Nonprofits face drop-off in giving, driven by decrease in individual donations, survey finds

By Jonathan O'Connell
Monday, August 23, 2010

With state and local governments facing deficits, foundation endowments down and corporations cutting back, charities are increasingly looking to donations from individuals to shore up their budgets.

But people are giving less frequently and in smaller amounts of money to charities than in the past, according to a survey of executives at 6,800 nonprofits nationally by GuideStar USA, an organization that tracks finances of nonprofit groups.

Leaders from 278 charities in the District, Northern Virginia and suburban Maryland responded to the survey, performed June 14-28, and the local results track the nation closely. Of the local organizations, 37 percent said contributions of all types were down from last year; nationally, 40 percent of organizations said the same. Another 28 percent in both groups said contributions were the same as last year, and about 30 percent in both said contributions had increased.

A main reason for the drop-off appears to be a reduction in individual giving, with 67 percent of the charities nationally saying fewer individuals had made donations and 66 percent saying individuals' donations were smaller than in the past. Local results tracked a few percentage points behind.

"The bottom line is that individual giving drives philanthropy," said Chuck McLean, GuideStar's vice president of research.

McLean said that about 10 percent of giving typically comes from foundations and 90 percent from individuals. He said he was surprised that the Washington area, with its higher-than-average incomes and lower-than-average unemployment rate, did not seem to be faring better than the country at large. "I've racked my brain, why, why isn't D.C. doing any better?" he said.

McLean said there were two strategies successful nonprofit executives have been employing to hold things together during the extended economic downturn. First, he said, they are raising money with new ideas. "A lot of the organizations that are doing pretty well said that maybe they are doing a silent auction or something they've never done before ... They're trying new and different things," he said. And when they do receive donations, he said, they treat donors like a good business treats its customers.

So not all the responses are downhearted:

"The crisis has served as an opportunity to focus on our core programmatic strengths, and to redouble our efforts at maximizing administrative and IT systems ... We will emerge stronger and better positioned to deliver." -- Aaron Presnall, president, Jefferson Institute, D.C. told GuideStar's surveyors.

"Holding steady and taking extra effort with our grantors to communicate positive results." -- Tad Asbury, executive director, Marriott Foundation for People With Disabilities, Bethesda.

"It's been tough, but we're weathering the storm." -- Robin M. Waley, president and chief executive, Restorations Ministries, D.C.

Others were less sanguine:

"Fundraising demands were challenging. Since we have a very small staff and a half-time development director, there were many more demands on my time." -- Elizabeth Page, executive director, Falls Church McLean Children's Center.

"Nervous about the trend of smaller grants. I thought 2009 was going to be the bad year." -- Paula Rothenberg, president and chief executive, United Arts Organization of Greater Washington, Bethesda.

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