Michigan study gives look at 2018 nonprofit giving, expectations for 2019

Sherri Welch, Nonprofits, Crain’s Detroit Business published February 13th, 2019 03:57 PM

A newly released survey of Michigan nonprofit executives is providing a glimpse of how giving to nonprofits fared last year, along with the outlook in Michigan for this year.

Michael Montgomery, owner/principal, Montgomery Consulting Inc.

Nearly 78 percent of the 93 nonprofit CEOs and development leaders who responded to the survey said their organizations raised at least as much last year as they did in 2017.

However, the proportion of respondents who said they did better year-over-year has declined in recent years. Fifty-four percent said they did better in 2018 over the previous year, compared to 57 percent who said they did better in 2015 year-over-year.

That’s significant, given 2-3 percent inflation, said local fundraising consultant Michael Montgomery, the author of the 2019 “Michigan Fundraising Climate Survey.

Just less than a quarter said their giving stayed the same last year, and 22 percent said they raised less, according to the study.

The impact of tax reform on giving was something that concerned respondents of last year’s survey, Montgomery said. At that time, two-thirds thought tax law changes would be very bad for fundraising.

But it turned out things weren’t as bad as they thought.

In this year’s study, just 18.5 percent of those surveyed said tax law changes were to blame for fundraising declines.

This year’s survey is the seventh conducted by Montgomery, a fundraising consultant and an adjunct professor at the University of Michigan-Dearborn, teaching fundraising and grantwriting.

Responses came from a broad swath of the industry representing community foundations, health and human services, arts and culture, youth development, sports recreation and higher education, Montgomery said.

On the low end of budget size were community development organizations with annual budgets of about $250,000 and on the high end, a research university.

Optimism is waning about giving in Michigan in the coming year.

Just 12 percent of those surveyed believe 2019 will be a better fundraising year than 2018. That’s down from 70 percent in 2016, Montgomery said.

Just over half or 51 percent said they expect fundraising this year to be on par with 2018, according to the report, and more than a third expect worse conditions in 2019.

Among other questions, the report confirms Michigan’s heavier reliance on corporate giving than other parts of the country.

The 2018 Giving USA national statistics pegged corporate giving at 5 percent of the $410.02 billion donated from all sources in 2017.

Last year, in Michigan, nonprofits got 18 percent of their donations from corporations, according to the Michigan Fundraising Climate Survey.

Looking even more to the future, Montgomery asked respondents how they think generational change will affect giving. Their responses signal that the transition to younger philanthropists, grantmakers and corporate giving officers is expected to be neutral or positive for nonprofits in all but one area of giving: major gifts.

Nearly a third of survey respondents said they were concerned the generational change could be unfavorable for the nonprofits they represent when it comes to large gifts in the future.

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