The Effect of the Economy on the Nonprofit Sector, October 2008 – February 2009
Executive Summary
A survey of public charity and private foundation employees was conducted online from March 2, 2009, until March 16, 2009, the first of three such surveys that will be conducted by GuideStar in 2009. The purpose of the survey was to try to gauge the effect of the downturn in the economy on the American nonprofit sector during the period from October 2008 to February 2009, compared to the same period a year earlier. There were 2,979 usable responses, 2,753 (92 percent) from public charities and 226 (8 percent) from private foundations. Among the findings:
- More than half (52 percent) of the organizations have experienced a decrease in contributions.
- About a third (31 percent) of grantmakers gave less money in grants over the five-month period.
- Despite the economy and its effect on contributions, only 35 percent of organizations cut their annual budgets from 2008 to 2009. That more did not reduce their budgets, however, reflects more an increased need for their services (59 percent cited an increase in demand) than prospects for raising the money they need to meet that demand.
- Of the organizations that have cut their budgets, the majority are making ends meet by cutting services (57 percent) and freezing staff salaries (45 percent). Thus far, only 30 percent have resorted to layoffs.
- Eight percent of organizations reported that they are in imminent danger of closing their doors because of a lack of financial resources.
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