Recession hits nation’s biggest charities: Bigger is not always better

By Jennifer Johnson, JVA Consulting

Over the weekend the Chronicle of Philanthropy released a report showing that the nation’s largest, and therefore considered the most successful nonprofit organizations saw an 11% drop in donations in 2009; several groups in the top 10 had drops in much larger numbers. Charities like United Way and Salvation Army saw declines between 4% and 8%, with Fidelity Charitable Gift Fund falling by an eye-popping 40%. This drop is directly related to the poor performance of the stock market. Charities dependent upon in-kind goods, like Feed the Children and World Vision, fared better and actually saw increases in 2009. Overall charitable giving in the U.S. declined by 3.6% in 2009, so why would the nation’s best fundraising organizations see much larger drops?

My theory is that many donors are deciding to give to organizations closer to home. We know that today’s donors want to be personally involved with an organization, so rather than give to a large national organization, they may choose to give to a smaller, local organization addressing similar issues. Donor stewardship has become critical to donor retention, so in this case, the small local nonprofit has the advantage over the nation’s top 400 charities. If you have ever received a handwritten thank you note from a charitable organization, you know how special that is and large, national groups don’t have the ability to respond with such personalized responses to entry level donors. I truly believe that nonprofit organizations with a good donor stewardship plan can be the ones that raise more money by truly engaging their donors of all levels in a significant way.

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