INDIANAPOLIS – Nonprofits are somewhat less optimistic about the present and future fundraising climates than they were six months and one year ago, according to the Philanthropic Giving Index (PGI) released today by the Center on Philanthropy at Indiana University.
A large majority of fundraisers surveyed for the study also said that special events are effective fundraising tools for their organizations.
The PGI, similar to a Consumer Confidence Index for charitable giving, includes three indexes on a scale from 0 to 100, based on a semiannual national survey of nonprofit fundraising professionals. The Present Situation Index gauges the current giving environment. The Expectations Index assesses the climate for the next six months, and the overall PGI is an average of the current and future indexes. Higher scores indicate more positive or optimistic attitudes about the climate for fundraising.
In the latest survey, all three of the main indexes (overall PGI, Present Situation Index, and Expectations Index) fell from their previous levels. Though these numbers rose slightly at the end of 2007, they have since declined below those reported in Summer 2007. The overall PGI was 82.8, a decrease of 6.0 percent since December 2007 and down 4.7 percent from this time last year. The Present Situation Index was 81.7, a decrease of 6.3 percent from six months ago and down 3.7 percent from one year ago. The Expectations Index, at 83.9, also dropped in the six-month and annual timeframes, declining by 5.8 percent.
In the 10 years since the study began, the overall PGI has ranged from a low of 72.3 in Summer 2003 to a high of 94.6 in December 1999.
With the exception of direct mail, fundraisers in the latest survey experienced less success with all types of fundraising techniques in the first half of 2008 than they predicted last December. For example, all types of organizations predicted more success with planned giving and special events (83.3 percent and 71.1 percent respectively) than they reported in Summer 2008 (67.6 percent and 59.4 percent respectively). The new PGI report also reveals that respondents identified the economic environment - including layoffs, corporate losses, stock market declines, and rising gas prices – as a serious factor that impacts giving.
“The percentage of fundraisers reporting a negative impact of the economy on giving has grown significantly,” said Patrick M. Rooney, director of research at the Center on Philanthropy. “Just over 83 percent of fundraisers reflect that view now, as opposed to 48 percent six months ago. For some corporations and donors with lower or fixed incomes, philanthropy may be seen as a kind of luxury good. Nonprofits could be recognizing that dynamic and are seeing reduced fundraising success in the short-term.”
Only 0.7 percent of fundraisers report that the impact of the economy on giving is positive, down from about 28 percent in December 2007. Fundraisers from health organizations and human service organizations were the most pessimistic about the impact of the economy on fundraising now (100 percent and 89.5 percent respectively). Human service organizations, one of the first types of nonprofits to be impacted by uncertain economic conditions, were the least optimistic about the future fundraising climate rating the Expectations Index at 68.0, nearly 16 percent lower than the average for all respondents.
“We now know that concerns about the economy have affected perceptions of the charitable giving climate, and previous research shows that giving grows more slowly during these times,” said Eugene R. Tempel, executive director of the Center on Philanthropy. “However, many donors still want to give. Nonprofits should take this opportunity to diversify their funding sources, create or strengthen their major gift programs, and find new ways to communicate the impact of their missions on those they serve.”
Some fundraisers predict a turnaround in the impact of the economy according to the report. Just over 15 percent predict a positive impact of the economy on fundraising six months from now. However, 62.7 percent said its impact will remain negative.
In the latest survey, fundraisers were also asked a series of questions about using special events as a fundraising technique. About two-thirds of nonprofits surveyed held between one and five special events in the past year, while 15.4 percent held no events in the past year. Almost half of the fundraisers (49.1 percent) said that special events account for 1 percent to 5 percent of their nonprofit’s total contributions, while 31.6 percent said they account for 6 percent to 15 percent. Only 3.5 percent of respondents said that special events account for over 50 percent of their total philanthropic revenue.
A large majority of respondents said that special events provided a return on their investment. About three out of every four fundraisers (74.3%) indicated that their most recent event was very effective or slightly effective in promoting the mission of the organization, while 83.9 percent said the event was very or slightly effective in raising philanthropic dollars.
“Special events can be effective fundraising tools, and they engage new constituents and strengthen existing relationships,” said Timothy L. Seiler, director of The Fund Raising School and Public Service at the Center on Philanthropy. “Yet in these times, as in any, nonprofits should incorporate special events into a sound overall strategy—relying on events or any other single fundraising technique is not likely to bring an organization the success they are hoping for.”
Other key findings include:
- Just under one-third (31.9 percent) of those surveyed reported receiving between $15,000 and $49,999 in net revenue from their most recent special event. Less than five percent said their total net revenue was less than $0, while 19.1 percent said it was between $0 and $14,999.
- Nearly 30 percent of those surveyed reported that their most recent special event was a benefit dinner with an auction. An additional 20.2 percent said that they held a sporting event such as a golf tournament, race-a-thon, or bowling event, while only 12.3 percent held a benefit play, concert, or donor stewardship event.
- Organizations with a national donor base were more likely to hold 10 or more special events in the past year than other types of organizations.
- Health fundraisers are more likely to hold a sporting event as a way of raising charitable revenue than their peers in other types of organizations.
- Large organizations, those with revenue greater than $10 million, were more likely to hold a benefit dinner with an auction.
The full PGI report, including results by organization size, donor base and subsector (e.g., arts, environment, etc.), is available to premium services members of the Center’s Web site at
http://www.philanthropy.iupui.edu/PremiumServices/login.aspx or may be purchased at
http://www.philanthropy.iupui.edu/Products/products_research.aspx. Journalists may obtain the full report from Adriene Davis, (317) 278-8972, or Josh Sprunger at (317) 278-8932,.
PGI survey participants are chosen to represent a cross-section of nonprofits nationwide in terms of geographic region, annual revenue size and type of organization. The survey was mailed to 409 nonprofit development executives and fundraising consultants. Of those, 144 fundraisers and consultants responded, for an overall response rate of 37.5 percent. The survey was sponsored in part by the Association for Healthcare Philanthropy. Survey administration and coding of data was conducted by the Center for Survey Research at Indiana University.
The Center on Philanthropy at Indiana University, a part of the Indiana University School of Liberal Arts at Indiana University-Purdue University Indianapolis, is a leading academic center dedicated to increasing the understanding of philanthropy and improving its practice worldwide through research, teaching, public service and public affairs programs in philanthropy, fundraising, and management of nonprofit organizations.
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