Inflation seems to be easing, and the stock market is tentatively climbing upward, but for nonprofits struggling to serve their clients and meet fundraising goals during the year’s biggest push, the economic outlook is far from clear. In the face of such uncertainty, many have been able to rely on connections with longstanding donors to weather an unsettled economy.
“This is essentially our Super Bowl,” says John Haehn, social-media manager at Toys for Tots, of the holiday giving season. Thanks to corporate sponsors like Disney and Hasbro, the 75-year-old nonprofit has been able to stay on track this year to match the 22.6 million toys distributed last year to 8.7 million children across the United States.
The nonprofit also benefits from decades-long relationships with supporters, many of whom have continued to give consistently in the face of economic hardship, says Haehn.
“I was a recipient when I was younger, and being able to give back as an adult, you know that it’s going to have a long-lasting impact on a child,” he says.
Here’s a closer look at some of the economic data experts say nonprofit officials should be watching.
Consumer Sentiment
Consumer confidence dropped 5 percent in November from the previous month, as measured by the University of Michigan Index of Consumer Sentiment.
The Salvation Army, whose red-kettle campaigns have long been an icon of the holiday giving season, has struggled to attract as much giving as usual this year, says Dale Bannon, national community relations and development secretary at the charity.
Some local Salvation Army locations have reported declines in gifts of more than 10 percent, says Bannon. Because consumers are less optimistic, they are shopping less and are therefore less likely to frequent the businesses where Salvation Army volunteers tend to raise money.
“As people have less cash and consumer confidence, they might shop less than last year,” says Bannon. “That means likely less foot traffic for those red kettles.”
Inflation
The rate of inflation, which reached historic heights this year, finally cooled somewhat, registering 7.1 percent in November, an encouraging sign as the Federal Reserve aims to quell rapid price increases.
The price crunch brought on by inflation has put a strain on many human-service nonprofits in recent months, says Bannon.
“It’s costing more to serve individuals and families in need,” he says, citing higher food prices and utility costs.
Still, the national group has managed to maintain relatively high levels of giving through digital campaigns and a matching-gift program with Sam’s Club, in which the company doubled the first $1 million in donations given to the nonprofit this GivingTuesday.
S&P 500
The stock market is still underwater for the year but has been showing signs of life. One benchmark equities index, the S&P 500, ended the month up 5.4 percent after the Federal Reserve officials signaled it would ease the pace of increasing rates aimed at reducing inflation. However, the stock market showed further signs of volatility today after the Federal Reserve indicated that it would move forward with additional rate increases in the coming year.
Unemployment Rate
Unemployment remained at 3.7 percent in November, the same as the previous month, which still puts it in historically low territory. Nonprofits have been struggling to fill positions for months, though there are some tentative signs that the job market is cooling, says Ami Dar, founder of the nonprofit job board Idealist.org.
"[Job] postings are slowing down, but it’s always slower in November and December,” says Dar, who cautioned that it will likely take several months to gauge whether hiring has truly slowed.
After an initial drop in jobs in 2020, the number of nonprofits seeking employees roughly doubled in 2021, says Dar. That number has remained high throughout 2022, with the ability to work remotely continuing to be a major draw for job seekers across the country.
“People really seem to enjoy working at home and would like to continue doing that,” he says. “Employers that offer that will do much better than those who do not.”
