Two reports released in the past few days analyze key aspects of foundation grantmaking and nonprofit finances for 2010.
Moving Beyond the Economic Crisis: Foundations Assess the Impact and Their Response continues the Foundation Center's exploration of the effect of the recession on grantmaking and operations at the largest foundations in the United States. This new research advisory finds that, in comparison to 2009 when survey results pointed to a "steeper than anticipated reduction" in giving, foundation giving in 2010 appears to have stabilized and seems to be poised to begin to grow by modest amounts in 2011. Another sign of growing stability within the philanthropic sector is the finding that few foundations expect to maintain the "radical changes" in operations they made in 2009 (which included cuts in staff) over the longer term. However, the report points to the changes to foundation operations that will most likely remain in place.
In light of these findings indicating modest gains in foundation giving for 2011, it is interesting to review another sector-wide survey, the November 2010 Fundraising Survey, which focuses on overall charitable giving for the first nine months of 2010. The report, released today by the Nonprofit Research Collaborative, surveys nonprofit organizations on, among other questions, changes in total charitable contributions received from 2009 to 2010 and increases to the demand for services they have experienced in the same time frame.
In terms of total contributions, 26 percent of nonprofit organizations reported no change from 2009 to 2010; 37 percent reported a decrease and 36 percent an increase in total charitable contributions in relation to 2009. In that year, over 50 percent of nonprofits reported a decrease while only 23 percent reported an increase in total contributions received. Overall, in 2010, nonprofits with higher annual expenditures were more likely to report an increase in charitable contributions: 46 percent of organizations with $20 million and above in annual expenditures reported an increase in charitable contributions, while only 23 percent of organizations with annual expenditures of less than $25,000 reported increases.
In a breakdown by giving source, a large proportion (up to 75 percent) of nonprofits that reported decreases in giving indicated that giving from individuals declined due to fewer and smaller contributions. In terms of foundations and for nonprofits reporting decreases, up to 55 percent indicated a decline in grant amounts, but fewer (about 31 percent) reported the outright discontinuation of current grant funds. Corporate giving showed similar patterns.
Of the 2,350 nonprofits surveyed, 68% reported an increased demand for their services in the first nine months of 2010. Foundations also saw an increase in demand for funds; of the 163 private foundations surveyed, 52 percent reported a higher number of applications in 2010 than in 2009. A corresponding 49 percent of these foundations planned to increase their budgets in 2011. These findings seem to show that indicators for modest growth in 2011 reported in Moving Beyond the Economic Crisis may be on target.
While these findings point to what Bob Ottenhoff, president and CEO of GuideStar, calls a "cautious optimism" after two years of negative results, all recognize that even an increase in foundation giving will not be enough to cover ongoing and increasing needs. To take full advantage of limited resources, foundations have, according to Larry T. McGill, vice president of research at the Foundation Center, "... steered their grantmaking toward organizations they believe have the best chance to weather the economic storm." For smaller and newer organizations, this is the economic environment in which they will compete.
Both reports offer much more in-depth information on these and related topics, including analyses of international and disaster giving. Press releases and links to the full-text for these year-end reports can be found on the Foundation Center's web site.
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