A Glimmer of Hope? Survey Finds Less Fundraising Pain, But Layoffs Remain High
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As the coronavirus continues to take its deadly toll, it can be encouraging to latch onto even the tiniest scrap of good news amid the ongoing crisis. That’s certainly true in fundraising, a field that has been experiencing widespread pain and is bracing for what’s to come.
A new survey of 1,014 nonprofit officials, the second in a series, finds that fewer of their organizations are experiencing negative impacts on fundraising compared with respondents who participated in an earlier survey.
The new research, conducted by the fundraising consulting firm CCS, found that 56% of the respondents’ organizations had a fundraising decline, down from 63% in the earlier survey. And fundraising increases were reported by 23% of respondents, up from 14% in the first survey, which was conducted one month earlier.
More than 60% of the respondents reported undertaking an emergency or special appeal in the wake of the crisis, up from 53% in the earlier survey.
Asked about their confidence in different types of fundraising, respondents were most confident about foundation grants, with 73% predicting that foundation grants would remain the same or increase this year. The most frequently cited fundraising declines were predicted for special events (85%) and corporate giving (56%).
As the pandemic drags on, one worrisome finding is an increase in the percentage of respondents who experienced layoffs and furloughs among their fundraising staff. In the latest survey, 20% reported fundraising staff reductions, up from 15% in the initial study.
That fits with what Inside Philanthropy has come across in our own reporting. For example, Louisiana State University’s fundraising arm, the LSU Foundation, recently laid off 41 people, equivalent to a third of the foundation’s development team.
“This difficult decision is an outcome of unanticipated budget pressures created by COVID-19,” wrote Sara Whittaker, the foundation’s assistant vice president of communications, in an email. “The LSU Foundation needs a leaner operational structure that its refocused budget can support. These decisions are hard for any organization facing the realities of adjusting operations.”
While this latest survey offers perhaps a glimmer of hope, the ongoing layoffs and furloughs signal one of the most challenging aspects of this health crisis and economic downturn—uncertainty. The fact that there are so many unknowns ahead likely means that most nonprofits have no choice but to prepare themselves for a serious blow.
We’ve seen, for example, pessimistic forecasts specific to different corners of the fundraising world. One recent survey focused on higher ed reported that more than 40% of institutions are projecting declines of at least 10% for fiscal year 2020. More than one in five expect fundraising revenue to drop by a minimum of 20%. Projections for fiscal year 2021 show nearly 45% of institutions are anticipating double-digit declines.
One recent study conducted by SMU DataArts and TRG Arts estimates that because of the health crisis, the nonprofit arts and culture sector will lose $12.4 billion in income. The arts world is being hit particularly hard because of its reliance on earned revenue like ticket sales, and in-person fundraising events like annual galas. Organizations faring the best in these challenging times are becoming increasingly creative about how to replace such revenue streams.
