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Economic Impact Survey Summary

March 18, 2009

Today, nonprofit leaders in Alberta jointly released the findings of a province-wide online survey titled Impact of the Current Economic Climate on Alberta's Nonprofits and Charities, conducted by several Alberta nonprofit/voluntary sector capacity organizations.

This province-wide snapshot indicates early signs of reductions in earned income, corporate donations and sponsorship, and donations of stock. This takes place at the same time as a rise in demand for services and an anticipated decrease in revenues for 2009. Results indicate that many organizations are adapting to the situation as it emerges, in order to maintain existing levels of programs and services. However, high levels of uncertainty about how revenue sources will be impacted in 2009 and onwards are having a negative effect on their ability to plan ahead.

“The comments shared by nonprofits and charities in this survey provide a window into their frame of mind as they move ahead into what they anticipate will be a challenging 2009,” says Katherine van Kooy, President and CEO of the Calgary Chamber of Voluntary Organizations.

“Looking forward, the main concerns are financial uncertainty, an increase in demand and a growing need to find new approaches to close the gap.” comments Russ Dahms, Executive Director of the Edmonton Chamber of Voluntary Organizations.

“These findings are critical.” adds Mike Christie, Executive Director of the Community Foundation of Medicine Hat and Southwestern Alberta. “By combining this information with research and insight from other sources, we can use this time to help the sector better understand the challenges and opportunities they will face as they navigate the full impact of this changing economy."

This survey was conducted online between February 5 and February 20, 2009 by the Calgary Chamber of Voluntary Organizations. Data was collected from 414 respondents from across Alberta in 17 questions which focused on:

 

Key findings include: 

Sector Facing Financial Uncertainty

The economic downturn raises a range of concerns for organizations, most of which focus on the implications of reduced revenues, the uncertainty a funding shortfall creates and what this will mean for the community they serve.

Organizations rely on a variety of revenue streams to fund their operations, programs and services. While many organizations reported that some revenue streams were the same in 2008 as in 2007, a significant number of organizations also reported a drop in revenues across all areas. Many commented that they anticipate a drop in revenues in 2009. For example, while 51% reported that their charitable donations had remained the same or increased in 2008, many expected donations to fall in 2009 as the economic turmoil continues. More organizations (34.9%) also reported a drop in cash donations than other regions.

Sector Faces Growing Demand in the Community

Rising demand for services and programs, combined with anticipated lower revenues raised concerns about how organizations will continue to meet the needs of the community. 56.2% of organizations have seen an increase in demand for their programs since September 2008, with the major increase in social services, recreation, health, and education and research.

Organizations attributed the increase in demand to a number of factors including a growing population to serve (51.9%), increased advertising and promotions (39.6%) and the uncertain economic conditions (31.1%).

An Opportunity to Embrace New Approaches

Nonprofits and charities, like the rest of us, do not have a clear picture of how long the economic downturn will last. As a result, many organizations are considering short term bridging solutions, not large scale changes to their operations at this time. Organizations that have already experienced a drop in revenue are focused on solutions to reduce costs in areas that will not negatively impact the programs and services they offer the community.

57% of organizations indicated they would try to seek new funding to replace declining revenue. This raises concerns, as funders across Alberta have seen their revenues drop, and are not positioned to meet the growing demand. They point to the critical role government plays in supporting the needs of the community during an economic downturn. This is particularly important as the capacity of funders such as community foundations, private foundations and corporate community investment programs is also reduced by this changing economy.

But, in hardship, there is also opportunity. Charities and nonprofits are creative and innovative and many are considering how they can capitalize on opportunities in this new environment including recruiting the staff they need, taking advantage of lower operating costs, recruiting new volunteers, working with other organizations to meet the needs of the community.

For more information, please contact Volunteer Alberta.

View the Report on Impact of the Economic Downturn Survey Results

 

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