Fundraising Headlines Sometimes Hide the Truth for Small Organizations

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January 24, 2012; Source: Memphis Daily News | A recent study of giving levels by Blackbaud Index of Charitable Giving heralded a 1.4 percent increase in charitable giving, which brought it even with pre-recession levels. We winced when we saw the headline “Fundraising Returns to Pre-Recession Levels” and could just imagine executives and boards all over the country asking themselves, “What are we doing wrong? Why are we still hurting?” The reality is that the headline hid the tiny fact that, for smaller organizations with budgets less than $1 million, revenues continued to decrease—declining 2.5 percent over a three-month period that ended in November.

On the other hand, nonprofits with a previous-year revenue of $1 million to $10 million realized an 8.2 percent increase. Oddly, nonprofits with revenue greater than $10 million saw a decline, though it was a decline of less than one percent.

The fact is that three quarters of the nonprofit sector is made up of organizations that report revenues of under $500,000, according to the 2011 Nonprofit Almanac produced by the Urban Institute. On top of that, of course, is the fact that even for relatively small nonprofits, budgets are complex patchworks of revenue sources.

In this Memphis Daily News article, headlined “Donations up Nationwide But Local Nonprofits Still Struggle,” the Blackbaud statistics are placed in context via a report produced by the Alliance for Nonprofit Excellence, a local capacity-building organization that NPQ knows well. This year’s report, “Downstream & In Demand III: Another Look at Mid-South Nonprofits and the Economic Crisis,” found, among other things, that sixty percent of “downstream” respondents had lost a major funding source in 2011, and 50 percent said funding from a longtime source had been reduced. The largest funding cuts came from United Way and federal government programs.

While we do not argue with the statistics advanced by Blackbaud, the bigger picture is still quite harsh, especially for small groups. –Ruth McCambridge