PMA Consulting, LLC

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[Innovation Series] Fund Development: Dispelling A Myth



As a part of PMA’s yearlong research project in 2012, the firm examined the state of nonprofits in Mecklenburg County, seeking to uncover key trends and findings pertaining to nonprofit management.  While the firm set out to discover innovative methods of meeting mission during the economic recession, the process of data gathering uncovered a growing focus on best practices, particularly in the areas of governance, staffing, financial management and fundraising practices.

Today, PMA is pleased to share some of these findings, with a focus on Fund Development.

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According to the National Center for Charitable Statistics (NCCS), there are 7,303 registered nonprofit organizations in Mecklenburg County. Moreover, NCCS provided detailed Form 990 data for 5,894 nonprofit organizations. Out of the 1,913 registered public charities, PMA’s research focused on the 521 public charities with assets of $100,000 or more in the Mecklenburg County.

For the quantitative analysis, PMA’s researchers chose 150 organizations at random, utilizing IRS form 990 (2009 & 2010) as the basis for data collection and research, most of which cover a fiscal year ending 6/30/2010 and 6/30/2011. 48 core data points were chronicled utilizing each section of the 990.  Additional quantitative and qualitative data gathering was conducted through surveys and informational interviews with topic leaders and representative nonprofit organizations.

Myth: Giving is Down Due To the Recession

A widely accepted local belief suggests that the downturn dramatically affected giving to nonprofits in our area, and that decrease in giving can be felt even to this day.  According to our research, that just isn’t the case – the rebound in overall giving was relatively quick.  Of the 114 nonprofits researched that reported giving in each fiscal year FY08 through FY10, public support totaled $330.9 million for FY08, dipping to $319.3 million in FY09, but rebounding to $335.2 million in FY10.

With local workplace giving campaigns losing ground during this period, the dominant narrative was donor caution and mission fatigue. But the data suggests otherwise.  So why are so many organizations still feeling the pinch?  The answer may be in how that charitable giving was redistributed amongst the organizations studied. The data suggests that some organizations faired much better than others.  Of the 114 with giving reported, 39% saw giving decline from FY08 to FY10, with half of those experiencing $100,000+ less in pubic revenue. On the flip side, 61% of organizations were raising more one year after the onset of the recession than they did the year before the recession hit.

A tough question to ask: is your nonprofit blaming the economy when the root cause may be antiquated fundraising strategies?  If the Dow hitting 7062 in February 2009 was a low water mark for our generation, it is fair to say that Wall Street has recovered, with the Dow nearly doubling to 13981 as of today.  While the adage that the “friend of philanthropy is stability” is true, the data tells us that the dip in giving to nonprofits in Mecklenburg County was brief, and those with the ability to give have the means to do so.

In other words, it’s time to stop blaming the economy.