Wednesday, November 10, 2010

Mixed Picture for Nonprofit Donations and Endowments

Studies of financial support for nonprofits have become a growing industry, as evidenced by the following slew of reports:

  • The Chronicle of Philanthropy reported last month that donations to the nation's 400 largest charities by private funding dropped 11 percent in 2009 from the previous year.  As for 2010, of the more than 25 percent of groups that provided a prediction, the median estimate was an increase of only 1.4 percent over 2009 amounts.
  • Not all charities have been hit equally, however.  The Evangelical Counsel for Financial Accountability issued its 2010 Annual State of Giving Report yesterday, which found that among ECFA members giving declined only by 0.7 percent in 2009 as compared to 2008.  At the same time, the report found significant differences depending on activity type, with, for example, members involved in child sponsorship seeing a significant increase in giving while members involved in education seeing a substantial decline. 
  • Focusing on high net worth individuals, Bank of America Merrill Lynch issued its 2010 Study of High Net Worth Individuals in cooperation with Indiana University's Center on Philanthropy.  That study found that while such individuals continued to give at high rates, the amounts given declined from 2007, with overal average gift amounts falling by 35 percent after adjusting for inflation.  As a percentage of income, giving declined to 9 percent from 11 percent in 2007.  For additional coverage of this study, see the Los Angeles Times.
  • College and university endowments have also been the subject of a recent report.  The Commonfund Institute reports that based on data from 80 such institutions, the July 1, 2009 to June 30, 2010 fiscal year saw an average return of 12.6 percent.  Interestingly and contrary to some past trends, the smaller endowments showed on average higher returns.  The Institute relied on preliminary data for the 2010 NACUBO-Commonfund Study of Endowments, which will be released in late January.

LHM

http://lawprofessors.typepad.com/nonprofit/2010/11/mixed-picture-for-nonprofit-finances.html

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