Tuesday, July 27, 2010

The 2nd Quarter?Trends for the Year

Friend and colleague Marilyn Hoyt summarizes the second quarter...

An excellent roundup and informed speculation.

The 2010 second quarter is behind us. The Financial Times notes that "The US housing market is the biggest debt market...with more mortgage debt outstanding than US government debt" and, in another article, that the federal deficit now and for some time to come is about 1/2 ov what it was at the end of WWII as a % of GDP. Encouraging news and dismal news still swirling around. So where are we now? (Please let me know if you want the citation of any of these notes. Also if you'd like to add a colleague or if you prefer not to receive these notes:)

The staff volatility trend is emerging quickly:
**Nonprofits are starting to re-hire against the positions that were laid off (An April business survey conducted by the NJ Star Ledger found that for the first time in 2 years, more CEO's are planning to hire than lay off)
**Recruiters with large nonprofit practices are seeing strong upticks in demand beginning about last May
**CEO's and development staff are leading in searches conducted by recruiters
**The Chronicle of Philanthropy notes in separate articles that nonprofits are starting to increase salaries again, but foundations are not
**Nonprofit professionals who have lost confidence in the potential for moving ahead where they now work are not only looking to move to another position, but more readily to another city. Assertive Boards and supervising staff are well positioned to recruit a strong candidate if they can demonstrate that their nonprofit is ready to roll again
**If you are searching, check carefully as you interview. Many job descriptions now roll-up the effort of 2 or even more former positions. It may be hard to meet expectations, let alone win success, if this is the situation. Know before you go:)

Corporate philanthropy is redefining itself
**The trend toward bringing marketing priorities into corporate foundation giving has been growing for over a decade
**Now, with corporate foundations still depressed (many had a policy not to diversify their investments), we are seeing what a colleague in the Bay Area refers to as "blurring" across giving methods. The value we are expected to add to the CSR (corporate social responsibility) equation is beginning to show up as part of the giving discussion whether we are working with corporate foundations, corporate contributions, gala ticket purchases from departments supporting their clients/prospects, corporate volunteer programs, employee matching, charity partnerships/awards, or in-kind giving.
**I think most of us are used to thinking of the U.S. as the bellwether in corporate voluntarism. Is this the next big thing coming over the horizon from Europe and Asia? GRI (Global Resource Investment) is fast-growing as the definer of sustainable standards. In Europe, there is a trend toward requiring GRI compliance in order to win contracts, so our international companies are now playing in this field. Where does philanthropy stand in this paradigm? Well, the good news is that the most recent survey on community impact has lots of references to philanthropy: http://www.globalreporting.org/NR/rdonlyres/6D00BC14-2035-42AB-AB6A-5102F1FF8961/0/CIReportfinalnew.pdf. The less good news is that in GRI's own rubric, philanthropy
appears to be positioned in opposition to "sustainable" community inputs. Current thinking does not seem to be moving toward encouraging/requiring philanthropic activity. So....here's a free newsletter to help us watch what's happening http://www.globalreporting.org/griportal/GRI/NewsPressEvents/frmNewsSubscribe.aspx

Foundations seem to be putting out more RFP's
**It seems that the pressure to make scarce resources meaningful is leading to more directive behavior from foundations -- defining the project and issuing an RFP, providing technical assistance/consulting rather than funding, taking on their own projects and producing them soup to nuts (often with nonprofit contractors), setting rigid expectations (such as a merger) prior to releasing more funds or accepting another proposal. Will these patterns spread across the sector and come to dominate activity? Probably not...but since this is growing trendlet, it's one we want to follow attentively
**Keep in touch with your foundation funders and prospects! They notice when we disappear because funding is greatly reduced or on hiatus. Now is the time to call -- to thank, to noodle what's going on in the sector we serve, to act like a real colleague

Government is getting hungrier
**In 2010, we are experiencing tough times in state, county and city budget as cuts in funding
**As stimulus monies end and the tax base is not yet recovered, government is getting hungrier
**Operating cash reserves are more important than ever. We are seeing more frequent stories of school districts, county and state government holding contracted funds "in reserve" or just plain waiting months and months and months to pay. In some instances, grants have not yet been received even as new proposals for the coming year are in review.
**Populations are voting to increase taxes for selected needs (Arizona Prop 16, Georgia education)
**However this won't do the whole job.
1) Governing Magazine notes excise taxes (tobacco, liquor) are on a steep climb.
2) Limiting tax exemptions for charitable gifts is under discussion in New York and elsewhere.
3) Taxes on admissions income has been tested in Illinois. When over 100 supporters turned out for an open meeting, the tax idea disappeared and now discussions of much higher fees for water, sanitation services, and/or other city services are underway.
** Now is the time to check in with colleagues in your field. If precedents exist where these taxes or user fees are in place, it is a problem for all of us. We need to be informed and ready to act.
** Just as in every other part of our work, we need to keep telling the story internally and externally. It is a strong bulwark against the ignorance that yields bad legislation and -- believe it or not -- there's still service and capital funding out there. Our elected officials and their staffs as well as department staff know where it is. Keep talking!

Worth Reading:

www.GivingUSA2010.org -- just as comprehensive as ever, and now free on-line. This is the go-to reference for 2008-09 trends, where private funds are coming from and flowing now.

Turns out that employing about 10% of the U.S. working population pays off. Business journals have been really helpful through this period. Subscribe if you haven't yet. Travelling around the country, I see them most consistently providing us with useful articles on the state of a local nonprofit sector (health & hospitals, the arts). And they are great compilers of lists. This week the San Francisco Business Times built its list of top corporate funders and unveiled them at their annual Corporate Philanthropy Awards http://www.examiner.com/x-10861-SF-Nonprofit-Business-Examiner~y2010m7d22-San-Francisco-corporate-philanthropy-awards-spirited-once-again while Crain's New York Business together with the nonprofit Arts Alliance inked thoughtful articles on the arts sector as well as a useful rundown on the top 100 http://www.crainsnewyork.com/article/20100718/FREE/307189995

The Pew Foundation continues to publish such helpful and thoroughly prepared reports. Here's the latest from July 14th -- a look at the effect of all these furloughs and layoffs on the nonprofit sector. There is some nice categorical work here so you can look at your particular field. http://ccss.jhu.edu/pdfs/LP_Communiques/LP_Communique19_jobs.pdf

Thanks to all the colleagues, grantmaking staff, and trustees who keep finding time to give me the observations see here. Let me know what you are thinking! (Thanks to Joni Podolsky, community engagement specialist, Bay Area, CA)

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