The Effect of the Economy on the Nonprofit Sector: An October 2012 Survey

Charities continued to feel the effects of the "Great Recession" during the first nine months of 2012, GuideStar's 11th economic survey shows. Asked how contributions between January and September 2012 compared to the same period last year, 37 percent of organizations reported a decrease, 28 percent stated contribution levels had stayed about the same, and 34 percent said they had increased.

As Chuck McLean, GuideStar's vice president, research, notes in the survey report, "Overall, the numbers for 2012 look very similar to the numbers for 2011, suggesting a nonprofit sector where things are not getting much better or much worse, at least from a financial perspective."

Other findings include:

• Smaller gifts from individuals was the primary reason (77 percent) organizations cited for declining contributions, followed closely by fewer individuals giving (75 percent).
• A little over half (51 percent) of the organizations represented in the survey receive the majority of contributions during the last quarter of the calendar year.
• Some 29 percent of participants expects that end-of-year giving will decrease compared to last year. Another 37 percent thinks it will be about the same, and 30 percent anticipates it will increase.
• A whopping 92 percent of respondents reported that demand for their organizations' services either increased over (64 percent) or stayed the same as (28 percent) demand in 2011.
• Some 42 percent of the organizations represented in the survey are planning to increase their budgets in 2013. Another 32 percent will keep their budgets flat, and 24 percent will reduce them.
• Freezing salaries was the method cited most often (38 percent) for cutting budgets.

Download a free copy of the survey report

About the Survey

A survey of public charity and private foundation employees was conducted online from October 4, 2012, until October 19, 2012. The purposes of the survey were to compare how charitable organizations fared during the first nine months of 2012 to previous years and to try to gauge the effect of the economy on the U.S. nonprofit sector. There were 500 usable responses, 476 (95 percent) from public charities and 24 (5 percent) from private foundations.

Publication date: November 2012