INDIANAPOLIS—Nonprofits say charitable giving prospects are good this holiday season, according to the Philanthropic Giving Index (PGI) released today by the Center on Philanthropy at Indiana University.
Fundraisers surveyed for the study also said that donor advised funds are among several increasingly successful planned giving tools used by their organizations.
The PGI, similar to a Consumer Confidence Index for charitable giving, includes three indexes on a scale from 0 to 100, based on a semiannual national survey of nonprofit fundraising professionals. The Present Situation Index gauges the current giving environment. The Expectations Index assesses the climate for the next six months, and the overall PGI is an average of the current and future indexes. Higher scores indicate more positive or optimistic attitudes about the climate for fundraising.
In the latest survey, fundraisers reported a fairly stable fundraising climate with an overall PGI of 88.8, an increase of 1.5 percent from both six months and one year ago. The Present Situation Index was 88.0, an increase of 3 percent since Summer 2007 and up 2.5 percent from this time last year. The Expectations Index, at 89.7, remained virtually unchanged from six months and one year ago. In the 10 years since the study began, the overall PGI has ranged from a low of 72.3 in Summer 2003 to a high of 94.6 in December 1999.
Health care fundraisers were much more optimistic about the fundraising climate than their peers at other types of nonprofits; the PGI for that subsector reached an all-time high of 95.2, a 4 percent increase from the summer and up 8.1 percent from a year ago.
Outside fundraising consultants who serve nonprofits, historically among the most positive respondents in the PGI, were noticeably less optimistic than other fundraisers, lagging their peers by four to six points in each of the three indexes. Human services, public benefit, environment/animal and international nonprofits’ fundraisers were also notably less optimistic about the current and future climates, rating the Present Situation Index at 79, 9 points lower than the average for all respondents.
“Prior research shows that human services nonprofits are among the first to see an increased demand for services when the economy slows,” said Eugene R. Tempel, Executive Director of the Center on Philanthropy. “In those circumstances, such organizations often also face declining financial support from households, foundations, and corporations. Even though the economy is not in a recession, uncertain economic conditions may be of particular concern for these organizations.”
Despite the overall optimism shown in the indexes, 48 percent of survey participants said that the economy is having a negative effect on fundraising, compared to 28.3 percent who said its effect is positive. Almost 47 percent predicted that the economy’s impact on fundraising will be negative six months from now, with 28.9 percent saying it will be positive. More than 70 percent of consultants reported a negative impact now, while 29.2 percent saw a positive impact on fundraising currently.
“Although these figures may seem to conflict with the positive results in the current and future indexes, they may indicate that fundraisers are guarded about certain economic indicators but may not currently be seeing negative effects on giving to organizations like their own,” said Patrick M. Rooney, Director of Research for the Center on Philanthropy.
“These results could reflect the recent decline in the Consumer Confidence Index; experience shows that the PGI closely follows changes in the CCI,” Rooney added. “Fundraisers also are concerned about weakening credit and housing markets and the volatility of the stock market and wonder whether these may affect charitable giving.”
In the latest survey, fundraisers also were asked about specific aspects of planned giving. The reported success of planned giving overall compared to other fundraising techniques has varied widely in past rounds of the PGI. In the December 2007 survey, it trended up slightly, but fundraisers noted significant increases in the success of certain planned giving instruments.
Since Summer 2004, when the PGI first asked about planned giving tools, the percentage of fundraisers reporting success with donor advised funds has grown from 32.5 percent to 52.8 percent. The percentage of fundraisers reporting success with insurance policies grew from 21.1 percent in 2004 to 29.4 percent in 2007. The share of fundraisers reporting success with trusts increased from 48.6 percent in 2004 to 57.2 percent in 2007. In both years, more than three-quarters of fundraisers said charitable bequests are the most successful planned giving instrument.
“These increases reflect increased attention to planned giving and industry-wide promotion of planned giving instruments,” said Timothy L. Seiler, Director of Public Service and The Fund Raising School at the Center. “Financial institutions, financial advisors, nonprofit fundraisers and the growing influence of community foundations are all strengthening and promoting the attractiveness of these instruments.”
Other key findings include:
- Nearly 60 percent of fundraisers indicated that between 1 and 5 percent of their organization’s budget was spent on acquiring planned gifts. Another 15 percent of fundraisers said they spend between 6 and 15 percent of their budgets on acquiring planned gifts.
- Almost half of all fundraisers (47 percent) reported no impact on their fundraising due to the federal IRA charitable rollover provision.
- Public benefit, environment/animal, and international nonprofits reported statistically significantly less success with bequest commitments than their peers.
- Overall, 39.7 percent of fundraisers reported receiving between 5 and 20 charitable bequests or notifications of intent to bequest in the last two years.
- 38.1 percent received between 5 and 20 donor-advised funds, trusts, annuities, or insurance policies in the last two years.
The full PGI report, including results by organization size, donor base and subsector (e.g., arts, environment, etc.), is available to premium services members of the Center’s Web site at
http://www.philanthropy.iupui.edu/PremiumServices/login.aspx or may be purchased at
http://www.philanthropy.iupui.edu/Products/products_research.aspx. Journalists may obtain the full report from Adriene Davis, (317) 278-8972, or Josh Sprunger at (317) 278-8932, .
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 was mailed to 409 nonprofit development executives and fundraising consultants. Of those, 152 fundraisers and consultants responded, for an overall response rate of 38.8 percent. The survey was sponsored by the Association for Healthcare Philanthropy. Survey administration and coding of data was conducted by the Center for Survey Research at Indiana University.
The Center on Philanthropy at Indiana University, a part of the Indiana University School of Liberal Arts at Indiana University-Purdue University Indianapolis, is a leading academic center dedicated to increasing the understanding of philanthropy, improving its practice, and enhancing participation in philanthropy through research, teaching, public service and public affairs programs in philanthropy, fundraising, and management of nonprofit organizations.
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