A new report from the Center for Effective Philanthropy highlights the perspectives of nonprofits on a range of issues currently affecting the funding landscape.
Based on a survey of more than four hundred nonprofit CEOs whose organizations received at least one grant between 2015 and 2017 from foundations that give $5 million or more annually, the report, The Funding Landscape: Nonprofit Perspectives on Current Issues in Philanthropy (14 pages, PDF), found that 58 percent of respondents believed the 2017 Tax Cuts and Jobs Act was responsible for a drop in giving to their organizations, while 39 percent believed it has had no impact and 3 percent believed it resulted in an increase in giving.
The survey also found respondents’ expectations for their organizations’ overall revenue totals were mixed, with 23 percent anticipating lower revenues in the current fiscal year and 16 percent anticipating lower revenues in the next fiscal year; 31 percent and 34 percent expecting no change; and 46 percent and 50 percent projecting higher revenues.
According to the report, nonprofit CEOs who anticipate a drop in revenue attributed their lower expectations to declines in individual giving, government funding, and/or contributed revenue, while those who anticipate higher revenues cited their organization’s sharpened focus on fundraising and boosting earned income. When asked what steps their organizations would need to take if overall revenue were to decline in the next fiscal year, respondents were most likely to say reduce programs or services (46 percent), freeze hiring (44 percent), freeze wages (43 percent), and lay off staff (30 percent).
Similarly, 90 percent of nonprofit CEOs expressed concern about the impact of a potential recession on their organizations, with 64 percent saying a recession would increase demand for their programs and services, while only 33 percent said they had a plan for how they would handle a recession scenario and 38 percent of those saying they could tap a reserve fund. Just 4 percent of respondents said their foundation funders had discussed with them how a recession might affect their support for the nonprofit, while 89 percent of those who had not had discussions with their funders said they would like to.
In addition, the survey found that 89 percent of respondents said their nonprofits had received funding from a donor-advised fund in the previous three years — with most of those funds administered by a community foundation (92 percent). The most commonly cited advantage of DAFs, according to survey respondents, was that they impose less of an administrative burden on the nonprofit (22 percent), while the most commonly cited disadvantage was that they hamper nonprofits’ ability to build a personal relationship with donors.
With respect to policies governing whether to accept or decline a gift from a donor, 55 percent of respondents said their nonprofit had such a policy in place, while 39 percent said their organization had declined a gift in the past — with about 25 percent of them saying the gift would have been a liability or hard to liquidate, and another 25 percent saying the donor’s mission or values conflicted with the organization’s mission or values.
“While nonprofit leaders’ perspectives on these topics are of course diverse and varied,” wrote Kate Gehling, one of the report’s authors, in a blog post, “we hope that the data in this report can form the basis of discussions in philanthropy that are more greatly informed by the nonprofit experience.”