AFP eWire Printable Version: July 21, 2009
Nonprofits Proving Resilient
Nonprofit organizations are proving themselves to be quite resilient during the current recession compared to previous times of significant economic stress.
The Johns Hopkins University Nonprofit Listening Post Project found that nonprofit organizations are feeling strained by the recession, but that various coping strategies have allowed many organizations to steer clear of severe problems.
Eighty-three percent of responding organizations reported some level of fiscal stress during the target period of September 2008 to March 2009. Close to 40 percent of the organizations considered the stress to be “severe” or “very severe.”
Yet, the proportion of organizations reporting “severe” or “very severe” fiscal stress during the target period of this survey, while substantial, was still considerably below the level reached in the 2002-2003 recession that followed the events of Sept. 11, 2001 (37 percent vs. 51 percent of the organizations). Most subsectors reported a majority of organizations experiencing just minimal or moderate fiscal stress.
Less than 5 percent of all respondents reported that they were in imminent danger of folding due to financial reasons.
Faced with new challenges in the current recession, nonprofits have also responded with a host of additional coping strategies, focusing particularly on three strategies: Intensified fundraising, belt tightening and entrepreneurial expansion.
Particular targets of intensified fundraising efforts were individual donations (61 percent of organizations), state and/or local funding (57 percent), federal funding (56 percent) and foundation or corporate support (55 percent).
A second strategy utilized by numerous organizations to cope with the economic downturn was to tighten their organizational belts further.
Especially common here were cutting administrative costs (56 percent of organizations) and creating or expanding collaborative relationships with other nonprofits (47 percent). The latter is especially encouraging given the sizable numbers of nonprofits in existence and the considerable opportunities that consequently exist to share services, facilities and expertise.
In terms of entrepreneurial activities, nearly half of all respondents improved or expanded their marketing efforts (48 percent) and implemented or expanded advocacy efforts for organizational funding (45 percent).
Between 20 and 25 percent of organizations expanded existing fee-for-service activity, introduced or raised fees and reached out to new clients or patrons.
Arts organizations were particularly inclined to expand their marketing efforts in the face of the economic downturn, with 60 percent or more of theaters, orchestras and museums turning to this strategy.
Entrepreneurial Strategies Prove Fruitful
Interestingly, the survey responses indicate that while these entrepreneurial strategies may not have been the most common among survey respondents, they tended to be more effective than many of the other strategies.
While substantial majorities of the agencies pursued many of the fundraising and belt-tightening strategies, their likelihood of achieving “successful” or “very successful” financial performance was about on a par or slightly below that of all organizations.
By contrast, far fewer organizations pursued the entrepreneurial strategies such as increasing marketing, developing new giving vehicles, or starting a for-profit subsidiary, but those that did were more likely than all organizations to report “successful.”
To read the full report of the Johns Hopkins Listening Post Project titled Impact of the 2007-09 Economic Recession on Nonprofit Organizations, go to www.ccss.jhu.edu.
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Study of U.S. and U.K. Wealthy Shows Generosity Still High
A report published this month by Barclays Wealth indicates that high net worth donors in the United States and the United Kingdom continue to give generously despite the bad economy.
Wealthy investors in both the U.S. and the U.K. have been hit by declining company valuations, stock markets and house prices, bringing about concerns that charitable donations would suffer, the firm notes. However, research shows that this may not be the case.
The Barclays report, titled Tomorrow’s Philanthropist, indicates that the wealthy consider philanthropy a key expense and would sooner give up comforts before cutting back on charitable giving.
While high net worth individuals have cut back their donations by 2.2 percent, research shows young donors have increased their donations by 3 percent to 4 percent to help charities survive the downturn.
More than three quarters (77 percent) of high net worth individuals surveyed in the U.S. and the U.K. said that they would not decrease their level of giving in the current downturn.
“According to the report’s findings, there is a remarkable resilience among wealthy givers,” noted Matt Brady, head of wealth advisory at Barclays Wealth. “The fact that we’re seeing levels of giving maintained in such a challenging economic environment is a real statement of intent and underscores the importance of philanthropy.”
Self-made wealthy individuals are becoming increasingly active in their philanthropy, seeking to apply their business expertise, networking and fundraising skills to solve the social problems of the day and drive change. Forty-five percent of high level donors (i.e., donors that donate in excess of $10,000) prefer to give their money away during their lifetime, so they can witness its impact on society. The increased involvement of wealthy individuals will have direct impact on the way charities operate, including:
- Increased demand on charities to provide greater evidence and transparency in how they spend their money (78 percent of high net worth donors don’t consider charities to be efficient organizations).
- In an effort to achieve greater impact, charities and individuals will leverage their use of the Internet as a platform for giving.
- Wealthy individuals are increasingly using professional advisors to help determine how they achieve the greatest possible impact with their donations.
“The report underscores just how important major giving has become now in the current economic situation,” said Paulette V. Maehara, CFRE, CAE, president and CEO of AFP. “With donors increasingly less likely to give to new causes, nonprofits need to be focusing on current and previous donors, and major donors—who typically give several times before making a major gift—have the capacity and the will to make substantial gifts that can make a significant difference in this recession. Nonprofits simply must be implementing major gifts programs now, or else they stand to lose out on major opportunities.”
Tomorrow’s Philanthropist, a report by Ledbury Research for Barclays Wealth, polled 500 high net worth individuals in the U.S. and the U.K. in May. To download the report go to www.barclayswealth.com.
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Register Today for the Nonprofit Management Institute at Stanford University
How do you shape an effective organization during tough times? AFP and Stanford Social Innovation Review (SSIR) put together this year's Nonprofit Management Institute program to help you shape and grow your organization while dealing with current resource constraints.
Speakers at the institute are world-renowned faculty from the Stanford Graduate School of Business (GSB) and leading practitioners in the field.
AFP members receive a $200 discount. There are also group discounts and a reduced rate at the Sheraton Palo Alto. Register before the early-bird deadline—August 27th—and receive an additional $200 off!
Switch: How to Change Things When Change is Hard. Chip Heath, coauthor of the best-selling book Made to Stick: Why Some Ideas Survive and Others Die, will present a framework for changing how people act, even in the most difficult circumstances. The topic is a perfect fit with the conference theme: Shaping Effective Organizations During Tough Times.
More Great Speakers
- New Paths to Social Innovation, Kriss Deiglmeier, Center for Social Innovation, Stanford GSB
- Ten Nonprofit Funding Models, William Foster, Bridgespan Group
- Leading the New Volunteer Workforce, Robert T. Grimm Jr. and Susannah Washburn, Corporation for National and Community Service
- Market Rebels: How Activists Make or Break Radical Innovation, Hayagreeva Rao, Stanford GSB
- Partnering in Tough Times: Strategic Restructuring for Nonprofit Organizations, David La Piana, La Piana Consulting
- Beyond 2009: Emerging Trends in Philanthropy in an Era of Economic Dislocation, Peter deCourcy Hero, Caltech
- The New, Networked Mindset, Heather McLeod Grant, Monitor Institute
Hear From Past Participants!
Here's what last year's attendees said about the Nonprofit Management Institute, which is sponsored by the Association of Fundraising Professionals and SSIR:
"In my 25 years of 'professional life,' this was the best, most-thought producing, educational training I've attended. Great ROI!"
"Brilliant, thought provoking, and very useful for strategic leadership!"
"The quality of programs/speakers has been outstanding. I'm going home with many ideas and to-do's. Well done!"
The Institute is held at the Frances C. Arrillaga Alumni Center on the Stanford campus, within walking distance of hotels and airport transportation. For further information and to register, go to www.ssireview.org/npinstitute.
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AFP Calls for Fundraising Information Papers
If you’re interested in writing and want to help your colleagues and give back to the profession, consider developing a short information paper for AFP’s Fundraising Resource Center.
AFP’s new Information Paper Project is designed to leverage the knowledge and experience of countless members who are willing to share with colleagues. Writing an information paper is a great way to provide your unique skills and perspective in a short document (between 750 and 2000 words) that won’t take too much time away from your professional and personal responsibilities.
Papers should typically be short, practical, “how-to” pieces that can assist fundraisers in performing their daily jobs. However, any type of document, including toolkits, polices and samples, is welcomed as long as it is of high quality and falls within the guidelines for length, format and topic.
In exchange for submitting a paper to AFP members at no charge, AFP will provide brief visibility for the author or organization at the beginning of the paper and at the end, including a website link and short boilerplate information.
“There is a tremendous amount of knowledge and experience residing within our members, and in these challenging times, it behooves both the association and the profession to access that for the benefit of all charities and our communities,” said Paulette V. Maehara, CFRE, CAE, president and CEO of AFP. “It’s also a great way to get involved in writing and giving back to your profession, and it doesn’t require a lot of time.”
Maehara stressed that AFP is looking to hear unique member voices and perspectives—what’s working and what’s not, in a member’s own words. “There’s any number of great training manuals and books about fundraising in the AFP Bookstore,” she continued. “We’re looking for papers that chronicle how organizations have overcome challenges and obstacles and reached higher levels of success. They can address very specific situations or tackle broader responsibilities.”
How to Submit/Guidelines
A submission form, which can be found attached in the electronic version of this eWire story, must accompany each paper. The form and the draft information paper or article should be emailed to the contact below.
Papers and articles should be between 750 and 2,000 words. In addition, the following basic guidelines should apply:
- All papers and articles must be in MS Word.
- Please format all articles according to the following guidelines:
- Include your name, title, company name, address, email and telephone number at the top of the cover page.
- Please do not use page numbers, headers or any “design” elements, etc.
- Articles and papers should be single-spaced.
For a list of suggested topics (though other topics can be covered as well), and for more information about style and content of the papers, please follow the links in the electronic version of this eWire story.
Papers will be reviewed by AFP staff and will also undergo a peer review. While AFP is looking forward to receiving all quality work, there is no absolute guarantee that any paper, toolkit, sample or policy will be approved. Applicants will be notified within 4-6 weeks if their paper will be included in the AFP Resource Center.
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Nominations Being Accepted Now for AFP Board of Directors
AFP is seeking nominations of qualified candidates to serve on its 2010 Board of Directors as a district director or as an at-large director. Forms are due on or before July 31, 2009. To nominate someone for AFP’s Board of Directors, go to the AFP homepage, www.afpnet.org, and click on the item in the to-do list regarding board nominations. Or see the electronic version of this story in eWire.
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Last Call for Nominations to Foundation for Philanthropy Board
The AFP Foundation for Philanthropy is now accepting nominations for chair-elect (due July 10) and for officers and directors (due July 24). For more information and for a nomination form please visit the AFP Foundation for Philanthropy website at www.afpnet.org/afp_foundation_for_philanthropy.
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Don't Miss Two Upcoming Great Webconferences to Improve Your Fundraising!
(To register go to www.afpnet.org and click on Education and Career Development—AFP Web/Audioconferences)
A Blueprint for Fundraising Success in Any Economy – Presented by Kent Dove
July 23 | 1–2:30 pm ET
Veteran fundraiser Kent Dove will describe and detail a comprehensive, integrated development model that has allowed numerous nonprofits to create programs that have grown exponentially and been able to sustain that growth over time. Learn how to apply techniques to build solid relationships with donors that provide annual, special major, planned and capital gifts over time and permit nonprofits to maximize their private giving potential. Register now for A Blueprint for Fundraising Success in Any Economy: Creating a Sustainable, Comprehensive Development Model presented Thursday, July 23 at 1 p.m. Eastern.
Creating a Successful Fundraising Culture: Twelve Tools for Motivating Your Board
August 12 | 1–2:30 pm ET
Why are so many volunteers and staff members reluctant to participate in approaching prospects and donors? How can board chairs, development committee members, nonprofit CEOs and professional fundraising staff lead their board teams to own -- and even enjoy -- the essential and ultimately rewarding work of major gifts fundraising? In this practical train-the-trainer session, Carole V. Rylander, CFRE, will address the needs of nonprofit leaders who want to increase volunteer and staff participation in approaching and engaging prospects and donors. Register now for Creating a Successful Fundraising Culture: Twelve Tools for Motivating Your Board on Aug. 12 at 1 p.m. E.T.