CEO Corner: Economic Trends, Donor Behavior, and Orr Group’s Q1 Insights

Created By: CJ Orr
April 9, 2025

As we move deeper into the year, I wanted to take a moment to reflect on where we stand—both in the broader environment and within our own organization. There’s a lot happening on multiple fronts, and I hope this note helps provide some clarity, perspective, and direction.

This is a comprehensive update (and you’re welcome to use AI tools to get the highlights quickly!), but I encourage you to spend a few moments with it. I’ve structured the message around two key themes:

• Current Market Volatility: Thoughts on how to engage with donors during this period of uncertainty, including key considerations and potential next steps.
• Q1 Highlights & Looking Ahead: A brief recap of our progress in the first quarter and what we’re focused on as we head into Q2.

Special Alert: Navigating Donor Conversations During Market Uncertainty

Given the recent stock market volatility fueled by trade tensions and broader economic uncertainty, many of our clients have reached out with questions. We wanted to share how we’re approaching this environment, along with some practical insights and recommendations to help you sustain strong donor relationships during this time.

• Do Your Homework: Before approaching donors, research how recent events—such as tariffs, executive orders, or other economic triggers—might directly affect them or their businesses. This preparation helps ensure your approach is informed and considerate.  
• Maintain Open Communication: Don’t hesitate to reach out directly to your donors right now. Donors appreciate personal connections, especially during uncertain times. Engaging in conversation demonstrates care and helps maintain strong relationships.  
• Continue Your Fundraising Efforts, Thoughtfully: Fundraising should continue, but with sensitivity to current events. Consider reframing your requests: “Given the uncertainty in the market and political landscape, we invite you to consider a gift—with thoughtfulness and an understanding that these conditions may understandably shape our conversation.” 
• Adopt Flexible Strategies: Flexible giving options can be particularly appealing during periods of economic uncertainty. Consider presenting “recession-style” gift structures such as flexible payment schedules, recession or market adjustment clauses, or non-cash contributions. In uncertain times, donors often shift from giving out of disposable income to using their donor-advised funds (DAFs), so it may be a good time to encourage gifts from DAFs.   

Our Outlook: We are experiencing the early stages of a prolonged trade conflict marked by significant market swings. Some developments may stabilize markets, while others create additional turbulence (like the news that just came out about some tariffs being lifted). Our best advice—and by extension, to your donors—is straightforward: continue with the work and remain focused.

Conclusion: Stay focused on what you can control, prioritize clear and thoughtful communication, and offer flexibility in your asks.    

Together, we can successfully navigate this challenging time.

Q1 Update: Economic Trends and Orr Group Insights

Nine months ago, I had the privilege of becoming the CEO of Orr Group. Reflecting, I couldn’t have anticipated all the challenges and opportunities ahead. Early on, I sought advice on becoming an effective leader, and one recurring theme stood out clearly: communication. With that in mind, I’d like to share candid updates on trends we’re seeing across the economy, the nonprofit sector, and within Orr Group.

Macro Trends: The Economy and Administration Impact

Over the past six months, significant changes have reshaped our economic landscape. With a new administration aggressively pursuing its agenda, we’ve seen a surge in executive orders and policy shifts—over 100 related legal cases are already challenging these changes. While reactions are mixed, these policy shifts undeniably impact us all.

Key indicators to watch include inflation, unemployment, consumer confidence, tariffs, and economic growth. We’ve experienced one-quarter of negative growth—one more consecutive quarter would officially signal a recession, but that doesn’t seem like the most probable outcome. We’ve also seen two days of losses culminating in over 10% that have never been seen before in the market’s history. The good news is that the market rebounded sharply today after the 90-day pause on tariffs for certain countries. Additionally, unemployment has remained relatively low (around the crucial 4% mark), thanks mainly to private-sector job creation absorbing government cutbacks or adding jobs for manufacturing in the US. Inflation must stay close to the 2% benchmark to avoid a deeper economic downturn. However, ongoing tariffs pose risks that could complicate this.

On an additional optimistic note, there continues to be rapid advancement with AI. The productivity gains driven by AI innovation may continue to drive economic growth and productivity. We’re hopeful these AI investments will make a meaningful difference in the months ahead.

Micro Trends: The Nonprofit Sector

The nonprofit sector is navigating significant turbulence in response to these macroeconomic shifts and federal policy changes:

• Government Funding: Approximately 27% of nonprofits rely on government funding, and many of these programs face elimination. Organizations are rapidly pivoting, intensifying efforts to boost individual giving to offset these losses.
• Corporate Giving: Companies have grown cautious due to fears of retaliation and economic uncertainty. Many are reconsidering or reducing their philanthropic commitments, favoring lower-risk giving strategies.
• Foundations: Some foundations have stepped up their giving by increasing support to current grantees or revising their strategic priorities. However, this increase will not entirely offset reductions in federal funding.
• Individual Giving: Individual donors, responsible for about 67% of nonprofit funding, remain the backbone of our sector. Their giving is less affected by government cuts; however, they are affected by market downturns. Either way, individual philanthropy should remain the essential focus area for nonprofits.
• DEI and Executive Orders: Recent executive orders directly impact many nonprofit organizations, prompting careful consideration of legal advice and adjustments in messaging and fundraising strategies. We are actively working with several clients affected by these orders to navigate these sensitive areas thoughtfully and effectively.

In short, the nonprofit sector is resilient and adaptive. If the government is not included in the giving totals, we’ll work our way through these economic issues, and giving will end up flat. Individual giving will be impacted by the short-term market, but we see a track to modest disruption if looking over a year.  

Still, there are critical issues ahead, notably the anticipated tax legislation. While changes to charitable deductions seem unlikely, we might see new taxes targeting endowment income or challenges to the status of certain business-like charities. On a positive note, the standard deduction might become more inclusive of charitable donations, potentially boosting giving from non-itemizers. Pay close attention and advocate where possible—we’ll keep you updated.

Orr Group: Q1 Insights

Internally, Orr Group has also experienced significant change this quarter. Two of our longtime partners have moved on, and while losing seasoned leadership is always challenging, I’m proud to report that our firm has emerged stronger than ever.

Our executive team, including myself, Steve Orr, Casey Orr Whitman, and Kelly Dunphy, has quickly adapted, alongside leaders like Adam Glick, Amanda Nelson, and Becca Bennett stepping up significantly. The entire Orr Group team has rallied together, ensuring our commitment to exceptional client service remains steadfast. Despite the leadership transition, Orr Group finished Q1 exactly on budget and aligned with our expectations—proof of our team’s resilience, dedication, and talent.

With all of the turmoil in Q2 already, we’re expecting a slowing of decision-making until there is more clarity around market expectations. The economy and business coming through our firm will slow in Q2, but we expect and hope that Q3 and Q4 will rebalance.

Looking ahead:

• We remain committed to closely monitoring macroeconomic and political developments, advising clients proactively on emerging trends and risks. We expect that these external challenges will slow the sector and our business.
• We’re deeply exploring how AI will continue reshaping the nonprofit and professional services sectors. Our goal is clear: we aim to become experts, embracing AI innovation rather than being replaced by it.  
• We maintain confidence in the resilience of both America and the nonprofit sector. We’ve successfully navigated economic cycles before—consider how the sector emerged stronger after COVID—and we’ll navigate this one too. While growth isn’t likely in the cards over the next month or two, we’re confident in the sector’s ability to attract donors from far and wide.   
• Stay vigilant regarding upcoming tax legislation and advocate proactively to protect our sector’s interests. 
• Focus on what you can control, prioritize clear and thoughtful communication, and offer flexibility in your asks.  

Thank you for your continued partnership and trust. I look forward to updating you again soon.  

Best,

CJ Orr
CEO, Orr Group

CJ Orr is the Chief Executive Officer of Orr Group. As an expert project and relationship manager with 10+ years of experience in the sector, CJ utilizes data, technology, and financially-backed trends to execute on the development of strategies and tactics to drive effective fundraising plans that meet or exceed targets.