Charities Seeing Slight Recovery in Giving, But Not Enough to Keep Up with Demand or Budget Cuts

Nonprofit organizations have seen a slight turnaround in giving so far this year that mirrors the slow economic recovery, a new survey from the Nonprofit Research Collaborative (NRC) finds. But the small rebound hasn't been enough to help many nonprofits that are grappling with staff and service cuts even as demand for their services has increased.

The national survey showed that 36 percent of charities reported an increase in donations in the first nine months of 2010, compared with only 23 percent in the same period of 2009.

Thirty-seven percent of charities reported a decrease in giving, a dramatic change from 2009's 51 percent. Among those experiencing a decline in giving, the main reason cited was fewer individual donations and smaller amounts. Lower amounts received from foundations and corporations also contributed to the overall lower giving amounts at these charities. Giving remained unchanged at 26 percent of nonprofits in 2010 vs. 25 percent in 2009.

"We are beginning to see some positive signs, but despite that giving still has a long way to go to return to the levels it was at three or four years ago," said Patrick M. Rooney, executive director of the Center on Philanthropy at Indiana University, which spearheaded the collaboration. "One-fifth of charities in the survey said their budgets for 2011 will be lower than for 2010, forcing many of them to look at cuts in services, salaries and staff."

Among the 20 percent of nonprofits anticipating reduced budgets next year, 66 percent say they will have to reduce programs, services or operating hours, 59 percent expect to cut or freeze staff salaries or benefits, and 49 percent are planning layoffs or hiring freezes.

"The Nonprofit Fundraising Survey: November 2010" is the first product of a collaboration involving six organizations that serve the nonprofit sector: the Association of Fundraising Professionals, Blackbaud, the Center on Philanthropy at Indiana University, the Foundation Center, GuideStar USA Inc., and the Urban Institute's National Center for Charitable Statistics.

"For the first time in two years, there is cause for cautious optimism about the nonprofit sector in this economy," said Bob Ottenhoff, president and CEO of GuideStar. "Nonetheless, in this latest study, as in all prior years, nonprofits also are reporting increased demand for their services. Even as giving increases, philanthropic dollars fall short of the amounts needed to help people in our country and abroad."

Demand for services increased at 78 percent of human service nonprofits and 68 percent of charities overall in 2010. Charities will be hard-pressed in 2011 to secure funding for growing needs, especially as individual and foundation donors are cautious about boosting support and other sources of funding — including government contracts for services — are cut.

"Younger, less well-established nonprofits have been especially hard hit by the recession," noted Lawrence T. McGill, vice president for research at the Foundation Center. "Many foundations, seeking to maximize more limited resources, have steered their grantmaking toward organizations they believe have the best chance to weather the economic storm."

Other Key NRC Survey Findings:

• In four of eight subsectors, the share of organizations reporting an increase in contributions was about the same as the share reporting a decrease. The four with nearly equal percentages of organizations with giving up and giving down are: arts, education, environment/animals, and human services.
• International organizations were the most likely to report an increase in contributions, reflecting donations made for disaster relief.
• In three subsectors — health, public-society benefit, and religion — a larger share of the organizations reported declines than reported increases.
• The larger an organization's annual expenditures, the more likely it reported an increase in charitable receipts in the first nine months of 2010 compared with the same period in 2009.
• Most organizations were guardedly optimistic about 2011. Forty-seven percent plan budget increases, 33 percent expect to maintain their current level of expenditures, and 20 percent anticipate a lower budget for 2011.

The Collaborative and Survey Methodology

By working together, the Nonprofit Research Collaborative can reduce the number of surveys nonprofits are asked to complete, collect information more efficiently, and analyze it in more useful ways to create the benchmarks and trends that nonprofits and grant makers use to guide their work. Each partner has at least a decade of direct experience collecting information from nonprofits on charitable receipts, fundraising practices, and/or grantmaking activities. Survey participants will form a panel over time, allowing for trend comparisons among the same organizations. This approach provides more useful benchmarking information than repeated cross-sectional studies.

The first NRC survey, based on questions that GuideStar used for its annual economic surveys, was fielded between October 19 and November 3, 2010. It received 2,513 responses. More than 2,350 charities completed the questions, as did 163 foundations. The analysis for grant makers includes responses from charities that make grants but that are not foundations. These include United Ways, Jewish federations, congregations, and a number of other types of organizations. There were responses from 386 grant makers.

The respondents form a convenience sample. There is no margin of error or measure of statistical significance using this sampling technique, as it is not a random sample of the population studied. However, given the long-running nature of GuideStar's economic surveys and the strong relationship between findings in those studies in prior years and actual results once tax data about charitable giving are available, the method employed here is a useful barometer of what charities experience and what total giving will look like. In the future, the NRC surveys are expected to occur in early winter, spring, and fall every year.

"The Nonprofit Fundraising Survey: November 2010" (PDF), which includes responses broken down by types of nonprofits and budget size, can be downloaded at no charge from the Gain Knowledge area of the Foundation Center's web site.

The Arts as an International Force for Change

Twenty-five Chinese Ministry of Culture executives just left my office. It was exciting to learn about Chinese cultural investment in projects -- from massive contemporary visual art colonies in Beijing and Shanghai to an exploding phenomenon of cultural festivals in cities and villages throughout their colossal country. They in turn were eager to learn how the arts industry is structured and supported in the United States. As they were leaving my office, 35 French, Belgian and Spanish business leaders arrived with the cultural officer from the French Embassy. They, too, were excited to learn how the arts industry is supported in the United States.

Last month, I was brought in to speak to arts groups and government and business leaders in Amsterdam; other Americans for the Arts staff members went or will go to Brussels, London, Korea, and Germany just this fall. Each of these countries wants to learn how the arts industry in America is supported and how private sector giving to the arts works. They are especially curious about how business donations "flow" into the bank accounts of U.S. arts organizations, and to capture the compelling arguments that motivate elected officials to "shower" the arts with public dollars and supportive policymaking in America.

What is going on? World governments are increasingly excited about the economic power of the arts and the value of cultural exchange in a changing world. Because the prodigious levels of government support in Europe and Asia are diminishing, they want to better understand our American advocacy techniques. And as they observe the sea of corporate logos on the backs of most U.S. performing arts programs, they want to know America's secret to eliciting substantial business support for the arts.

However, the leaders from these other countries are often quite disappointed when I tell them that the result of our mightiest, most sophisticated advocacy efforts generates just 9 percent of the total income for U.S. nonprofit arts organizations. Equally disappointing is that private sector support in America is only 31 percent, mostly from individuals. Business support -- despite all the logos and brand recognition -- is only about 5 percent. Yet these foreign leaders and delegations keep coming because they see the breadth of creative and innovative arts organization we have here. They see the freedom of ideas, the variety and the sheer pluck and entrepreneurial spirit of America's arts community.

In September 2009, at the Sundance Preserve, Robert Redford and I convened our fourth National Arts Policy Roundtable for CEOs, elected officials and opinion leaders to discuss how the arts strengthen 21st century global communities by helping create better understanding and stronger relationships between the U.S. and the world .

Thinking about this 21st century global marketplace, four key cultural imperatives jumped out:

1. The arts are a global economic force.
2. The arts are an aggressive part of today's international competitive marketplace.
3. Improved cultural understanding is essential in international dialogue.
4. The arts make dramatic contributions to our national security.

The report complements what has been a recent growth of dialogue and interest in making a case for the strength of the arts in U.S. diplomacy and with key decision-makers. Margaret (Peggy) Ayers at the Robert Sterling Clark Foundation has pioneered groundbreaking research on our private sector's role in supporting U.S. cultural exchange. Former Congressman John Brademas, with his Brademas Center for the Study of Congress' Project on Cultural Diplomacy at NYU, is spearheading an effort to reinvigorate Congress' role in supporting the arts in our cultural diplomacy efforts.

From the Huffington Post. Read more here.

Nonprofits Have Big Role in State

As Governor-Elect Andrew Cuomo and legislators shape their plans for New York next year, they should pay close attention to the state's vibrant not-for-profit sector, as it is the standard-bearer for innovation and service to the state and its people. The 80,000 not-for-profit organizations in the state play crucial roles: leading efforts to prevent or cure disease, alleviate poverty, advance education, address environmental and social concerns, and ennoble through culture.

New York's robust charitable sector, including such powerhouses as Columbia University, Sloan-Kettering, the Red Cross, the Ford Foundation and Lincoln Center, as well as community-based organizations, such as local drug-prevention programs, small community theaters and religion-based charities, help fuel the state's economy, generating over $150 billion in revenue annually and employing hundreds of thousands of New Yorkers. Second in size only to the government as an employer in the city, the nonprofit sector provides more jobs than the financial and insurance industries combined.

Working together, state government and nonprofits can help maintain our state's primacy as innovator, incubator and magnet for investment. Here's how.

* Adjust taxes to encourage more giving. For example, reward taxpayers for increases in year-over-year charitable giving and incentivize artists to donate their work to charity auctions in support of good causes.

* Promote regulatory, administrative and legislative reforms that make it easier to start and operate nonprofits, especially in high-tech, medical research and green industries.

* Encourage and facilitate partnering among nonprofits and between them and for-profit businesses. For instance, provide a clearinghouse so that environmental groups can pair up with green-tech businesses or so arts-in-education organizations can collaborate with founders of charter schools.

* Incentivize nonprofits to hire recent college graduates to fill needed roles while they learn important lessons about professional development and social responsibility.

* Rearrange state budgets with existing charitable resources in mind. For example, recalibrate school aid and Medicaid expenditures so that public spending on students, the elderly and the disabled complements and stimulates private nonprofit resources and support.

* Safeguard against encroachments on sales- or property-tax -exemptions, which would hurt already-stretched hospitals, elder-care facilities and YMCAs.

* Promote visibility for worthy nonprofits by providing voluntary check-offs on state tax forms.

* Include nonprofit destinations in the state's promotion of tourism and convention activity.

* Make nonprofits part of New York's federal lobbying strategy.

The public's trust in state government may be at a low ebb, but public support for nonprofits endures. By recommitting himself to the well-being of our valuable nonprofit institutions, Mr. Cuomo can take important steps toward reclaiming the state's role as a national beacon and perpetuate its highest ideals.

by Lesley Freidman Rosenthal, for original article click here.

Nonprofit Knowledge Matters: Advocacy as a Core Capacity

When we think of "capacity building," we most often think of training staff and board members - perhaps to be more effective fundraisers or to leverage technology to improve program delivery.

How often do we think of advocacy as a core capacity?

A nonprofit needs a clear voice that rises above the din to be effective at accomplishing its mission. Nonprofits need the capacity to communicate:

• how their work results in positive change
• why donors should support them, and
• who is helped by their work.

Often, nonprofits also need to communicate what action they hope their stakeholders will take in support of the nonprofit’s mission. These are examples of how nonprofits engage in advocacy!

Advocacy requires communications capacity: Does the nonprofit have the right technology to update its website and effortlessly send out attractive email blasts? Can the nonprofit maintain and easily update a database so that its communications are reaching the right audiences? Does the nonprofit employ staff or engage volunteers who are trained in media relations so that when the local radio calls and asks for a comment on a breaking story the nonprofit is prepared?

Advocacy may also require courage. How so? There are still many who do not think that advocacy is an appropriate role for nonprofits. The National Council is working every day to change that perception, and thankfully, more and more nonprofits, as well as those that support them, are aware that advocacy is a core capacity for any nonprofit.

The Capacity Building Hub on the National Council's website features resources that address building capacity for advocacy, including links to reports illustrating why advocacy is one of the best investments that a foundation can make in a nonprofit.

Read a recent study by the National Committee for Responsible Philanthropy that found that of the 20 nonprofits studied, "These nonprofits leveraged foundation grants that generated a $150 return for every dollar invested in their policy engagement efforts."

Measuring the impact of advocacy activities can be difficult.

We like the approach taken by the Innovation Network in its Practical Guide to Advocacy Evaluation that urges nonprofits not to measure the hoped-for-end-result of an advocacy effort such as ending hunger in our state (that could take decades to attain) but rather to focus on the contribution the nonprofit is making to the goal.

Nonprofits that shine a light on those contributions, even incremental ones, such as bringing local nonprofits to the same table with government officials, will capitalize on the momentum they create, and provide their stakeholders with a concrete example of the positive effects of advocacy in a community.

Does someone you know still think that nonprofits can't be advocates? Or that nonprofits, "can't lobby?"

Help them understand why advocacy is legal, needed, and easy.

Visit our website for more capacity building tools including:

• Communications and marketing resources.
• Ideas on capacity building for planning.
• Tools for self-assessments, analyzing costs of programs, and guidance for building a nonprofit's board.

NYSCA: Actors Fund Affordable Housing Survey

As a member of the professional performing arts and entertainment community, have you struggled to find affordable housing?

If so, the Actors Fund Housing Development Corporation (AFHDC) wants to hear from you.

NYSCA is working with AFHDC in their efforts to learn about the housing needs of the performing arts and entertainment community in the New York/New Jersey and Eastern Pennsylvania regions.

From now until December 6th, you can participate in a 10-minute survey to help them determine the unique affordable housing needs of entertainment professionals.

Your opinion is vital as your responses will assist AFHDC in determining interest, need, design, amenities and more! Your input, and the input of your friends, will move this project forward!

Take the survey now at www.ActorsFundHousingSurvey.org.

If you have questions or need more information, contact The Actors Fund Survey Team at 212.221.7300 ext 107.

For more on The Actors Fund, please visit www.actorsfund.org.

Spread the word and help us help AFHDC!

Keeping Your Board Engaged

From guidestar.com: As 2010 winds down, I wanted to answer a question that came up several times in response to my GuideStar Newsletter articles this year:

How do I keep my board engaged? Particularly if it's a statewide or national board?
This is a question I get all the time. Everyone wants their board to be engaged, but ...

What do you really mean when you say an "engaged board?" Do you want your board members to be just paying attention? Or do you want something more?

How's this for a definition: "Engagement is inspiring passion in someone so they will want to take action." (This definition of engagement comes directly from a terrific new book, The Dragonfly Effect, by Jennifer Aaker and Andy Smith, which I highly recommend.)

So let's reframe the question:

"How do I inspire passion in my board members—whether they are local or far flung—so they will want to take action?"

In order to do accomplish this larger goal, your board members need to know what your organization is trying to accomplish and what their role is to make it happen. This is a big shift for many boards. I find that organizations don't have a clear set of goals each year and don't know what they want their board members to do.

You need to be able to express your goals in terms of how many people you want to help, such as: "If we raise $250,000, we can help 1,400 families."

Instead, organizations often say, "We want to help as many people as possible." If your board members know exactly what your goals are for the year, then they can rally around them. Clear goals help define your organization's effort for the year. And clear goals give people something to strive for.

Here's a plan for you if you want to keep your board members fully engaged.

1.Be sure your board members know what you are aiming to accomplish this year.
Put it in real numbers. For example:
* How many kids will we send to camp?
* How many meals do we want to serve?
* How many scholarships will we award to bright young students?

2.Be sure they know what the impact will be if you can make your plan happen.
Put it in real-people terms and talk about the ultimate benefit. For example:
* We'll help kids who go to camp be healthier, have better self-esteem, and do better in school.
* We will help hungry people get nutritious meals right here in our community.
* We'll help our brightest minds so they can help solve tomorrow's problems.

3.Be sure every board member knows what his or her job is to make the plan happen.
If you want to keep them engaged, you've got to give them clear actions. Everybody gets to have a role in implementing your plan. For example:
* Some board members are in charge of phoning donors to say thank you.
* Others are seeking sponsors for your annual gala.
* Others are in charge of enlisting more volunteers.
* Others are serving on a task force to identify VIP prospective donors.
* Others may be serving on a governmental relations committee to strengthen your relationships with elected officials.

The deal is this: EVERYBODY on the board has a job and is in action for the cause.

4.Keep in close touch with your board members each week or month, letting them know of your successes.
* Success breeds success.
* Good news stimulates momentum and makes everybody happy.
* It encourages action.
* Peer pressure will also encourage everyone to step up and do their job, too.

Also ask for help frequently from board members if you need it. But ask for specific things.

Try these strategies, and see if your board doesn't get fired up!

Gail Perry, MBA, CFRE

Nonprofit Times TV

Nonprofit Times TV has a collection of webcasts and other videos directed specifically to nonprofits and their needs and interests. Videos cover not just current news, but issues such as fundraising, volunteer management, legal issues, and finance. Most videos are less than three minutes, giving necessary information without taking too much time. Users can also submit their own videos to share ideas with others in the sector.

Their current webcast discusses the loss of revenue of national nonprofit organizations and the Jerry Lewis telethon. Check out Nonprofit Times TV here.

Tompkins County Chamber of Commerce Honors Members as Businesses of the Year

Alternatives Federal Credit Union, The Plantsmen Nursery, Ithaca College, and Finger Lakes ReUse have been named the recipients of the 2010 Business of the Year Awards given by the Tompkins County Chamber of Commerce.

Alternatives Federal Credit Union was named as the winner of the David R. Strong Small Business of the Year and The Plantsmen Nursery was named the New Business of the Year.

Alternatives Federal Credit Union CEO Tristram Coffin was elated, saying, “We are thrilled and honored to be selected as the Chamber's Small Business of the Year. This recognition illustrates the power of business as a tool to make a positive difference in the lives of underserved people and communities.”

Dan Segal, owner of the Plantsmen Nursery, said, “We’re honored to receive the Chamber’s New Business Award because it validates our efforts to offer something unusual in the nursery/landscape field, and recognition from the Chamber adds depth to the growing credibility of our business. I also see it as a nod towards our genuine efforts to be a clean and green business while still managing to grow beyond a marginal enterprise. And as the award reflects on our civic involvement, we wouldn't be successful without the patronage and trust of our community, so we really enjoy supporting as many local projects as we can, as a way of showing our gratitude and giving back. It may sound corny but it's true!”

Ithaca College was named the Large Employer of the Year Award, and Finger Lakes ReUse was awarded the Not-for-Profit Organization of the Year from the Chamber of Commerce.

Ithaca College President Tom Rochon stated, “Being honored by the Chamber of Commerce as the Large Employer of the Year is an accolade that is truly shared by every single member of the Ithaca College community. Our faculty, staff, and students are constantly striving to find ways to support and contribute to the betterment of the larger community in which we all reside, and it is on their behalf that I accept this very meaningful recognition.”

As the recipient of the Not-for-Profit Organization of the Year, Diane Cohen, Executive Director of Finger Lakes ReUse, stated, “We're very pleased to receive this award from the Tompkins County Chamber of Commerce; it is a great way to recognize our amazingly dedicated board of directors and hard-working staff of 13 employees; all of whom helped establish Finger Lakes ReUse as an organization with a clear and achievable mission: to enhance community, economy, and environment through reuse. We are grateful for the community support we’ve received since we opened the ReUse Center less than two years ago. We are happy to say that we have now re-purposed more than 100,000 unwanted items including furniture, housewares, building materials, computers, and electronics. We couldn’t have done any of this without key support from our volunteers, and all those who have supported our efforts from the start, particularly Tompkins County Solid Waste and Cornell Cooperative Extension of Tompkins County.”

“The dozens of very qualified nominees for these awards were both a challenge and a delight. The awards committee members devoted many hours to reading the excellent applications, but it was a very real pleasure to learn more about these well-run and mission-driven businesses and organizations”, said Tompkins Chamber President, Jean McPheeters.

The Chamber Awards will be given to the recipients at two luncheons. The first will be on Thursday October 14 at the Lakewatch Inn, where Alternatives Federal Credit Union and The Plantsmen Nursery will receive their awards. The second luncheon will be on Friday November 19 at the Holiday Inn Downtown. Please go to www.tompkinschamber.org to register.