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Skagit Valley Hospital

Does It Matter Today How Much Giving Was Down During the Great Recession?

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As a member firm of Giving Institute, the parent organization of the Giving USA Foundation and publisher of Giving USA, we are looking forward with great anticipation to the June 20th release of the annual report for 2010.

A little controversy always helps to spice up the debate. Recently, the Chronicle of Philanthropy reported that new data from the IRS shows that giving by individuals dropped approximately 10.6 percent in 2008 compared to 2007, and an additional 9-14 percent in 2009 compared to 2008, for a combined two-year decrease of approximately 20 percent.  The IRS figures are in sharp contrast to the 2.4 percent drop estimated by the Giving USA report released in June 2010.

Giving USA is a leading benchmark for nonprofits and fundraisers, and the only record of American philanthropy that spans more than 50 years. It is the only annual data report on both sources and uses of contributions and its model of estimating total giving has been remarkably accurate over time. In fact, since the Center on Philanthropy at Indiana University began researching and writing the report in 2001, estimates of giving have been on average within 1.1 percent of the final IRS reported number and over the past four decades the average accuracy has been within 2 percent. As the two groups have been historically aligned, this anomaly warrants more examination.

We assembled the brain trust within our firm late last week to discuss what all of this means. Clearly, during the Great Recession, we have seen a bit of a drop off in giving, especially among mega-gifts of $25 million in more. The reports during 2010 are much more encouraging, and several $100 million and more gifts have been announced. Most donors that we interviewed in campaign studies in 2008 and 2009 indicated that their giving was holding steady or increasing as the recession ended and the economic recovery started. Most of our firm’s current and recent nonprofit clients are meeting and surpassing their annual fundraising goals, and those in major capital and expansion campaigns are making good progress.

However, the number of major campaigns that have started in our Northwest region since mid-2008 has been less than during the economic expansion of 2003-2007. The successful campaigns are ones conveying urgency and the promise of strong outcomes addressing critical issues facing our community, and the sponsoring organizations have a base of committed supporters and are able to clearly engage them in why the campaign is important today.

When we ask board members and nonprofit leaders how much they believe giving dropped off during the Great Recession years of 2008 and 2009, we typically hear that it must be 40 percent, 50 percent, maybe even more.

Perception is reality. If there is a belief that giving has decreased by a really significant amount, and that confidence is not yet restored, why would nonprofit leaders have confidence in taking bold steps to address critical missions and advance projects that can help drive the economic recovery?

Yes, giving has dropped some during the Great Recession. Is a decrease – whether it be two or 20 percent – sufficient reason to derail your plans and not be true to your mission? Donors are continuing to give, and many have a renewed appreciation for the difference they can make.

 

 

 

 

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