The nonprofit world has suffered greatly from the “Great Recession.” Most nonprofits have struggled, and some have closed their door as funding has decreased from just about every source—individuals, foundations, corporations and the government—as well as from “earned revenue,” e.g. ticket sales, fees, etc.
For example, The Chronicle of Philanthropy reported in February that the median gift amount from the 50 most generous individual donors fell 47% from 2007 to 2010, (see “Wealthiest Donors Turned Frugal in 2010: The Chronicle of Philanthropy.”)Total contributions last year from those individuals were the lowest since the publication began keeping track in 2000.
At the same time, the picture on the government front is bleak. Many states are slashing funding, and service agencies and arts organizations are prime targets. At the federal level, discussions have moved from whether to eliminate funding for popular programs to a debate about how many billions to cut.
On the positive side, with the stock market rallying, fears of a double-dip recession ebbing and uncertainty about some estate tax rules resolved, individual giving could rise in 2011. Wealth managers have a unique responsibility to guide their clients to assure their donations have an impact.
Ensuring Nonprofits’ Survival
However, formidable challenges remain. As donors consider supporting nonprofits, they should make sure that these organizations take steps to survive in the current economic climate—and to prepare for inevitable future downturns.