Next year will be worse, predicts Robert Ottenhoff, chief executive officer of GuideStar, a firm that provides financial data on nonprofits. "Foundations, who contribute significantly to nonprofit efforts, were willing to go deeper [into endowments to keep up giving] in 2008. But with endowments down, foundations aren't likely to repeat [that]." Add to that a dramatic decline in state government grants and corporate giving, and it becomes clear that nonprofits' streams of funding are drying up. Particularly worrisome for nonprofits and their clients are states like Florida and California, where unemployment is high and state budgets are especially tight.
To keep operating, many nonprofits are starting with the basics – better targeting of donors and cleaning up accounting programs to pinpoint savings, says Ms. Klein. She points to Amnesty International, which uses advanced technology to analyze giving patterns in order to maximize donations while reducing the overall frequency of fundraising campaigns throughout the year.