Current Charitable Giving Picture is Similar to Last Year

INDIANAPOLIS – Nonprofit fundraisers are reporting a fairly stable fundraising climate that is slightly less positive than six months ago, but slightly more positive than one year ago, according to the Philanthropic Giving Index (PGI) released today by the Center on Philanthropy at Indiana University.

Fundraisers’ overall optimism about the climate for giving in the United States increased 1.6 percent over this time last year, but was down 1.4 percent from the Summer of 2006. Fundraisers for public benefit, environmental and international nonprofits and those working in human services organizations reported slightly less optimism than those from other types of 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 fundraisers. 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 giving.

In the latest survey, the overall PGI was 87.6, decreasing from 88.9 this past summer and up from 86.3 in December of 2005. The Present Situation Index was 85.8 (-0.9 percent from Summer 2006, and +1.1 percent from December 2005) and the Expectations Index was 89.5 (-1.9 percent from Summer 2005, and +2.2 percent over December 2005).

“Fundraisers are reporting a fairly stable giving environment,” said Patrick M. Rooney, director of research for the Center on Philanthropy. “Nearly 50 percent of fundraisers surveyed reported that the economy was having a positive impact on giving. This is probably tied to improved stock market conditions. However, about 30 percent of fundraisers said the economy was negatively impacting giving. The result likely will be a year-end giving season that is similar to last year.”

The study also asked about the new Individual Retirement Account (IRA) charitable rollover provision passed by Congress in the Pension Protection Act of 2006. The IRA charitable rollover allows people ages 70½ and older to donate up to $100,000 per year (in 2006 and 2007 only) from their traditional or Roth IRA accounts to charity without first counting it as income and paying income taxes. Nearly 88 percent of fundraisers surveyed were aware of the new IRA charitable provision and a majority of fundraisers, 58.2 percent, have a strategy for using it in their fundraising. Only 21.8 percent, however, reported success using the provision to raise charitable dollars and 33.9 percent said they are not having success.

Statistically, fundraisers from human services organizations were the least likely to know about this new type charitable giving vehicle (only 69.6 percent), to have a strategy to use this provision (26.1 percent), and to report success in raising charitable dollars with it (8.7 percent).

“The IRA charitable rollover provision is a new giving option, and it will take time for donors to become aware of it and to be comfortable using it,” said Eugene R. Tempel, executive director of the Center on Philanthropy. “Many human services organizations, especially smaller ones, have smaller, less comprehensive fundraising operations and are less likely to be connected to large umbrella groups that help the nonprofit respond quickly to new fundraising opportunities such as this one.”

The PGI survey also included questions about the impact of other regulatory provisions of the Pension Protection Act of 2006 on fundraising. These include requiring a receipt from a charity for all cash donations (even those under $250) in order to deduct the donation from income taxes; limiting deductibility of the value of clothing and household goods to those in “good or workable condition;” and requiring stringent appraisals of donations of property (land, art, collectibles, etc.) valued at more than $5,000. Overwhelmingly, survey respondents reported that these provisions are not having an impact on fundraising now (91.1 percent) and are not expected to have an impact in the next six months (82.2 percent).

Other trends reported include rising success with foundation grants and corporate giving after a decline following September 11, 2001. Fundraisers from human services organizations reported less success than those from other types of organizations with two of the most successful fundraising techniques, major gifts and planned giving. Smaller organizations tend to utilize special events to raise charitable dollars while larger organizations develop planned giving and major gift programs, which they say become their most successful sources of charitable revenue.

“The evidence shows consistently that special events continue to be effective fundraising strategies for small nonprofit organizations, and interestingly, for large health care organizations. The more personal types of fundraising, for major and planned gifts, tend to be reported as less effective for small organizations,” said Timothy L. Seiler, director of public service and The Fund Raising School at the Center on Philanthropy. “These results raise the question of whether small organizations have not been able to engage in the more personal types of fundraising, perhaps due to the small number of fundraising staff, but rely on special events and direct mail.”

The full PGI report, including results by size of organization, donor base and subsector (e.g., arts, education, environment, etc.), is available to premium services members of the Center on Philanthropy or available for purchase at www.philanthropy.iupui.edu. Media may obtain a copy by contacting Adriene Davis at 317-278-8972 or via email at adrldavi@iupui.edu.

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 403 nonprofit development executives and fundraising consultants. Of those, 168 fundraisers and consultants responded, for an overall response rate of 42 percent. The survey was sponsored in part by the Association of Fundraising Professionals and the Association for Healthcare Philanthropy.

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 philanthropic participation through research, teaching, public service and public affairs programs in philanthropy, fundraising, and management of nonprofit organizations.