News for Nonprofits: Winter 2023

Community foundations pull back on funding

A new survey of 98 community foundations representing about $38 billion in assets reveals a worrisome trend for nonprofits that rely on foundation funding. The FEG 2022 Community Foundation Survey from Cincinnati-based Fund Evaluation Group (FEG) Investment Advisors indicates that only 6% of community foundations expect to change their spending. Just one-third of those expect to increase their spending. The median spending rate fell from 4.4% in 2021 to 4.3% in 2022. The respondents also report a growing interest in responsive investments that produce both financial and social benefits. While only 16% of respondents held such investments in 2017, 55% have them in 2022. Donor interest is one reason for the surge. Fifty-four percent of donors expressed an interest in responsive investment this year, more than double the donor interest in 2017 (26%).

Why nonprofits’ recovery shows fits and starts

A report on the health of U.S. nonprofits from Independent Sector finds that the sector seems to be somewhat sluggish and vulnerable post-pandemic. For example, though giving at the end of 2021 held steady compared to 2020, high inflation in 2022 meant that the status quo wasn’t sufficient for some organizations to maintain their staff, services and impact at 2021 levels.

But the gross value added by nonprofits to the economy exceeded the gross domestic product in the first half of 2022, with nonprofits contributing $1.4 trillion to the economy in the second quarter of 2022. It remains to be seen, though, whether this is a leading indicator of an accelerating recovery. After the 2008 recession, most organizations experienced a single-year reduction followed by a recovery year.

The report warns that nonprofit leaders should prepare to weather economic trends. For example, high inflation could cause higher direct costs. It also could lead to reduced government funding and flat or reduced giving.

Charities have new domain name options

Nonprofits have several new options when it comes to their Internet domain names. Public Interest Registry (PIR) — the Virginia-based nonprofit that coordinates website domains — has added .charity, .foundation, .gives and .giving to its nonprofit top-level domain offerings. This could be welcome news for organizations that failed to secure their names on some of the larger top-level domains, such as .org, .com or .net.

PIR believes that these domains offer a variety of benefits to mission-driven organizations. For example, a nonprofit could use one of the new domains for a standalone website for a specific campaign or project, serving as a complement to its primary website. The new domains can be purchased through accredited registrars listed on PIR’s website.

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