October 20, 2014


Fundraising climate still tough, survey finds

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Andrew Watt

Andrew Watt

Reflecting continuing sluggishness in the charitable marketplace, fewer than half of nonprofits responding to a national survey reported raising more in the first half of 2011 than they did in the same period a year earlier, while nearly a third raised less.

Forty-four percent of 813 nonprofits surveyed by The Nonprofit Research Collaborative for its Summer/Early Fall 2011 report said they raised more in the six-month period this year, while 20 percent said they raised less, and 25 percent raised the same amount.

In the same period in 2010, 43 percent said they raised more, 33 percent raised less, and 24 percent raised the same amount.

In comparison, the 2007 State of Fundraising Survey by the Association of Fundraising Professionals, or AFP, found 65 percent of respondents raised more money that year, before the economy collapsed, than in 2006, while 24 percent raised less, and 11 percent raised about the same amount.

"A much larger percentage of nonprofits were seeing significantly higher fundraising results before the recession," Andrew Watt, president and CEO of AFP, says in a statement.

"With many economists predicting a flat economy for several more years, charities face a very challenging environment in the near future, with fewer funds available while the demand for services and programs remain quite high," he says. "This is the reality charities will have to address."

Bigger charities were more likely to see an increase in fundraising than smaller charities, with 57 percent of organizations with annual budgets of $3 million or more receiving more in contributions, compared to 44 percent of all responding charities.

For most subsectors, four in 10 responding charities saw an increase in fundraising, compared to 50 percent of human-services organizations and 20 percent of international organizations.

Most charities responding to the survey used a variety of fundraising methods, with 90 percent seeking funds from corporations; just over 80 percent asking board members, seeking major gifts, holding special events and soliciting through direct-mail; just over 60 percent fundraising on the Internet and through email; and roughly 45 percent using social media and planned giving.

Most methods of fundraising generated increases at roughly 30 percent to 36 percent of responding charities, while 46 percent of responding charities that used special events reported an increase, and 25 percent of those pursuing planned gifts saw an increase in planned-gift commitments.

The survey also found that investment in fundraising yields greater revenue for nearly all methods studied.

Sixty-six percent of responding charities that invested in events, for example, saw an increase in event revenue in the first six months of 2011, as did 60 percent of those that increased their investment in email and use of the Internet, although only about 30 percent of responding charities actually increased investment in those two fundraising methods.

And 54 percent that invested in direct-mail or major-gift fundraising reported increased revenue from those methods.

The survey found that charities often track fundraising revenue and expenses based on the method of fundraising, but few nonprofits track staff time by fundraising method.

And charities that spend $1 million to $3 million were the only group reporting an increase in effort among professional fundraising staff, with 51 percent reporting an increase in effort.

Twelve percent of responding charities currently are involved in a campaign, and 34 percent are planning one, with organizations currently in a specific campaign somewhat more likely to see gifts increasing.

Sixty-two percent of those in a campaign reported they raised more in the first half of 2011, compared to the same period a year earlier, except for organizations spending less than $250,000 a year, groups that did not see any significant increase.

"To help donors focus on achievable results, many charities now are setting up short-term specific campaigns," Nancy Raybin, a member of the board of directors for the Giving USA Foundation, says in a statement. "By setting discrete fundraising goals for specific activities, nonprofits find they can break through the uncertainty about the economy and help donors connect their gifts to community needs."

Partners in the Nonprofit Research Collaborative include the Association for Fundraising Professionals, Blackbaud, Center on Philanthropy at Indiana University, Foundation Center, Giving USA Foundation, GuideStar USA, and National Center for Charitable Statistics at the Urban Institute.



Comment on this article

Comments

What this article says to me is that investing in technology and other ways to be savvy fundraisers is the KEY to being and staying sustainable in today's challenging economy.

Particularly of concern are the smaller organizations who tend to lag behind in terms of technology and best practice adoption due to lack of funding. A shift in mindset MUST be made that investing here is vital to the longevity of the org.

Startling to believe that only 60% fundraise online and an even lower % send out emails. All in all an eye opening article, thanks for sharing!

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