Although this survey focused on the Oregon and South West Washington area, the results are likely applicable to non-profits across North America. Respondents were primarily executive directors and development directors representing a range of organizations and sectors across the board. The results were illuminating and provide an interesting insiders look on how nonprofits perceive to be faring during the current economic situation.

First and foremost, there was a significant amount of good news coming out of the survey, which should give nonprofits, whether in the US or Canada, reason to pause. For one thing, fundraising trends tended to be higher in 2008 than in 2007. For another, the majority of nonprofits surveyed predicted a recovery time of two years or less. And many organizations said they were looking to the economic downturn as an opportune time to reconnect with their mission, re-align their strategic vision, establish new partnerships and introduce a higher level of creativity into their overall approach. What’s more, many have witnessed an increase in the use of their services and are planning to expand their offerings in the coming year.

Interestingly, however, the organizations who claim to be doing well aren’t boasting the largest budgets or the most effective fundraising efforts in 2008, but they do share some of the following criteria:

• A diversified revenue stream.
• An engaged leadership—including executive, development/fundraising and board— ready, willing and able to take on any new challenges that lie ahead.
• Greater efforts at relationship-building and donor outreach.
• Emphasis on development staff or resources.
• They are proactive, always looking for ways to improve and increase their planning and their efforts.

On the downside, however, the survey found that, for those organizations who witnessed a decline in their fundraising dollars, most attributed it to the economy. Many nonprofits also approached the new year with short-term solutions to the current situation. Those who predicted longer recovery times, cited organizational problems (e.g. leadership) or lack of development/fundraising efforts as the main culprits.

But, in line with the above, and contrary to what many would believe, the organizations who claim not to be doing well are not necessarily those with the smallest budgets or staff. Nor are they the ones decrying 2008 an abysmal year for fundraising.

Yet, they all seem to have a few things in common, such as:

Problems with leadership or board.

In late January 2009, a study authored by Retriever Development Counsel LLC, was conducted in the US, assessing the impact of the economy on the fundraising efforts of over 180 organizations. The survey was conducted in partnership with Nonprofit Association of Oregon, Grantmakers of Oregon and Southwest Washington, Oregon and SW Washington Chapter of the Association of Fundraising Professionals, Meyer Memorial Trust.

Although this survey focused on the Oregon and South West Washington area, the results are likely applicable to non-profits across North America. Respondents were primarily executive directors and development directors representing a range of organizations and sectors across the board. The results were illuminating and provide an interesting insiders look on how nonprofits perceive to be faring during the current economic situation.

First and foremost, there was a significant amount of good news coming out of the survey, which should give nonprofits, whether in the US or Canada, reason to pause. For one thing, fundraising trends tended to be higher in 2008 than in 2007. For another, the majority of nonprofits surveyed predicted a recovery time of two years or less. And many organizations said they were looking to the economic downturn as an opportune time to reconnect with their mission, re-align their strategic vision, establish new partnerships and introduce a higher level of creativity into their overall approach. What’s more, many have witnessed an increase in the use of their services and are planning to expand their offerings in the coming year.

Interestingly, however, the organizations who claim to be doing well aren’t boasting the largest budgets or the most effective fundraising efforts in 2008, but they do share some of the following criteria:

• A diversified revenue stream.
• An engaged leadership—including executive, development/fundraising and board— ready, willing and able to take on any new challenges that lie ahead.
• Greater efforts at relationship-building and donor outreach.
• Emphasis on development staff or resources.
• They are proactive, always looking for ways to improve and increase their planning and their efforts.

On the downside, however, the survey found that, for those organizations who witnessed a decline in their fundraising dollars, most attributed it to the economy. Many nonprofits also approached the new year with short-term solutions to the current situation. Those who predicted longer recovery times, cited organizational problems (e.g. leadership) or lack of development/fundraising efforts as the main culprits.

But, in line with the above, and contrary to what many would believe, the organizations who claim not to be doing well are not necessarily those with the smallest budgets or staff. Nor are they the ones decrying 2008 an abysmal year for fundraising.

Yet, they all seem to have a few things in common, such as:

• Problems with leadership or board.
• Reactive as opposed to proactive strategies.
• Little donor stewardship.
• Lack of fundraising efforts.

Another intriguing tidbit is that, overall, nonprofits surveyed said they experienced higher fundraising results in 2008. To what did they attribute the increase? By and large, the answer was simple: a greater focus on the “ask”. Likewise, in order to achieve their 2009 revenue goals, donor stewardship was deemed the top priority, followed by foundation grants and major gifts. It should come as no surprise then that when asked about their priorities for 2009, 81% stated it would be communicating with donors.

Some other noteworthy takeaways from the report include:

• A large percentage of respondents (77%) anticipate recovery in two years or less.
• The impact of the economic crisis appears to vary among nonprofits, with some experiencing greater consequences and others a lot less.
• Nonprofits who appear to be faring better in the economic climate are, by and large, the ones who promote diverse revenue streams and effective management.
• Development activities, particularly individual donor relations, seem to underlie the approach of the more successful organizations.
• Board members need to increase their level of involvement and engagement.
• Non-profit leaders need to take a greater role in communicating the organization’s goals, decisions and vision moving forward.
• A greater focus on internal communication within the organization is necessary.
• Sometimes an organization’s perception of how well they are faring does not reflect the realities of the situation.

Unquestionably, like our neighbours to the south, Canadian nonprofits will feel the effects of the economic downturn and core funding/fundraising efforts will be impacted. But as the survey and its report demonstrates, even in these harder times, a proactive strategy is the key to resilience. Strong leadership, scenario planning, restructuring, donor stewardship, diversity and creativity are just a few of many priorities that can mean the difference between funding and fundraising highs and lows.

• Reactive as opposed to proactive strategies.
• Little donor stewardship.
• Lack of fundraising efforts.

Another intriguing tidbit is that, overall, nonprofits surveyed said they experienced higher fundraising results in 2008. To what did they attribute the increase? By and large, the answer was simple: a greater focus on the “ask”. Likewise, in order to achieve their 2009 revenue goals, donor stewardship was deemed the top priority, followed by foundation grants and major gifts. It should come as no surprise then that when asked about their priorities for 2009, 81% stated it would be communicating with donors.

Some other noteworthy takeaways from the report include:

• A large percentage of respondents (77%) anticipate recovery in two years or less.
• The impact of the economic crisis appears to vary among nonprofits, with some experiencing greater consequences and others a lot less.
• Nonprofits who appear to be faring better in the economic climate are, by and large, the ones who promote diverse revenue streams and effective management.
• Development activities, particularly individual donor relations, seem to underlie the approach of the more successful organizations.
• Board members need to increase their level of involvement and engagement.
• Non-profit leaders need to take a greater role in communicating the organization’s goals, decisions and vision moving forward.
• A greater focus on internal communication within the organization is necessary.
• Sometimes an organization’s perception of how well they are faring does not reflect the realities of the situation.

Unquestionably, like our neighbours to the south, Canadian nonprofits will feel the effects of the economic downturn and core funding/fundraising efforts will be impacted. But as the survey and its report demonstrates, even in these harder times, a proactive strategy is the key to resilience. Strong leadership, scenario planning, restructuring, donor stewardship, diversity and creativity are just a few of many priorities that can mean the difference between funding and fundraising highs and lows.

Key findings from this report:

• Non-Profit organizations in Ontario are concerned about the potential impact of the recession on the organizations they lead,
• Approximately one-third of the organizations were already experiencing serious economic impacts and there is fear that the recession will get worse,
• A number of community and social service organizations are realizing an increase in the demand for their services,
• Stock market declines have impacted the value of endowment funds
• A number of corporate donors and sponsors are frequently not renewing sponsorship/grants

However, Ontario’s non-profit sector is working to develop survival strategies, says Robin Cardozo, CEO of the Ontario Trillium Foundation.

These strategies include:

• sharing best practices,
• looking for new ways to collaborate
• looking for new ways to diversify funding and fundraising
• engaging funders in ways to have greater impact with fewer dollars
• reducing costs

The non-profit sector in Ontario is enriched by this research and as such, I would like to congratulate the Ontario Trillium Foundation for deciding to conduct this research, having this important dialogue with non-profit organizations, and sharing this research with the non-profit sector.

For more details and information on this report please read the full report -"Challenges and Opportunities for Ontario’s Not-for-Profit Sector During Tough Economic Times" – on the Ontario Trillium Foundation website.

Also, as ReStructure is developing a similar conference to be held in May in Toronto (see http://www.therestructureconference.com/), I wanted to visit the sessions, see the information presented, and more importantly, assess how the participants responded to the information provided in the workshops. Information about the recession and what funders and leaders have to say about it…

- Non-profits in the Bay area of San Francisco, and across the US, are being hit hard. Unfortunately, the panellists and attendees agreed that as bad as it is currently, that things are likely going to get worse in 2010 for American NPOs, specifically those who are dependent on a limited number of revenue sources.

Although I do not like to provide information that provokes hysteria unnecessarily – this information is not scaremongering, this is why: governments in the US will be drawing on less tax revenue, due to declining property taxes due to the foreclosure crisis and due to declining sales tax revenue as a impact of the layoffs (people are buying less) – this tax revenue finances community programs and other NPO initiatives, and so NPOs should prepare themselves for less government funding.

How much less is still unclear, but NPOs should not ignore this warning sign and start to develop and implement strategies that will stem this tide.

Government representatives openly shared information on how bad the economic situation is, the expected county and state deficits, and warned NPOs that cuts are likely. Their participation in this event is a wonderful sign of collaboration, transparency and accountability. In addition, it is also a good sign of further collaboration between NPOs and funders to work together to brainstorm on effective ways to protect the sector.

My thoughts…

While the situation is Canada is not as dire as that in the states, Canada (as we now know by the number of layoffs already announced), is not immune to the recession. In addition, as Canada has traditionally lagged 12 – 18 months behind the US in realizing the full impact of a recession centered in the US, and as diminished revenue from taxes impact government this year – it is likely that both Canadian and American non-profit organizations will experience difficult times in 2010.

Funders and leaders of non-profit organizations should keep updated on the economic impact on government, foundations and individuals and work with together throughout this journey to collaborate on more resilient funding and operating models that will seek to support and protect non-profit organizations at this time AND use this opportunity to leverage change to fortify the sector in the long-term.

Current program specific funding models, funding requirements and government legislation to limit necessary operating infrastructure need to be given a hard, serious and look, and changes must be made that understand the basic principles of organizational resiliency and enhance the value that the NPO provides this country.

It’s time to look at measures that are based on outcomes and impact – isn’t that what our sector is all about? Yes, it is – so, let’s work on this together to align the sector’s purpose with its reality, and the reality of what it takes to operate a social business. All too often non-profits are assessed against administrative ratios that have nothing to do with effectiveness and that minimize an already fragile and stressed operating model.

True measures of effectiveness as well as funding and operating models that are based on the short and long-term resiliency of the sector are required to protect the NPOs ability to further contribute to a healthy, socially just and democratic society – it’s in all of our best interest.

Funders in the US appear to be responding relatively well to the current economic crisis in the US. Their participation in this forum is one sign as is the research reports highlighted in my blog of March 10th demonstrate that (scroll down).

Stay tuned for my blog update tomorrow where I provide you with some of the tips, strategies and resources provided during the Nonprofit Forum, and some of the strategies and tips that I have used in restructuring organizations as well.

If you are looking for some information and strategies on restructuring, and can’t wait until tomorrow, check out the articles provided in the restructuring sections in the http://www.nonprofitrecessionwatch.com/blog.

As a final note – I just wanted to thank CompassPoint for coordinating this day. The forum was well attended and well coordinated – kudos to all who participated in its development.

Betty

1. research (studies, polls, surveys) on the impact of the recession on the non-profit sector, and

2. research on the perceptions of non-profit leaders regarding the potential impact that the recession will have on the non-profit sector this year.

If you are aware of any research, please share!