Annual Nonprofit Fundraising Study Reveals Donor Financial Uncertainty

The first quarter of the year generally results in a variety of nonprofit fundraising related research, many of which I spotlight on this blog. Most recently I have written about research like the 2013 Nonprofit Communications Trends Report, the 2012 State of The Nonprofit Industry and the Charitable Giving Report, How Nonprofit Fundraising Performed. A recently released report titled Dunham and Company Annual State of Philanthropy Study surveyed 1,000 American adults on their current financial situation and their giving plans for 2013. Last week I wrote that There is Reason for 2013 Nonprofit Fundraising Optimism According to Latest Blackbaud Index, however, based on the results of this study we should proceed with caution as these results may indicate a lack of donor confidence based on the economic climate.

• Personal Finances – Part of the research assessed respondent’s personal financial circumstances and whether they improved, stayed the same or worsened over the past year. Interestingly there were only marginal differences to results from the 2011 survey indicating relative stability as there was a 2% increase of ‘Improved’ responses and a 1% increase of ‘Worsened’ responses. Clearly households are not completely out of economic uncertainty and thereby supporters are being cautious on how they spend disposable income. Despite consistency in personal financial stability what is concerning is how households plan on making adjustments to their budgets. The research reveals that ‘Reducing charitable donations’ is the second most (35%) popular way for responding households to make budget adjustments next to ‘Reducing money spent on entertainment’ (47%).
• 2013 Giving Plans – Another area of concern the research uncovered includes respondents giving plans for 2013, as there was a decrease of 6% from 2012 results of those stating they would give ‘More than usual’ and a decrease of 10% of those that will give the ‘Same as usual’. Even more alarming is that the number of respondents stating they will give ‘Less than usual’ has more than doubled from 13% in January 2012 to 27% in January 2013. When broken down by age demographics approximately a third of age groups 45-54 and 65+ plan to decrease their giving, which has also more than doubled from 2012 results, a 20% and 18% increase respectively. Generally speaking the 45-54 age group tends to be higher income earners with more disposable income, however this same group may be tightening up their wallets in anticipation of future retirement, while the 65+ age group have already reached retirement and may be more inclined to hold on to their retirement savings for the present and immediate future.

The current results are eerily similar to those back in 2008 through 2010 during the recession and are also consistent across all U.S. regions as there was a 15% increase of respondents stating they will be giving less compared to 2012, except in the South with only 14% responding the same way.

The  Dunham and Company Annual State of Philanthropy Study concludes that donor confidence is low and notes that “while Americans feel the economy is improving, charitable giving is not likely to pick up in the coming year”. Let’s hope that this is not really the case and that more donors will have reason to feel optimistic about their financial situation and that will be reflected in their giving to the causes they care about most.

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Miratel Solutions is a Toronto call centre, eBusiness, and letter shop mail house specializing in professional fundraising services including telephone fundraising, online fundraising, lottery services, donation caging, donation processing and other donor management services. We are committed to our CSR business values in all contact centre services and mail house operations and advancing the missions of the nonprofits we proudly serve.