By Katy Snyder
Communications/Resource Development Associate
We’ve heard the phrases “Main Street and “Wall Street” ad nauseum in the last few weeks, from the presidential and vice presidential debates (bar-goers at Sengers on the Fax even created a bingo-based drinking game during the vice presidential debate centered around campaign buzzwords like Main Street), to New York Times editorials and the six o’clock news. While it’s been almost impossible not to hear about the effects on Wall Street (bailouts, endless days of roller-coaster rides for the Dow and European markets beginning to feel the burn), and undeniably felt on our own Main Streets (skyrocketing gas and grocery prices, layoffs, foreclosures), we are only beginning to talk about how it feels on “Nonprofit Street.”
A recent piece on NPR about skyrocketing interest rates on the bonds that nonprofits use to pay for buildings, new construction and programs alluded to what’s ahead (click here to listen). Many nonprofits will have to cut back on services to clients in order to make their growing debt payments.
Around JVA, we’ve been noticing the effects ourselves, and hearing from our clients about what the view on Nonprofit Street looks like. They are telling us that funders have less money to give and more strings attached to what they do give. They are worried about their end-of-the-year appeals. They know it’s going to be competitive out there, and that they have to show outcomes and write stronger proposals, but they are worried about spending money on an evaluation plan. At the same time, our phone has been ringing off the hook with people who want us to write grant proposals to make sure they are making the most compelling case to funders.
For direct service providers, such as homeless shelters and food banks, the down economy has brought more clients in need, and less resources to help them with. According to a recent Rocky Mountain News article, the Food Bank of the Rockies has seen demand at the food banks it supplies go up 20 to 30 percent in the past eight to nine months, but it anticipates a decline in donations.
A recent Chronicle of Philanthropy article confirms these fears, saying that all of the funding sources that nonprofits typically rely on are cutting back on giving. Individual donors, wary about their own economic futures, are pulling back or holding off on giving gifts until the economy is more certain. According to Forbes, a study by the private-wealth research firm Prince & Associates shows that 51 percent of wealthy families that have given to nonprofits in the past are planning to give less this year, 33 percent are planning to give the same, and only 16 percent are planning on giving more.
Donor-advised funds are being affected as well. According to the Chronicle of Philanthropy, “Contributions to donor-advised funds are especially influenced by tax incentives, and one of the most tax-effective ways to open an account is by donating appreciated stock.” As stock prices fall, would-be donors are less likely to get the price they want for their stocks and less likely donate them. Larger foundations are making the cut as well; the William and Flora Hewlett Foundation has announced that it will cut back on its grantmaking by three to five percent this year, with most of those cuts coming from awarding less new grants.
The news is not all bad, however. Some big foundations, such as the Robert Wood Johnson Foundation and the John D. and Catherine T. MacArthur Foundation, are staying strong and pledging to remain either at or above the level of what they gave last year. Small grantmaking foundations are trying to keep giving at the same levels they have been as well; according to the Chronicle of Philanthropy, at a recent meeting of the Association of Small Foundations, close to two-thirds of staff and board members surveyed said they intend to “hold steady or increase grant making in 2009.” The problem, however, is that more nonprofits will be applying for these grants as other funders cut funding.
Though it sounds hopeless, there are some things you can do. Here are the top recommendations from the staff at JVA:
1. Look for grants to help your organization build its capacity. These types of grants will help you build capacity through activities like creating a strategic or evaluation plan, or developing a marketing plan that will continue to make your organization more profitable and more attractive to potential funders. Check out the Technical Assistance grants offered by The Denver Foundation.
2. Have a plan. If there was ever a time to have a fund development plan for 2009 that details WHAT funding you are seeking, WHO will do the work and WHEN, it is right now. JVA can help you with this.
3. Consider a collaboration. Collaborate, form a strategic alliance or, yes, even consider a merger with another nonprofit that does work similar or complementary to your own. You will be more viable to funders if you can show that you do not duplicate services, and by sharing resources (such as office space), you can save money.
4. Look to your volunteers. As donors and volunteers cut their normal donations, ask them to make a time commitment or in-kind donation instead.
5. Call your donors, personally, now. Let them know what’s going on with your organization and what your plan is. Yes, we know you’re busy, but these calls can make a huge difference.
6. Tell JVA about it. Take a quick online survey and tell us how the economy has
affected your nonprofit. We are always looking for ways to better serve our clients and by telling us what you need, we can help you during these tough times.