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Home > Research Articles > Fundraisers more upbeat. Philanthropy index says climate for charity improving.

Philanthropy Journal

Sunday, July 21, 2002

Fundraisers more upbeat. Philanthropy index says climate for charity improving.

With the U.S. economy recovering and the impact on giving of the Sept. 11 attacks receding, the mood of charitable fundraisers is on the upswing but still lagging their optimism of a year ago, a new report says.

Fundraisers expect giving to continue to improve in the next six months and believe the impact of giving to Sept. 11 relief, after initially dampening giving to other causes, is declining, says the Summer 2000 edition of the Philanthropic Giving Index by the Center for Philanthropy at Indiana University.

The index, which twice a year assesses the climate for philanthropic giving and fundraising by surveying nonprofit development executives and fundraising consultants, finds fundraisers "notably more optimistic in their attitudes about the climate for philanthropy in the U.S. currently than they were six months ago but less optimistic than they were one year ago."

They also "predict that the climate will continue to improve in the next six months," the report says.

The index, akin to a "consumer confidence index," consists of three separate indexes assessing the overall climate for fundraising, the current climate and the climate in the next six months.

The overall economy grew 5.6 percent in the first three months of 2002, adjusted for inflation and averaged on an annual basis, the index says, adding that economic data suggest the 2001 recession ended in the fourth quarter of 2001 and the recovery began in the first quarter of 2001.

Based on previous research, the report says, giving on average and adjusted for inflation tends to fall roughly 1 percent a year during a recession, and tends to grow roughly 4 percent a year after a recession.

Other research shows that giving is "strongly driven by changes in the economy, and the change from a recession to the beginning of a recovery is an important indicator in the giving barometer," the report says.

Predictions that the recovery will be relatively mild, the report says, may be limiting enthusiasm about fundraising and help explain why the index that assesses the current charitable climate is down 7 points from a year ago.

The report also says that major gifts are the most successful solicitation technique, while phone solicitation, corporate gifts and email and Internet fundraising are less successful.

In six months, the report says, major gifts, planned giving and foundation grants will continue to be the most successful techniques, although it says fundraisers believe all of the fundraising techniques assessed by the index will be as successful or more successful in six months than they are now.

The success of email and Internet fundraising has remained relatively flat for the past two years, although both fell sharply in December 2000.

In the most recent survey, fundraisers "were not particularly enthusiastic about either email or Internet fundraising, despite the success of the Internet in generated gifts related to the September 11 tragedy," the report says.

It suggests that while many people in nonprofit world "are enthusiastic about the possibility of Internet and email fundraising, the reality has not matched expectations so far."

Fundraisers are reporting less success with planned giving than they did six months ago, the report says, but planning giving still is the most successful fundraising technique. Other successful techniques include foundation grants, special events and direct mail.