Tuesday, September 23

Not your father's economic crisis

Even grizzled fundraising veterans who have been through many recessions in the past are beginning to realize this is not your father's economic crisis... someonew who has been doing this job for three decades sent me this quote from the DMA Digest:

NONPROFITS BRACE FOR SLOWDOWN IN CHARITABLE GIVING.

The turmoil on Wall Street could further curb a giving environment that was already slowing down. The failure of Lehman Brothers and pain at other big firms threaten to cut into the corporate and individual donations that more than a million nonprofit organizations rely on for basic operations and charitable programs. Worse for charities, the height of the financial crisis is hitting just before the end of the year, when nonprofits typically bring in the largest amount of revenue as Americans open their wallets around the holidays. Officials at charities are trying to devise creative ways to stand out. They are making urgent appeals through direct-mail and email campaigns and taking to the airwaves. Charities also are gearing up to tap their wealthy board members and other well-off supporters for extra cash. If they fail, charities may have to cut staff or seek loans. The collapse of corporate balance sheets, along with strained household budgets, could start cutting into the more-than-$300 billion national charitable-giving pie. US charitable donations only grew by 1% adjusted for inflation in 2007, according to the Giving USA Foundation. That was before the worst of the housing correction and the current Wall Street crisis. In a recent Chronicle of Philanthropy survey of 77 businesses, 50 said they expected giving to remain flat in 2008. US companies donated an average of 0.8% of their pretax profits in 2007, down from 1.4% in 2004, according to Mark Shamley, president of the Association of Corporate Contribution Professionals. "Companies are looking to cut expenditures across" the board "and corporate giving is going to be part of that," he said.


I still think the biggest threat is that more banks are going to fail and I think too many nonprofits don't understand how FDIC rules apply to charities.

5 comments:

bethp said...

Thanks for the post and contributing to the discussion on how NPOs and charities will be affected by patterns of giving.

I'm not convinced that the outcome will necessarily be so dismal, though. I've blogged about it at http://www.onlinefundraisingblog.com/2008/09/a-way-out/

Anonymous said...

We need to stop wringing our hands about how hard our work is going to get. It is a time when the true leaders and doers will shine.

Stop and read Tom Peters' blog posts from the last few days at www.tompeters.com/archives.php?date=200809. Enjoy.

We can feel frustrated and defeated or we can take advantage of the opportunities to do great things for our organizations.

Anonymous said...

One great resource I found for how to start a nonprofit and also fundraising tips is http://www.oceangrand.org Nice site with very timely articles.

Penny said...

Well I'm sorry we're in this sad state of affairs. Greed got us in to it, giving will get us out. Charity Fundraising

guitta said...

I think that asking straight out for a donation is becoming harder and harder. I came across a fundraiser that I feel good about approaching my supporters because I know that I am giving them back a higher value than what they are donating. This site http://www.fundraisersuperstore.comhas a discount card fundraiser that is fantastic. They create the card for your organization with local vendors in just 4 weeks. The cards sell like hotcakes. That's my 2 cents