August 24, 2011

Two-Thirds of Donors Plan to Cut Back on Giving This Fall

The economic turbulence could make the next few months a really tough time for charities making appeals.

A new survey reports that two out of three Americans (68 percent) say they will cut back on giving to charity in the coming months because of economic uncertainty or personal financial blows.

The study of 487 adults who donated at least $20 in the past year was conducted in mid-August by the market-research firm Campbell Rinker for Dunham+Company, a Dallas firm that advises nonprofits on fund raising and management.

"There's a bit of weakening in charitable giving," says Rick Dunham, president of the company that bears his name. "There's just a sense of uncertainty that's causing people to pull back."

That could be the sign of a long-term problem for nonprofits—many of which have barely recovered from the sharpest drops in giving in at least five decades, according to "Giving USA."

Donors said the two biggest reasons they would stop giving were personal—either their household had faced a job loss or they had encountered rising living or other personal expenses. Others said they felt general unease about the economy.

Only 17 percent of donors believe the economy will improve soon versus the 43 percent who said it will continue to slide.

The bleak economy will make it especially hard for charities to persuade new supporters to donate to their causes. Only one in five donors (22 percent) said they would consider giving to groups they have never supported before.

"It's really incumbent on charities to be proactive in keeping their donors engaged and even inspired to maintain their current level of support," Mr. Dunham says.

But a glimmer of hope exists. The survey says that 9 of 10 donors who give online will continue to make donations.  Those donors say they are more likely to cut back on other expenses than reduce their giving or eliminate it altogether.

"Online donors consistently demonstrated a more positive outlook," says Mr. Dunham. "They have a greater potential to stay engaged."

Update: A brief summary of the data is now available here.