The National Catholic Review

Do the improving fortunes of U.S. not-for-profits suggest the nation’s economic bad times may be nearing an end? The results of a recent survey are at least encouraging. In October the percentage of public charities and private foundations reporting better contribution numbers improved from 23 percent in October 2009 to 36 percent in October 2010 and the percentage of survey participants who reported lower donations declined from 51 percent to 37 percent over the same time frame. Researchers said: “These figures may herald the beginning of an economic recovery in the nonprofit sector, although only time will tell if the trend will continue. For the first time in two years, however, there's cause for cautious optimism about the sector and the economy.”

Almost half of the 2,356 public charities and 163 private foundations that took part in the online survey reported that they anticipate increasing budgets next year. (The survey was conducted by the National Research Collaborative: philanthropy research agency GuideStar with the National Center for Charitable Statistics, the Association of Fundraising Professionals, the Center on Philanthropy at Indiana University, Blackbaud, and the Foundation Center.)

Of course the numbers could be dissembling a little. While overall donations may be going up—after all, America’s wealthiest citizens did very well indeed last year as the country emerged from recession—the number of individuals who are capable of making contributions to the nation’s not-for-profit sector, suggesting the breadth of the national recovery, remains hard to gauge. Of those agencies which reported lower donation rates, “fewer individuals gave” was among the primary reasons for the decline.

And for the eighth consecutive year, a majority (68 percent) of participants reported increased demand for their organizations' services, suggesting that even as overall contributions may be stabilizing, institutional resources may be burning at a higher rate next year.

Indeed Catholic Charities USA’s Third Quarter Snapshot survey provides little reason to feel complacent about the end of the recession, particularly as the nation’s roughly 9.4 percent unemployment rate remains unmoved by the presumably improving economy. CCUSA agencies nationwide reported more people seeking assistance over the summer. Catholic Charities’s survey reports a growing number of requests for assistance from the working poor (up 81 percent), families (up 71 percent), seniors (up 48 percent), immigrants (up 48 percent) and homeless people (up 45 percent).

“The number of moderate income families [seeking assistance] continues to increase,” Linda McKamie of Catholic Charities of Corpus Christi, Texas, said. “A group that in the past was not in need of the type of assistance we provide started to access our pantry and financial assistance — these families report a lost of financial assets due to the loss or lack of employment.”

According to CCUSA, “A big concern facing local agencies is the loss of state funding for poverty programs. With less money coming in under government contracts, programs that provide employment training, child care, pregnancy counseling, emergency shelter to domestic violence victims, housing support, health services and food distribution have implemented significant cutbacks. Local agencies don’t expect the trend to get better any time soon as many states face large deficits because of a loss in income tax revenues.”

The likelihood of a long-time decline in state support has driven Catholic Charities agencies to look at ways to trim costs, consolidate services and raise money in new ways.