The Effect of the Economy on the Nonprofit Sector

This June 2010 survey of U.S. public charities and private foundations found that the economy is creating a difficult financial environment for nonprofit organizations. About 40% saw declines in contributions during the first five months of 2010. Animal organizations are included in this decline, specifically animal shelter and rescue groups.

Mental health and crisis intervention organizations were the most likely (51%) to report a decline in contributions. However, the animal sector is also suffering from the downturn; 43% of animal organizations reported a decline during the first five months of 2010. Reasons for the decline experienced by animal organizations include: less individual giving (88%), smaller gifts from individuals (72%), smaller private foundation grants (32%), smaller corporate gifts (21%), discontinuation of private foundation grants (19%), discontinuation of corporate gifts (14%), discontinuation of government grants (2%), discontinuation of government contracts (2%), smaller government grants (2%) and “other” factors (6%). Meanwhile, 69% of animal groups saw an increase in demand for their services.

In other findings related to the animal sector:

• 12% said that their organizations were in imminent danger of closing.
• In order to balance budgets, 16% of respondents cut their budgets, including reducing program services (66%) and laying off employees (11%).
• Among the 97% of animal organizations that use volunteers, 12% used one or more in what had formerly been paid positions.
• About 35% of animal organizations increased their reliance on volunteers, while 17% experienced a decline.

For the specific animal-related data cited above, please read this article, “Animal Nonprofits Still Taking Hit from Recession” For more details about the nonprofit sector in general, please see the GuideStar.org link below (links to external PDF file, 2.0 MB).