Economy has Greater Impact on Smaller Non-Profits

19 Dec

The struggling economy has handicapped non-profit organizations across the board in 2011, but there is a new study out that reveals how smaller charities have felt the bite of cutbacks more than their larger counterparts. Why do smaller groups suffer more and what can they do to strengthen their fundraising numbers?

Rick Cohen writes in The Non-Profit Quarterly about a new study that was conducted by GuideStar pertaining to how 875 respondents faired in 2011 and what they plan to do in 2012. Although GuideStar doesn’t claim to have a proper sampling of the non-profit population or an adequate parallel of specific organizations from 2010 to 2011, their findings are still interesting food for thought.

The study reports that:

  • A little over one-fourth of respondents reported declining foundation support in 2011, and just under another third said that their foundation support in 2011 has been “flat”;
  • Just about one-third of “smaller” charities (defined as expenditures below $3 million) reported declines in fundraising in 2011 compared to 2010, roughly twice the proportion of large nonprofits;
  • Smaller nonprofits showed more signs of fundraising and overall fiscal distress, including greater likelihood of losing new or renewing donors, low cash reserves, and overreliance on a very limited number of funders;
  • One-fifth of the smallest groups in the survey (expenditures below $250,000) said they were at risk of closing in 2012 compared to only 5 percent of respondents with larger expenditures;
  • Over half of respondents with government funding suffered from government cutbacks while only 16 percent reported that their government funding increased.

The numbers are thought provoking but the overall results are not. The big fish in the fundraising sea have obviously more money to invest in larger campaigns, more staff for outreach purposes and the ability to garner more media attention. They also can higher experts to analyze and create their fundraising strategies and they probably have a board of financial gurus.

How can these smaller charities compete for donors and their resources? Once again social media can be the best tool for these ailing groups. With minimal financial investment and with a knack for creativity, social media can link micro-charities to a larger group of current and potential donors. I’ve noticed a huge trend in the non-profit world in which groups create huge fundraising campaigns using just social media resources such as “A Day to Donate” or “One Week to Raise $250,000.” Now these are my samples, but countless groups have been successful posting similar propositions. It’s never too late to connect to more supporters and social media is the most efficient and profitable way to do so.

Let Fundly help you use this great resource today!


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