Findings of GuideStar economic surveys are mixed

The results of GuideStar’s Eighth Annual Nonprofit Economic Survey are mixed: The number of nonprofits reporting decreased contributions is significantly higher than last year, which in turn was markedly higher than in 2007. On the other hand, the latest results are not dissimilar from two surveys GuideStar conducted earlier this year, in May and August.

The purposes of the survey, made in October, were to compare how charitable organizations fared during the first nine months of 2009 to previous years and to gauge the effect of the downturn in the economy on the nonprofit sector.

Compared to the first nine months of 2008, things were mostly worse in the first nine months of 2009. 51 percent of organizations that accept contributions reported that those contributions had decreased, compared to 35 percent last year. Similarly, 36 percent of grant makers reported a decrease in monetary awards, versus 16 percent in 2008.

No statistically significant differences were found in declining contributions across organization size, program area, or geography. Many respondents, however, cited a decrease in state and local funding as the major reason revenue was down. A smaller number said stimulus funds from the American Recovery and Reinvestment Act had helped stabilize their finances. Among the findings of the survey:

• 51 percent of respondents who accept contributions saw a decline in contributions over the first nine months of 2009 versus the same period in 2008. The major factors cited for a decline in contributions were fewer individuals giving (69 percent) and smaller gifts (69 percent).
• 62 percent of respondents experienced an increase in demand for their organization's services in 2009.
• 36 percent of grant makers decreased total monetary payouts; 27 percent gave more.
• Despite the tough year, most organizations were hopeful about 2010. Some 36 percent planned budget increases, and 29 percent expected to be able to maintain their current level of expenditures.
• For those organizations that expected to reduce their 2010 budgets, reduction in program services (59 percent) and salary freezes (54 percent) were the most frequently used techniques for making ends meet.

“I continue to believe that 2010 will be challenging for nonprofits. I am heartened, however, by the results of our latest survey,” said Bob Ottenhoff, GuideStar president and CEO. “Last summer, I was concerned that the optimism that characterizes the sector would prevent many of us from adapting to economic necessity.”

Otterhoff said the survey shows “the optimistic, can-do DNA that makes nonprofit leaders succeed despite the odds working against us as the 'new normal' begins to take shape" is probably still there. “Nonprofit leaders and their organizations persevere,” he said.