Tuesday, April 14, 2009

If You Leave Me Now, You’ll Take Away the Biggest Part of Me…

Susan Semeleer, Associate Director of Communications, FasterCures

The unsettled economy is forcing nonprofits – and the donors who sustain them – to make hard decisions about disbursement of funds. The economic downturn has created more need – and diminished the giving capacity of those best able to meet that need.

An Associated Press story last month chronicled the broadside that nonprofits are expected to take as grim economic statistics mount. Couple a weak economy with shifting fiscal priorities, and the potential consequences for nonprofits are huge. Even a small minority of donors scaling back could add up to billions in lost contributions – enough to topple teetering nonprofits. Real dollars. Real consequences.

So how do charities keep their institutional heads above water when everyone is cutting back on expenses? Conversely, how can donors be assured that their contributions are being put to the best possible use? On this space a few weeks ago, my colleague Melissa Stevens drafted a post on the FasterCures Philanthropy Advisory Service. The PAS was created to fill the information vacuum caused by the lack of reliable, independent data on the efficiency and productivity of charities and nonprofits. The PAS truly is a tool for its time: a convenient, easily navigated one-stop clearinghouse of information, gleaned by using a singularly focused set of criteria: how well – and how effectively – an organization is being run and is contributing to the research community, allowing philanthropists and their advisors to make informed decisions about giving.

Americans are a generous people, even in lean times, and charitable giving in the U.S. has been largely impervious to economic downturns. This morning, NPR's Marketplace reported that "donations to charities in the millions have fallen by one-third, and the need for assistance keeps climbing. But some philanthropists use this as a call to give more in times of greatest need." Indeed, giving increased during the Great Depression. And although there have been 11 recessions since the end of World War II, only in one year has total giving actually fallen in the U.S. – 1987, the year of the Black Monday stock market crash. But, as one philanthropy expert told the AP, “This is a Darwinian moment for the nonprofit sector.” When charity becomes a question of survival of the fittest, it can be expected that many charities won’t survive. Enterprises like PAS ensure that the charities and nonprofits that do survive are very likely to be the ones that will do the most good, for the most people.

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