It was the best of times, it was the worst of times…

If you read or heard many of the leading voices in philanthropy recently, you might well come away with the impression that fundraising is in tough shape.  The comments have been so dour you may have missed one very important detail:

Giving in the US is at near historic levels!

Here are just a few examples of how industry leaders and media outlets are saying that the resource development glass is half empty.

• At the annual conference of the Association of Fundraising Professionals in Baltimore, AFP CEO Paulette V. Maehara told attendees that “we’ve never seen so many organizations raise such few funds.”
• PNN Online reported it as “the worst year for charitable fundraising in a decade…”
• The much anticipated Giving USA 2010 introduced its Executive Summary with the sullen statement that “This is the steepest decline in current dollar terms since Giving USA began its annual reports in 1956.”

The Chronicle of Philanthropy went even further, challenging Giving USA’s overall characterization of the fundraising marketplace as overly optimistic.  “Evidence that giving might not be as strong as Giving USA suggests can be found in numerous studies conducted over the past year,” wrote Holly Hall.

There is no question that 2009 was a difficult time and 2010 offers continued challenges to nonprofits.  Unemployment, while just half that of the Great Depression, is significant.  The US stock market, although significantly rebounded from the crash, is way off its highs.  The real estate market, although now apparently turning a corner, had collapsed and triggered near historic defaults and foreclosures.  Businesses retrenched.  Foundations saw shrinking endowments.   And yet…

Giving in 2009 exceeded $300 billion for the third consecutive year!

2009 is one of the three biggest years in the history of US philanthropy!

That’s right.  Buried in the bad news that both confirmed our worst suspicions and excused our greatest failures is a harbinger of hope.  But within that hope is a challenge that many of us have yet to confront directly.

That challenge is to first better understand what we are doing, to do the best of it more often when times are lean and to expand our market to new audiences.

This is not some abstract concept.   It is routed in one core belief and a series of specific measurements.  The belief is that fundraising drives philanthropy.  That our acquisition, cultivation and solicitation are the reasons that people give to us rather than to some other institution or perhaps not at all.  The measuremeants are all about the numbers and type of people we contact.

By way of example, businesses routinely make sales projections by estimating the ratio of suspects to prospects to sales.  In other words, it might take 600 people vaguely interested in a service to come up with 100 who would actually consider buying it and, finally, 25 who will decide to buy this year and to buy from you.

This is pretty similar, in fact, to planning for a capital campaign and using a gift pyramid.  Or perhaps to assembling a portfolio for a major gift officer.   Or conducting donor acquisition.  The ratios are all different but the process of estimating based on historical averages, and then learning to modify those ratios in good and bad times, however difficult and inexact, is the way to determine if you are doing the right things, in the right volumes, with the right people and at the right times.

Unfortunately, without knowing whether more or fewer solicitations were conducted last year, and without knowing whether we asked for more or less money in 2009 than in 2008, we really can’t judge whether Americans were being more or less charitable or, for that matter, how much the economic crisis had to do with the outcome.

Sure, times were tough.  But if the Giving USA numbers are in any way close to reality, it is helpful to note that the $300+ billion given in 2009 was raised by an ever growing pool of nonprofits.  According to Giving USA 2009, there was a 53% increase in the number of nonprofits in the decade between 1999 and 2009.  In short, more institutions likely received these donations, driving down average cumulative giving per institution.  Additionally, certain types of charitable activity are particularly appealing to donors in times of public hardship, making it more difficult for some types of organizations to raise money than for others.

In short, if an institution did the same things in 2009 that it did in 2008, they would likely have seen a different result since there was more competition and the public’s attention was redirected to the needs so vividly displayed in the media.

As everyone in the nonprofit world knows, difficult doesn’t mean impossible.  In the world of fundraising it simply challenges us to commit to a higher ratio of suspects to prospects to donors, to continuing to ask for support even when times are tough and that we need to open the doors at the base of the pyramid to a much wider spectrum of support.