PHILANTHROPY: A LAGGING INDICATOR

With the Dow flirting with 10,000, and with unemployment claims down (albeit slightly), some economists are claiming that the recession has bottomed out. While Zimmerman Lehman is suspicious of unbridled optimism in the face of what so many have suffered in the last year, let's give these economists the benefit of the doubt and agree that, yes, the worst is behind us.

Where does that leave the nonprofit sector? Are the days of layoffs, furloughs and shotgun-marriage mergers behind us? We think not, though there are reasons for hope. Before we get to the hope, however, let's deal with the pain. Philanthropy is what economists call a "lagging indicator:" that is, the impact of economic changes takes a while to be felt in our sector. When the financial sector tanked in the fall of 2008, nonprofits were at first shielded from the mayhem. Foundations and other grantors continued to make substantial grants (since their portfolios had not yet felt the pain of the debacle), and individual year-end giving was, if not robust, at least healthy.

While the 2009 contributions data won't be available until June of next year, anecdotal evidence suggests that the recession has taken hold in our sector with a vengeance, and will continue to wreak havoc well into 2010. Foundations are either restricting grants to past grantees or focusing entirely on "life and death" issues like hunger and homelessness. Three-year capital campaigns have morphed into five-year efforts as prospective donors applaud the work of nonprofits but are fearful of making significant commitments.

Most telling is the sudden disappearance of nonprofit job opportunities. If you had turned to the "help wanted" section in The Chronicle of Philanthropy in the early part of 2008, you would have found as many as 18 pages of ads for executive directors, development directors, major gift officers and the like. The latest issue featured four pages of ads. Remember when folks would bemoan the fact that development directors only stayed in their jobs for an average of 18 months? No longer: skilled fundraisers who in normal times might be looking to move up the ladder are paralyzed with fear and are staying put. When a fundraiser does leave, the institution is often reluctant to re-hire. And as more and more nonprofits close their doors, jobs disappear.

In the effort to keep you from making covetous glances at the razor blades in your medicine cabinet, Zimmerman Lehman believes that, amidst all the anguish, there are reasons for hope. They are 3 in number:

Don't fall victim to the "woe is me" mentality. With the right pep talk to your board you can get out of the doldrums also. Yes, philanthropy is a lagging indicator, and your fundraising campaigns may take longer than they would have taken five years ago. But that is no reason to despair; the U.S. has a proud history of private and public giving, and people are ready to help if approached with imagination and hope.