For the past 14 months we have been giving our perspective on how the recession would impact philanthropy and the nonprofit sector. In the summer of 2008 we said that we did not expect the recession to have a great deal of impact on giving for that year. Turns out we were correct as total giving declined by only 2% in 2008 according to Giving USA. Now, a 2% decline is still less money for the sector, but I would not suggest that you complain about that number to your friends in the real estate, construction, banking, automobile and travel industries.
In January of this year we advised that it was time to “go on the offensive” with your annual fundraising if you wanted to be successful. We had seen too many organizations that were becoming paralyzed by fear and deciding to “stop asking” for donations. Now, as we look back we see that those who ignored that advice and did put fundraising on the back burner are reporting dramatic declines in donations and many are in jeopardy of closing their doors.
In March we reported that a recent survey indicated that the overwhelming majority of Americans who give to charity indicated that they intend to give the same, or more, in 2009 as they did in 2008, but were likely to give to fewer organizations. So we strongly urged everyone to get out and make your case so as not to fall off the list and we provided “12 Tips for Fundraising During the Recession.”
In May we urged everyone to “let the donors decide”, again advocating that everyone must continue to solicit gifts and let the donors make the decision about their ability to give. After all, it is the donors’ money. We warned that projecting our own fears and hardships onto donors is very dangerous and that we should give them the courtesy of deciding what they want to do with their money.
In June we reported the 2008 Giving USA numbers which confirmed that giving was down only slightly from 2007 and that foundation giving reached an all time high in 2008.
In August we told you that the “worst is over” and it is time to get used to the “new normal”. That is, the state we are entering now that will be marked by stability and slow growth and is likely to stay with us for a while.
While we don’t claim to be economists or prognosticators, our years of experience have helped us to understand how the recession would impact giving, and, more importantly, enabled us to provide sound advice on how to survive it.
So what do we advise next? If you have already put a capital campaign on hold and are about to pull it back off the shelf, or if you have decided that you need to start a campaign in the next 18 months – our advice is to lace up your running shoes and start sprinting.
Almost everyone we talk with in the sector expects a virtual tidal wave of capital campaigns over the next two years, as projects that were delayed by concern about the economy come online, along with projects that were initially slated for this time frame. Add to that the organizations just realizing that they need to expand because of the increased demand of the economy. And, now that leading indicators are trending positive, the Dow is up 45% off its March lows, real estate is selling again, manufacturing is rebounding and consumer confidence in increasing, we are seeing a dramatic increase in capital campaign activity. This activity is not the product of naiveté or unbridled optimism, but a realization that the work of their organizations is just as important now as it was two years ago and that they need philanthropic support if they are to thrive. People realize that the recovery will be slow and that the “new normal” is already here. If you are waiting for conditions to return to 2006 and 2007 levels to start fundraising you are going to be waiting a long, long time – which probably means you don’t really “need” the planned projects.
Past performance may not be a predictor of future performance, but we’ve been right many times during this recession and I think we are on target again. The capital campaign tidal wave is coming and you can either get in front of it or get run over by it.