Fundraising Down in ’09, But 2010 Q1 Looks Promising
Fundraising revenues for nonprofits were down 2.3% in 2009 – a decline but not still as sharp a drop as the 2.7% recorded for 2008, the worst year for nonprofits on record.
Still, there is hope. Preliminary results for the first quarter of 2010 are looking better than Q1 of 2009, say Carol Rhine, senior fundraising analyst at Target Analytics, who shared the results of Target’s latest quarterly national fundraising at the Direct Marketing Fundraising Association’s luncheon in Boston this week.
One significant area seeing an upswing is the international relief sector, which saw a huge influx of funds thanks to the earthquake in Haiti.
“Hopefully the Haiti experience will teach people to give again and loosen their purse strings,” she said, noting that a true test will be the attrition rate of these event-inspired donors.
One sector that continues to do well in a recession is animal welfare, Rhine noted. This is because their donor is attracted to the very tangible need for these groups’ services—they see that their $60 gift could save a dog, whereas it would only be a drop in the bucket towards helping a larger global problem.
Arts and culture groups, in contract, don’t fare as well because their services aren’t seen as an essential a need.
Sectors looked at in the index included animal welfare, arts & culture, environment, health, international relief, religion and societal benefit. The report only looked at funds raised through direct marketing techniques and didn’t include things like events, matching gifts or bequeathments.
Seventy-nine nonprofits were include in the study, including the ASPCA, Greenpeace USA, the Smithsonian, Nature Conservancy, Special Olympics, National Shrine of St. Jude and Oxfam America. The research looked at over 38 million donors and more than 74 million gifts totaling over $2 billion in revenue.
To be included in the report, nonprofits must have had over 100,000 active donors and fundraise on a national level.
Revenue overall and revenue per donor were down last year, while retention and reactivation rates were flat after being down in 2008.
Direct mail still accounted for the majority of gifts—78% of respondents’ direct response generated income came from mail, 9% from the Web, 3% from telemarketing and 10% other.
The percentage of total Web giving has more than doubled in the last five years, up to 9% in 2009 from 4% in 2005.
While social media isn’t directly raising a lot of money for nonprofits yet, it can be a great way to raise awareness of your brand, noted Rhine. She knows of one organization that got a $250,000 donation after the donor read about their work on a blog post.
The average gift given online — $79 — is generally higher than other media, with $40 reported for mail, $45 for telemarketing and $29 for other. This, says Rhine, is typically because online donors are giving via credit card, and might be donating based on what they want to give, rather than what they can really afford to give.
The top new donor acquisition channel last year was mail at 79%, trailed by Web at 12%, and 1% other. Tracking the initial motivation of a first gift is more difficult today, because people are touched by so many different media.
“Things aren’t as tidy anymore,” Rhine said, encouraging nonprofits to embrace new ideas.
“Be bleeding edge—think ahead about what people are going to do,” she said. “You have to be ready for the convergence of technology.”
The complete report can be downloaded here.
