The Current Economy and Major Gifts Fundraising

I’ve previously posted resources for nonprofits coping with the economic downturn (Coping with a Troubled Economy, Fundraising Survival Guide, Economic Effects on Philanthropy). Here’s another: Kevin Johnson of Retriever Development Counsel posted a response to the question,

I’m preparing a major gift strategic overview and wanted to include updated thoughts on the current economic situation and how that might affect our numbers moving forward. Any thoughts on this would be greatly appreciated.

Some of Kevin’s points:

Comparisons to the Great Depression are inaccurate and dramatic. For example, estimates for unemployment for 2009 are 7% to 8%; in contrast, in 1933 unemployment peaked at 24.9%.

Since 1954, total giving increased in current dollars every year except one. Over the past 40 years, giving in current dollars averaged increases of 8.4% in years without a recession and increases of 6.2% in years with a recession.

In the 4 years with recessions, inflation adjusted giving only declined an average of 2.7%.

The impact of long recessions on giving varies by donor types. Not all organizations, or types of groups, experience the same changes in giving, even in recession years.

Foundation giving, a mainstay for many groups, will likely suffer in the several years to come as a direct result of portfolio losses. For many groups with a (disproportionately) high reliance on foundations, (this) will mean they will have to significantly increase their individual fundraising results to replace some foundation support.

He summarizes:

Overcoming fears and concerns of staff, board members, and donors may be THE most important task at hand today.

Groups must plan to change the scale and nature of their fundraising work now to match predicted foundation gaps.

Individuals tend to give to issues that cross socioeconomic boundaries – like environmental advocacy – and to organizations that have clear, compelling, and simple messages.

Middle donors – those giving from $500 to about $10,000 a year will likely be squeezed hard economically and may step back in large numbers.

For many groups, it will mean the SCALE and orientation of their fundraising work will have to change. It will require more time and larger budgets for fund-raising and messaging.

The full article, including footnotes, is at http://growingsocialprofit.blogspot.com/