Survey: Fundraising Confidence Reaches New Low

December 18, 2008       Mark Hrywna      

Confidence in the fundraising climate declined 22 percent in the last six months, reaching its lowest level in a decade, according to a survey of nonprofit professionals released today.

The latest Philanthropic Giving Index (PGI), akin to a consumer confidence index for charitable giving, is at its lowest point since the Center on Philanthropy at Indiana University began the study in 1998. The PGI is down 21.7 percent in the past six months to 64.8, and off by 27 percent compared to last December. The previous low was 72.3 in the summer of 2003 while at its highest the PGI reached 94.6 nine years ago.

“This is a hard year for fundraisers at many organizations across the nonprofit spectrum. These results reflect that the U.S. economy is in recession,” said Patrick Rooney, interim executive director of the Center on Philanthropy. “Our research for Giving USA Foundation shows that total giving generally declines by about 2.7 percent annually during longer recessions. While we don’t yet know what will happen to total giving in 2008, the PGI is a strong indicator of the difficult challenges fundraisers are clearly concerned with as 2008 comes to a close.”

Reporting a tough fundraising climate in particular are human services, public benefit, environment/animals and international organizations. Fundraisers at health organizations had the highest PGI in any category though they still reported a difficult fundraising climate.

The PGI includes three indexes on a 0-100 scale based on a semiannual national survey of nonprofit fundraising professionals, all of which fell dramatically in the latest survey. The Present Situation Index (PSI), which gauges the current giving environment, is at 63.6 — its lowest level since summer 2003 and down almost 28 percent from a year ago. The Expectations Index (EI), which assesses the climate for the next six months, stands at 66.1, a 21-percent drop from six months ago and down 26 percent over last December.

The overall PGI is an average of the current and future indexes. Higher scores indicate more positive or optimistic attitudes about the fundraising climate.

“More than 93 percent of fundraisers said the economy is having a negative impact on fundraising, including 28.5 percent who reported a very negative impact,” said Una Osili, interim director of research at the Center on Philanthropy. “However, just over 21 percent of those surveyed expect the economic impact to be positive six months from now. We expect that different types and sizes of organizations will be affected in different ways.”

Fewer fundraisers reported success with major gifts for the second consecutive period. Statistically, significantly fewer fundraisers cited success with major gifts than they anticipated six months ago. Almost 72 percent of fundraisers reported success, the lowest measure since 2003. More success was reported with planned giving (72.9 percent) than six months ago (67.6 percent).

More than 40 percent of fundraisers reported that the extension of the IRA charitable rollover provision has increased fundraising to their organization this year. The IRA rollover allows those who are at least 70½ years of age to make charitable gifts from their Individual Retirement Account (IRA) without a tax penalty.

About 44 percent of fundraisers reported that giving by donors who had previously given less than $1,000 remained the same over the past year, while almost 30 percent reported they gave more in the past year. In addition, 69.3 percent of fundraisers reported the timing of scheduled pledge payments has remained the same this past year, while 65.2 percent said the payment of pledges in the full amount has remained the same.

The survey, sponsored by the Association for Healthcare Philanthropy, was mailed to 405 nonprofit development executives and fundraising consultants and had an overall response rate of 39.8 percent.