The Effect of the Economy On the Nonprofit Sector
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1 GuideStar October 2012 Economic Survey 1 The Effect of the Economy On the Nonprofit Sector An October 2012 Survey Chuck McLean, Vice President of Research Carol Brouwer, Research Assistant
2 GuideStar October 2012 Economic Survey 2 A survey of public charity and private foundation employees was conducted online from October 4, 2012, until October 19, 2012, the 11th annual nonprofit economic survey conducted by GuideStar. The purposes of the survey were to compare how charitable organizations fared during the first nine months of 2012 to previous years and to try to gauge the effect of the economy on the American nonprofit sector. There were 500 usable responses, 476 (95 percent) from public charities and 24 (5 percent) from private foundations. The central question of this survey is asked of public charities that accept charitable contributions, Did total contributions to your organization increase, decrease, or stay about the same during the first nine months of this year, compared to the first nine months of last year? In 2012, 37 percent of respondents said contributions had decreased, 34 percent said they had increased, and 28 percent reported that they had stayed about the same. As the chart below shows, these responses are in keeping with the tepid recovery from the Great Recession that the economy has seen thus far. Overwhelmingly, the reasons given for the decline in contributions center around individuals, with 77 percent of respondents reporting that gifts from individual donors were smaller, and 75 percent reporting that fewer individuals gave. At the same time that about two-thirds of organizations were experiencing decreasing or stagnant contributions, they were experiencing an increase in demand for their services, with 38 percent reporting that demand had increased modestly and 26 percent reporting that demand had increased greatly. Overall, the numbers for 2012 look very similar to the numbers for 2011, suggesting a nonprofit sector where things are not getting much better or much worse, at least from a financial perspective. Complete results for the survey follow. Percentage of Public Charities Reporting Decrease in Contributions During the First Nine Months of the Year 60% 50% 40% 30% 20% 10% 0%
3 GuideStar October 2012 Economic Survey 3 GuideStar October 2012 Economic Survey Percentages are based on number of respondents to each question unless noted otherwise and do not total 100% in questions that allowed multiple answers. What type of nonprofit is your organization? Public charity (files Form 990, 990-EZ, 990-N, or is a religious organization) % Private foundation/grantmaker (files Form 990-PF) % Total 500 Does your organization accept contributions? Yes % No 5 1.0% Total 496 Did total contributions to your organization increase, decrease, or stay about the same during the first nine months of this year, compared to the first nine months of last year? Decreased greatly % Decreased modestly % Total decreased % Stayed about the same % Increased modestly % Increased greatly % Total increased % Don't know 4 0.8% Total 491
4 GuideStar October 2012 Economic Survey 4 Which factors caused total contributions to decrease? (Select all that apply) Percentages are based on the total number of organizations that responded to this question. Gifts from individuals were smaller % Fewer individuals gave % Private foundation grants were smaller % Corporate gifts were smaller % Private foundation grants were discontinued % Government grants were smaller % Government contracts were smaller % Corporate gifts were discontinued % Government grants were discontinued % Other % Government contracts were discontinued % Don't know 2 1.1% Total 180 Many charities report that they receive the majority of their contributions in October, November, and December. Is this true for your organization? Yes % No % Don't know % Total 489
5 GuideStar October 2012 Economic Survey 5 How do you think contributions to your organization during October, November, and December of this year will compare to contributions received during the same period last year? Will decrease greatly % Will decrease modestly % Total will decrease % Will stay about the same % Will increase modestly % Will increase greatly 5 2.0% Total increased % Don't know 9 3.6% Total 247 Did demand for your organization's services increase, decrease, or stay about the same during the first nine months of this year, compared to the first nine months of last year? Decreased greatly 8 1.6% Decreased modestly % Total decreased % Stayed about the same % Increased modestly % Increased greatly % Total increased % Don't know/not applicable % Total 495
6 GuideStar October 2012 Economic Survey 6 Does your organization award grants? Yes % No % Total 496 Did the number of funding applications or grant requests increase, decrease, or stay about the same during the first nine months of this year, compared to the first nine months of last year? Decreased greatly 4 5.4% Decreased modestly 4 5.4% Total decreased % Stayed about the same % Increased modestly % Increased greatly 7 9.5% Total increased % Don't know/not applicable % Total 74
7 GuideStar October 2012 Economic Survey 7 Did the total amount of money your organization awarded increase, decrease, or stay about the same during the first nine months of this year, compared to the first nine months of last year? Decreased greatly % Decreased modestly % Total decreased % Stayed about the same % Increased modestly % Increased greatly 4 5.5% Total increased % Don't know/not applicable 5 6.8% Total 73 Which measures did you take to reduce the total money you awarded? (Select all that apply) Percentages are based on the total number of organizations that responded to this question. We cut back on the types of programs we funded % We reduced the amount of payouts we had committed to % We stopped accepting grant applications % We only accepted applications from organizations that we have funded before % We did not make payouts we had committed to % Other % Total 19
8 GuideStar October 2012 Economic Survey 8 Since 2008, has your organization partnered or merged with another organization as a result of the economy? No % Yes % Total 491 Since 2008, has your organization redirected or refocused its program area/mission due to the economy? No % Yes % Total 490 How does your budget for next year compare to your budget for this year? Will decrease greatly % Will decrease modestly % Total decreasing % Will stay about the same % Will increase modestly % Will increase greatly % Total increasing % Don't know % Total 489
9 GuideStar October 2012 Economic Survey 9 Which measures will you use to reduce your budget? (Select all that apply) Percentages are based on the total number of organizations that responded to this question. Salary freeze % Reduction in employee benefits % Reduction in operating hours % Reduction in program activities/services % Salary reduction % Hiring freeze % Layoffs % Other % Total 115 For classification purposes, what is your primary responsibility with your organization? CEO/Executive Director/President % Development/Fundraising % Chief Financial Officer/Organization Treasurer % Executive Officer (other than CEO/Executive Director/President or Chief Financial Officer/Organization Treasurer) % Other % Board Member/Board Director/Trustee % Fiscal/Finance (other than Chief Financial Officer or Organization Treasurer) % Programs and Services 7 1.5% Communications 4 0.8% Marketing 4 0.8% Publishing 1 0.2% Volunteer 4 0.8% Total 481
10 GuideStar October 2012 Economic Survey 10 What is the main subject category in which your organization works? (Please choose only one) Animal Related % Art, Culture, Humanities % Civil Rights, Social Action, Advocacy % Community Improvement, Capacity Building % Crime, Legal Related 1 0.2% Diseases, Disorders, Medical Disciplines 5 1.0% Education % Employment, Job Related 8 1.7% Environmental Quality, Protection, Beautification % Food, Agriculture, and Nutrition % Health General and Rehabilitative % Housing, Shelter % Human Services % International, Foreign Affairs, National Security 1 0.2% Medical Research 1 0.2% Mental Health, Crisis Intervention % Mutual/Membership Benefit 1 0.2% Philanthropy, Voluntarism, and Grantmaking Foundations 8 1.7% Public Safety, Disaster Preparedness, Relief 1 0.2% Public, Societal Benefit 7 1.5% Recreation, Sports, Leisure, Athletics 4 0.8% Religion % Science and Technology Research Institutes, Services 1 0.2% Youth Development % Other % Total 481
11 GuideStar October 2012 Economic Survey 11 What is the size of your organization, based on total annual expenditures? ey 2012 Less than $25, % $25,000 to 99, % $100,000 to $249, % $250,000 to $499, % $500,000 to $999, % $1 million to $4,999, % $5 million to $19,999, % $20 million or more % Don't know 4 0.8% In which state is your organization located? CA % TX % FL % NY % IL % VA % OH % PA % IN % MN % MO % OR % WI % WA % AZ % GA % MA % MD % MI % OK 9 1.9% ME 8 1.7% NC 8 1.7% CT 7 1.5% 479
12 GuideStar October 2012 Economic Survey 12 NJ 7 1.5% CO 6 1.3% DC 6 1.3% NM 6 1.3% SC 6 1.3% TN 6 1.3% HI 5 1.0% KY 5 1.0% NV 5 1.0% VT 5 1.0% AL 4 0.8% MT 4 0.8% NH 4 0.8% DE 3 0.6% ID 3 0.6% KS 3 0.6% IA 2 0.4% RI 2 0.4% VI 2 0.4% AR 1 0.2% LA 1 0.2% MS 1 0.2% ND 1 0.2% NE 1 0.2% SD 1 0.2% Total 479
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