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Consultants in Advancement Planning, Fundraising, Marketing Communications and Executive Search

Philanthropy in Recession.

What Recession?Judy Comeau-Hart Robert AlpaughThe Alley Theatre Senior Consultant

November 11, 2008

877-957-0000 toll-free ~ www.campbellcompany.com

Stocks Plunge Again; Dow Under 8,600

msnbc

Arts institutions feeling impact of sick economy

Carnegie Hall, Getty Center, others scrambling to refinance their debt

msnbc

Arts institutions feeling impact of sick economy

Carnegie Hall, Getty Center, others scrambling to refinance their debt

Dow plunges 679 points to trade below 9,000 for the first time in 5 years in afternoon sell-off

Giving wilts at charities

Agencies eye cuts even as need climbs in slack economy

The LandscapeNovember 2008


Theaters Monitoring Wall Street Drama

For people who work in and around Broadway, as for pretty much everyone else in the country, the main stage in recent weeks has been on Wall Street…

The Landscape November 2008


The Landscape November 2008


Individuals

$229.03 74.8%

Foundations$38.52 12.6%

Bequests

$23.15 7.6%

Corporations$15.695.1%

Some Perspective 2007 - $306.39 billion ($ in

billions)


Environmentand animals

$6.962.3%

Foundations$27.73 9.1%

Humanservices$29.64 9.7%

Internationalaffairs$13.224.3%

Arts, culture, and humanities

$13.674.5%Public-society

benefit$22.657.4%

Unallocatedgiving$23.677.7%

Health $23.157.6%

Religion $102.32 33.4%

Education$43.32 14.1%

Some Perspective 2007 Types of Recipients


0

50

100

150

200

250

300

350

1967 1972 1977 1982 1987 1992 1997 2002 2007

Recessions in light green: 1969–70; 1973–75; 1980; 1981–82; 1990–91; 2001

Inflation-adjusted dollarsCurrent dollars

Total Giving - 1967–2007Showing Recessionary Years

$ in billions


Recessions occur every five to ten years on average in the United States.

Source: Giving USA Spotlight

Economic Facts

Official definition of a recession is two successive quarters with a decline in Gross Domestic Product (GDP).



Giving USA surveys from 2001 through 2007 found that in all years, 49% to 59% of charities saw growth in giving.


Economic Facts

Giving USA surveys from 2001-2007 found that even in the worst year surveyed (2002), fewer than half of charities saw a drop in total gift dollars received.



Economic Facts

Individual giving 80% of total giving dropped an average of 3.9% in the four years with eight months or more of recession.



A national poll found that donors between the ages of 25 and 34 said they were more likely to increase their charitable giving this fall.

Source: Chronicle of Philanthropy, 9/18/08

Economic Facts

The same national poll found that donors over 65 said they planned to give less or not at all.

Source: Chronicle of Philanthropy, 9/18/08


Corporate giving is about 5% of total giving.


Economic Facts

In economic growth years, corporate giving grows an average of about 3% per year.

Source: Chronicle of Philanthropy

Corporate giving fell an average of 1.6% in the four years with eight months or more of recession.



Economic Facts

Foundation giving about 10% of total giving historically fell an average of only 0.1% in the four years with eight months or more of recession.


Thirty-seven percent of foundations planned to increase grant making during 2009.

Source: Chronicle of Philanthropy, May 2008


Almost one-third of foundations say they have stepped up their giving this year to help families, provide human services, or support economic development.

Source: Chronicle of Philanthropy

Economic Facts


Worst Case Scenario?

Worst decline in philanthropy - 1973/1974

Decline was 5.4%

Drop for 2008 would result in philanthropy retrenching to 2005 levels - $289.5 billion


Individuals$216.54 74.8%

Foundations$36.47 - 12.6%

Bequests$22.00 - 7.6%

Corporations$14.76 -5.1%

Worst Case Scenario2008 Philanthropy at 2005

Level

Total - $289.5 Billion

Individuals$229.03 - 74.8%

Foundations$38.52 -12.6%

Bequests$23.15 - 7.6%

Corporations$15.69 - 5.1%


Worst Case Scenario2008 Philanthropy at 2005

LevelEnvironmentand animals$6.66 - 2.3%

Foundations$25.94 - 9.1%

Humanservices

$27.65 - 9.7%

Internationalaffairs$12.454.3%

Arts, culture, and humanities$13.03 - 4.5%

Public-society

benefit$21.42 - 7.4%

Unallocatedgiving$22.307.7%

Health $22.00 - 7.6%

Religion $96.69 - 33.4%

Education$40.19 -14.1%


733,790773,934

819,008865,096

909,574964,418

1,010,3951,045,979 1,064,191

1,128,367

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

The number of 501(c)(3) organizations, 1998–2007


Action Steps

Top Down/Inside Out Assessment of Organization

Revenue Streams

Programming

Staffing

Core Values

Importance of Mission


Action Steps

Communication

What You are Doing to Secure Operations

Importance of Donors

Importance of Mission

Recent Successes

Transparency

Honesty/Integrity


Strategies - Annual Fund

Move More Resources into Individual Giving Budget

Hire a Major Gifts Officer

Use a Wealth Screening Tool

Create a List of Major Gift Prospects

Promote Major Gift Patron Groups



Establish a Campaign Atmosphere

Ask Board of Directors to Issue a Challenge

Promote Challenge

Communicate Success



Have a two pronged approach, for example: • Major Gifts Levels

- $10,000 - $15,000- $5,000 - $9,999- $3,000 - $4,999

• Levels Below - $1,500 - $2,999- $500 - $1,499- $150 - $499



Engage Board in Cultivating and Soliciting Major Gift Prospects

Hire Two Hourly Callers to Help Cultivate Donors at Other Levels

Focus on Building Relationships

Communicate Frequently with Donors

Provide Donor Recognition That is Meaningful



Use Direct Mail for Acquisition

Use Telefunding to Follow-up with Acquisition Prospects

Use the Board Challenge as an Incentive

Use Other Incentives to Raise Minimum Giving Levels

For example: “For a minimum gift of $150 you will be invited to a Behind the Scenes Tour of the Alley



In This Economy

Throw Your Net Wider

Ask Your Board to Be More Active

Focus Where You Can Get Results

Communicate, Communicate, Communicate

Lead the Charge!


Strategies – Capital Campaigns

Planning Stage

Philanthropic Market Study Phase

Early Stages of a Campaign

Quiet Phase

Public Phase


What NOT to Do

A. Procrastinate

B. Put Your Head in the Sand

C. NOTHING


Discussion

What are you finding in your community/organization?

• Attendance?

• Earned Revenue

• Contributed Income

What are you doing to protect your organization?

What is your Board doing?

How are you planning for 2009 - 2010?

Are you going ahead with BHAGs?

How long will this last?

Other?

consultants in advancement planning, fundraising, marketing communications and executive search...

Documents

unallocated giving

usa spotlight slide

economic growth years

economic facts individual

usa surveys

economic facts foundation

economic development

recessionary years