Number of Nonprofits Reporting Decreased Contributions Rose, New GuideStar Survey Finds

Eight percent in danger of folding
Release date: April 8, 2009
Washington, D.C., and Williamsburg, Va.—The proportion of charitable nonprofits reporting decreased contributions grew from 34 percent for January through September 2008 to 52 percent for October 2008 through February 2009, a new GuideStar survey reveals.

GuideStar, the leading source of nonprofit information, asked individuals associated with charitable organizations how contribution levels for October 2008 through February 2009 compared to those for the same period a year earlier. This survey followed up on GuideStar’s 2008 nonprofit economic survey, which covered January through September 2008.

Some 20 percent of organizations reported that contributions had increased. Another 27 percent said that they had stayed about the same, 52 percent stated they had decreased, and 1 percent did not know. These results indicate that the financial deterioration seen in the first nine months of 2008 continued through the end of the year and into 2009.

Other findings:

  • Some 31 percent of organizations stated that contributions had dropped "modestly"; another 21 percent said that they had fallen "greatly."
  • A substantial majority—71 percent—of organizations for which contributions dropped noted that fewer individuals gave and that donors’ gifts were smaller.
  • About a third (31 percent) of grantmakers gave less money in grants over the five-month period.
  • Only 35 percent of organizations cut their annual budgets from 2008 to 2009.
  • That more organizations had not reduced their budgets reflects more of an increased need for their services (59 percent cited an increase in demand) than prospects for raising money needed to meet that demand.
  • The majority of organizations that had cut their budgets reduced services (57 percent) and froze staff salaries (45 percent). Only 30 percent had resorted to layoffs.
  • Eight percent of organizations reported that they are in imminent danger of closing their doors because of a lack of financial resources.
"The economy is having a profound impact on nonprofits," stated Bob Ottenhoff, GuideStar’s president and CEO. "That more than half of charitable organizations reported a drop in contributions during a period that included the last three months of the year, when giving traditionally rises, indicates the severity of the financial challenges nonprofits are facing. We will conduct two more surveys this year to see not only how nonprofits are faring but also how they are coping."

About the Survey

A survey of public charity and private foundation employees was conducted on-line March 2-16, 2009. There were 2,979 usable responses, 2,753 (92 percent) from public charities and 226 (8 percent) from private foundations.

Download a free copy of the survey report at http://publications.guidestar.org/nonprofit-economic-report.

About GuideStar

GuideStar, www.guidestar.org, connects people and organizations with information on the programs and finances of more than 1.8 million IRS-recognized nonprofits.

News Contact:

Suzanne E. Coffman
Director of Communications
(757) 229-4631, ext. 27
scoffman@guidestar.org