For Immediate Release December 16, 2005

For More Information Contact: Adriene Davis, 317-278-8972 adrldavi@iupui.edu

Nonprofit Fundraisers Split on Whether Hurricane Relief Hurting Non-Relief Charities

INDIANAPOLIS - Fundraisers for nonprofit organizations expressed differing views on the possible effect that charitable giving for Gulf Coast hurricane relief may be having on short-term fundraising for other charities, according to the Center on Philanthropy at Indiana University 's latest Philanthropic Giving Index released today.

The semiannual national survey found striking differences between what fundraisers said they were experiencing at their own organizations and how they perceived that nonprofits in general were faring.

Only one third (32.7 percent) of respondents agreed or strongly agreed that hurricane relief giving came at the expense of giving to their own organization; slightly more (36.5 percent) disagreed or strongly disagreed and 30.8 percent were neutral. But when asked about the impact on nonprofits in general, a majority (58.1 percent) agreed or strongly agreed that, in general, disaster-related giving came at the expense of other charities in the short-term, while nearly one-fourth (23.6 percent) disagreed or strongly disagreed.

Center on Philanthropy experts said there could be several possible reasons for the difference in perception between what is happening at the respondents' own organizations and how they believe other parts of the nonprofit sector are being affected.

"It is certainly possible that any effects may be felt unevenly across the nonprofit sector, with some organizations being more directly affected," said Patrick Rooney, the Center's director of research. "There may also be an element of self-fulfilling prophecy. Based on anecdotal reports and widespread speculation about 'donor fatigue,' some fundraisers may assume that other nonprofits are feeling the impact of donors' decisions to support hurricane relief, even if their own organization is not affected."

Fundraisers were more united in their belief that any effects are not likely to last long. Just under half (45.7 percent) said that, in general, giving related to the Gulf Coast hurricanes will not come at the expense of other nonprofits six months from now, with a quarter (25.2 percent) saying the negative effect would linger. Nearly half (49.4 percent) also said that disaster-related giving would not still be at the expense of their own organization in six months, with only 13.8 percent predicting that it would.

Overall, fundraisers said that the climate for giving has improved since the summer of 2005, although it is still slightly below where it was at this time last year.

"The good news is that fundraisers say that the current fundraising situation is better than it was six months ago," said Gene Tempel, executive director of the Center on Philanthropy. "This is remarkable, given the devastation from hurricanes Katrina, Rita and Wilma, widespread predictions that 'donor fatigue' would hurt nonprofits' fundraising, and the economic uncertainty created by the hurricanes and high gas prices."

The PGI is similar to a Consumer Confidence Index for charitable giving. The report includes three indexes, on a scale from 0 to 100, based on the survey data: the Present Situation Index gauging the current giving environment, an Expectations Index assessing the climate for the next six months and the overall PGI that is an average of the current and future climates. Higher scores indicate more positive or optimistic attitudes about the climate for fundraising. In the latest survey, the Present Situation was 84.9 (+3.3 percent from Summer 2005) and the Expectations Index was 87.6 (-0.6 percent from Summer 2005). The overall PGI was at 86.3, up 1.3 percent from the summer.

All three indexes were down about four percent from where they were one year ago, indicating that fundraisers' views about the climate for fundraising have not yet fully recovered from a drop seen between the December 2004 and Summer 2005 surveys. The survey was conducted before the release of the Conference Board's latest Consumer Confidence Index, which was up sharply.

Human services fundraisers were significantly less optimistic than the rest of the group surveyed about the overall fundraising climate, averaging an overall PGI rating of 70.4, compared with an average of 86.3 for the entire group surveyed.

"Human services organizations, such as food banks and homeless shelters, are often among the first nonprofits to be affected and among the last to recover when economic and other factors impact fundraising," said Timothy L. Seiler, director of public service and The Fund Raising School at the Center. "They often face increasing demand for their services just as fundraising is becoming more difficult. Many operate on a shoestring and rely on a large pool of smaller donations from people who can least afford to give."

The full PGI report, including information broken out by size, donor base, and subsector (e.g., arts, education, environment, etc.) is available at http://www.philanthropy.iupui.edu/PGI-December2005.pdf.

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 November, was mailed to 512 nonprofit development executives and fundraising consultants. Of those, 186 fundraisers and consultants responded, for an overall response rate of 36.3 percent. The survey was sponsored in part by the Association of Fundraising Professionals and the Association for Healthcare Philanthropy. ###