Nonprofits and Economic Downturns

The instability of today’s economy and the global financial markets holds many repercussions for the nonprofit sector. Fundraising becomes increasingly challenging as donors can no longer give as generously as in the past. Foundations may be forced to reduce their grantmaking, and leaders may find it progressively more difficult to sustain their organizations through these complex economic times.

This selected reading list contains citations to selected works from the Foundation Center's bibliographic database on the topic of nonprofits and economic downturns. Materials cited are journal articles and reports. For a complete bibliography on this topic, use Catalog of Nonprofit Literature, entering any of the following subject headings in the subject search field box: Economic conditions, nonprofit organizations—economic aspects, foundations—economic aspects, fundraising—economic aspects.

Research and Analysis

Effects of the Economic Crisis on Health Foundations: Results of a Survey of GIH Funding Partners. Washington, DC: Grantmakers in Health, 2009. 8 p.

Provides findings from a survey of 127 Grantmakers in Health Funding Partners that was conducted from November 25th, 2008 to January 5, 2009. The survey contained questions that explored changes in assets, budgets, strategies, and operations, as a result of the economic downturn.

Foundations Support Families Hit by Economic Downturn. Council on Foundations, 2008. 8 p.

Provides results of a survey that explored how grantmakers have responded to the current economic slowdown.

"Giving During Recessions and Economic Slowdowns". Giving USA Spotlight vol. Issue 3 (2008) p. 1-17.

Examines giving patterns during economic downturns and recessions from 1967 to 2007. The analysis explores giving by donor type and by type of recipient organization.

Hall, Holly. "How a Recession Would Affect Fund Raising: Certain Gifts Could Grow.”  Chronicle of Philanthropy, vol. 20 (7 February, 2008): p. 8.  

Discusses the potential effects of a recession on direct marketing, special events, foundation and government grants, corporate donations, large gifts, bequests, and other efforts to raise donations.

Lawrence, Steven. A First Look at the Foundation and Corporate Response to the Economic Crisis. New York, NY: Foundation Center, 2009.

Steven Lawrence, the Foundation Center's senior director of research, examines giving by close to 50 institutional donors that have announced over $100 million in support for efforts ranging from reducing the number of foreclosures to shoring up food banks and services for the homeless. This research advisory is part of an ongoing Foundation Center series intended to shed light on the potential impact of the current economic downturn on the nonprofit sector.

Turning Crisis Into Opportunity: How the California Community Foundation Is Helping Its Grantees and Other Nonprofits Prepare for Uncertain Economic Times. Los Angeles, CA: California Community Foundation, 2009.

Summarizes results from the California Community Foundation's grantee survey and explains how the grantmaker is helping nonprofits weather the current economic crisis.

Voigt, Bradford William. "Resilient Philanthropy: How Various Economic Scenarios Affect Giving in the United States." Advancing Philanthropy vol. 15 (September-October 2008) p. 35-8.

A series of statistical charts demonstrates the impact of economic and political crises on charitable giving, finding that changes in giving are not directly correlated to changes in the stock market, and that philanthropy remains surprisingly strong during times of economic strife.

Recommendations for Nonprofits

20 Emergency Funding Sources for Nonprofits. Fieldstone Alliance's Nonprofit Tools You Can Use e-newsletter (16 December 2008).

The Nonprofit Finance Fund analyzed the impact of the 2001 economic downturn on 6,500 mid-sized organizations and provides advice for organizations based on the research findings.

As the Nonprofit Sector Faces Recession, Nonprofit Finance Fund Outlines 5 Recommendations to Prepare for Economic Downturn. Nonprofit Finance Fund, 2008

The Nonprofit Finance Fund analyzed the impact of the 2001 economic downturn on 6,500 mid-sized organizations and provides advice for organizations based on the research findings.

Collins, Mary Ellen. "Enjoy the Ride! How to Effectively Raise Funds in a Roller-Coaster Economy." Advancing Philanthropy vol. 15 (January-February 2008) p. 26-30.

The article provides basic fundraising advice that can be especially useful during uncertain economic conditions.

Fernandez, Kim. "Turning to a New View." Associations Now, vol. 4 (July 2008) p. 44-8.

Offers guidance on what an association can do to help its members navigate an economic downturn. Emphasizes preparation, positive thinking, and the importance of reminding members of the association's value.

"From Funders to Funders: Advice on Giving in Hard Times." Nonprofit Quarterly vol. 10 (Summer 2003) p. 44-8.

Three foundation leaders share their ideas about the challenges they face in the economic recession. The article features Emmett Carson, president and CEO of the Minneapolis Foundation, Sandra Mikush, assistant director of the Mary Reynolds Babcock Foundation, and Gary Yates, executive director of the California Wellness Foundation.

Gaberman, Barry D. "Facing the Financial Crisis: 10 Smart Things Your Board Can Do Now." Board Member vol. 17 (November-December 2008) p. 8-11.

General advice for board members on navigating a nonprofit through troubled economic times. The article offers ten basic tips, plus several examples of the positive side of economic slowdowns.

Head, George L. "Good and Bad: Sustaining Nonprofits During Economic Downturns." NonProfit Times vol. 22 (15 May 2008) p. 17-8.

During challenging economic times, nonprofits can use risk management principles to examine threats and opportunities. The article briefly highlights the risks associated with staff, income, property, and reputation.

Kettner, Linda. "Clarifying Complexity." Currents vol. 29 (April 2003) p. 30-5.

Explains how to develop a strong case for support during tough economic times.

King, David H. "What's the Key to Raising Money in a Tough Economy?" Nonprofit World vol. 26 (July-August 2008) p. 24-5.

Discusses how a strong board of directors can aid in fundraising during difficult economic conditions. Notes four steps to cultivating a solid board that can help raise and give money.

Klein, Kim. "Raising Money in Uncertain Times." Grassroots Fundraising Journal vol. 21 (January-February 2002) p. 4-6.

Klein provides her analysis on the effects fundraisers will see after the September 11 events. She notes that the country was already entering a recession before the terrorist attacks, but that history has shown that individual philanthropy does not alter over the long term significantly after disasters. The picture may be quite different for foundation giving, though, as these entities will see the value of their endowments decrease. She also provides tips for direct mail, special events, and corporate fundraising.

Lewis, Herschell Gordon. "Making the Case: Times are Tough. You Should be Tougher." NonProfit Times vol. 22 (15 July 2008) p. 12.

Offers advice on fundraising under adverse economic conditions, with a focus on direct mail solicitations.

Male, Richard I. "How to Prepare Your Nonprofit for an Economic Recession.”   Grassroots Fundraising Journal, vol. 27 (May/June 2008): p. 11-2.

Managing in Hard Times. Institute for Conservation Leadership & Environmental Support Center, 2003.

"This publication provides best practices and tools for managers of environmental and conservation nonprofits in our challenging economic times."

Managing in a Tough Economy: How Nonprofit Leaders and Their Organizations Are Facing the Uncertainty . Bridgestar, 2009.

Operations and finance professionals describe steps that have been taken to weather the economic downturn.

Managing in Tough Times: A Collection of Resources for Nonprofits and Funders Navigating Turbulence. The Bridgespan Group.

"Includes Managing in Tough Times: 7 Steps," "Managing Through Tough Times Survey Themes," "In Bad Economic Times, Focus on Impact," and other articles.

Young, Dennis R. (ed.) Wise Decision-Making in Uncertain Times: Using Nonprofit Resources Effectively. New York, NY: Foundation Center. 2006. xi, 281 p.

A follow-up to Young's 2004 publication "Effective Economic Decision-Making by Nonprofit Organizations," this new volume focuses on the challenges faced in the post-9/11 world. Demands on essential nonprofit services have escalated, while the bursting economic bubble of the 1990s and the government’s preoccupation with terrorism has reduced funding. Moving beyond the core principles set out in "Effective Economic Decision-Making"—pricing, compensation, investment, outsourcing, economic options, strategies, and policies—this new guide examines four topical issues: operating decisions, capacity building, foundation decision-making, and the nonprofit/business dynamic.