INDIANAPOLIS-Fundraisers are less optimistic about the charitable giving climate now than they were earlier this year or even shortly after the September 11 tragedies, according to the latest Philanthropic Giving Index (PGI) released today by the Center on Philanthropy at Indiana University.
"These are difficult times for nonprofit organizations as they try to build support for their programs," said Eugene R. Tempel, executive director of the Center on Philanthropy. "This new survey is in keeping with some of the anecdotal evidence we have heard in recent months indicating that many fundraisers are having to work harder to raise the same amount of money as last year."
The views of the development professionals who took part in the survey are the least positive since the inception of the semiannual PGI in Summer 1998. The overall index dropped nearly 13 percent from Summer 2002 and decreased 7 percent from the December 2001 survey taken just after the September 11 terrorist attacks. The 13-percent decline reversed a 6-percent gain reported between the December 2001 and Summer 2002 surveys. Fundraisers' impressions likely were shaped by continuing uncertainty in the general U.S. economy.
"These results indicate how important the state of the economy is for charitable giving," said Patrick M. Rooney, an economist who is director of research at the Center on Philanthropy. "Our previous research shows that in past years changes in the year-end value of the stock market and changes in personal income have been the two best predictors of giving."
The Philanthropic Giving Index is similar to a Consumer Confidence Index for charitable giving. The report includes three indexes created from the survey data: the overall PGI, a Present Situation Index gauging the current giving environment, and an Expectations Index assessing the climate for the next six months.
All three indexes are at the lowest levels and fell by the largest percentage changes seen in the five-year history of the PGI. The Present Situation Index dropped 17 percent from the summer level and is down almost 12 percent from one year ago.
Center officials noted that while the differences are significant, it is not known how these findings would compare to previous periods of economic instability because the PGI was initiated during a boom in both philanthropy and the economy. They also emphasized that the survey measures fundraisers' perceptions of the climate for charitable giving, rather than actual dollar amounts raised.
Despite their views of the current environment, the senior development officers surveyed are optimistic that fundraising conditions will improve six months from now. In fact, the gap between views on the current situation and predictions for the future is the widest it has ever been. Respondents also express positive attitudes about current and future internal support for fundraising within their organizations.
The PGI is on a scale of 0 to 100. Higher scores indicate more positive or optimistic attitudes about the climate for fundraising. The overall Philanthropic Giving Index is 78 for December 2002, compared to 89 in Summer 2002 and 84 in December 2001. The Present Situation Index is 70, down from 84 in Summer 2002 and from 79 last December. The Expectations Index is 86, declining from 94 in the summer and 88 at this time last year.
Fundraisers for health and religion organizations are more optimistic about both the present and future giving environment than were their peers from other types of nonprofits. Public benefit, environmental, animal and international organizations' fundraisers were the least optimistic about both the current situation and the next six months.
In results comparing the effectiveness of various fundraising techniques, the reported success with obtaining corporate and foundation gifts is notably lower in the December 2002 PGI than in the preceding survey. In the Summer 2002 survey, 64 percent of respondents reported success with foundation grants, while 52 percent did so in the latest survey. A dip in success with corporate gifts was also reported, declining from 48 percent last summer to 38 percent in December. Solicitation of major gifts has been reported as the most consistently successful technique over time in the PGI surveys and is among the techniques favored in the latest results, but fundraisers reported less success with major gifts in this round than in previous surveys.
PGI survey participants are chosen to represent a cross-section of nonprofits nationwide in terms of geographic region, annual revenue size, and type of organization. The survey, which was conducted in October, was mailed to 395 development executives of nonprofit organizations and 42 fundraising consultants. Of those, 144 fundraisers and 21 consultants responded, for an overall response rate of 38 percent.
The December 2002 Philanthropic Giving Index survey was sponsored in part by the Association of Fundraising Professionals and the Association for Healthcare Philanthropy.
The Center on Philanthropy at Indiana University is a leading academic center dedicated to increasing the understanding of philanthropy and improving its practice through research, teaching, public service and public affairs programs in philanthropy, fundraising, and management of nonprofit organizations.
The full PGI report is available at www.philanthropy.iupui.edu/PGI-Dec2002.pdf
To schedule an interview or for additional information, contact Adriene Davis at (317) 236-4912 or Ty Gerig at (317) 684-8906.
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