90 percent of the nation’s nonprofit organizations, saw disproportionate declines in funds raised and were more likely to report they are planning budget and services cuts in 2012.
“Every day, almost every American is touched by a nonprofit organization, whether it’s the health facility that provides medical care or the school that educates our children, and they are being asked to take on an even more critical role in this tough economy,” said Bob Ottenhoff, president and CEO of GuideStar, a member of the NRC. “We know nonprofits are already struggling, and more than half say their fundraising results have not improved to date in 2011. In this study, we found that 79 percent of smaller charities report experiencing four or more of the nine signs of fiscal stress described in the study. Many smaller organizations are stressed, which will affect the availability and quality of their services.”
The Late Fall 2011 Nonprofit Fundraising Study, available at http://www2.guidestar.org/rxg/news/publications/nonprofits-and-economy-late-fall-2011.aspx, found that in addition to increases in demand, organizations of all sizes anticipate starting 2012 with reduced revenue from numerous sources, including:
- Philanthropic support, which was flat or lower at 59 percent of responding nonprofits through the first three quarters of 2011, compared to the same period in 2010;
- Government funding, with more than half (54 percent) of those with government funding reporting a decline compared to 2010; and
- Funding from sources other than contributions reported down by 46 percent of respondents.
“With demand up and resources constrained, responding charitable organizations face difficult choices for 2012,” according to Tom Pollak, director of the National Center for Charitable Statistics. “About 49 percent in this survey plan increased spending on program activities, yet about 60 percent plan no new hires and no layoffs, indicating some intend to increase activities with the same staffing levels.”
Smaller organizations worse off by nearly every measure
While many nonprofit organizations saw fundraising results flat or down in the first nine months of 2011, and many are planning conservatively for 2012 budgets, smaller organizations (total expenditures of less than $3 million) are more challenged. In comparison to larger organizations, smaller survey respondents reported:
- Greater likelihood of decreased in contributions to date in 2011, with 31 percent of smaller organizations reporting a decline compared with 17 percent of larger charities;
- Greater likelihood of plans to reduce staff in 2012, at 29 percent of smaller organizations compared with 20 percent for larger organizations.
About the Survey
The Nonprofit Research Collaborative (NRC) conducts surveys three times a year.
The current report and prior reports from the Nonprofit Research Collaborative are available at http://www2.guidestar.org/rxg/news/publications/index.aspx.
This survey was conducted online in October 2011 about fundraising results from January through September 2011 compared with the same period in 2010, and about plans for 2012. The 875 respondents form a convenience sample. There is no margin of error, as it is not a random sample of the population studied. Reported results are statistically significant using chi-square analysis by organizational size. There were no statistically significant differences when comparing organizational responses grouped by organizational mission (subsector) or region of the United States.
About the Nonprofit Research Collaborative (NRC)
Six organizations form the NRC. Each has, at a minimum, a decade of direct experience studying nonprofits’ charitable receipts or fundraising practices. Partners are: Association of Fundraising Professionals; Blackbaud, Inc.; The Center on Philanthropy at Indiana University; Giving USA Foundation; GuideStar USA, Inc.; and the National Center for Charitable Statistics at the Urban Institute.