As the executive director of a non-profit organization and as someone involved in non-profit capacity building for most of my career, I know firsthand that fundraising is the lifeblood of most organizations in our sector. Without it, few of us could carry out the critical work that we do with and for our constituents.
So, I was pleased to see that a newly released study by Target Analysis Group, Inc., provides some good news about non-profit fundraising. The company reports that – for the first time in nearly two years – year-to-year growth was essentially unaffected by major disaster giving. This is according to their Quarterly Index of National Fundraising Performance.
Rob Harris, co-author of the report, recently told TSNE that giving has returned to pre-disaster levels.
Gloomy Predictions Aside …
There had been widespread concern that donor fatigue would be a consequence of the historic outpouring of charitable donations generated by the record number of disasters in the United States and internationally from 2001 to 2005. This was a topic of conversation at conferences, meetings and even small gatherings of non-profit managers and executives over the last few years. We collectively held our breath and crossed our fingers that the prognostications of gloom and doom were wrong. And we were not alone.
An October 12, 2005, article in the Chronicle of Philanthropy spoke to nonprofits’ concerns that giving rates were slowing. A February 2005 Guidestar.org “Report from the Frontlines” reported that media as diverse as the Chronicle, Wall Street Journal and Crain’s New York Business questioned whether the remarkable public response to the disasters would precede donor fatigue.
… Giving Again on the Rise
So it’s quite a relief to hear Harris tell us, “Giving has returned to pre-disaster levels. Across the sector, nonprofits are holding on to their revenue levels.”
Some parts of the nonprofit sector have even seen a revenue lift over pre-disaster giving levels. International relief organizations have retained some of the new donors from the Indian Ocean tsunami in 2004. “Animal welfare organizations have done well in holding onto the revenue first generated by new donors that supported them during their 2005 Gulf Coast hurricane relief work,” comments Harris.
Trends to Watch
With the good news, however, come some sobering facts about which we need to be mindful as non-profit executives and managers. Parts of our sector have fared slightly less well following disaster giving. Health and a segment of the sector which Harris calls “societal benefits” did not see a significant lift from the recent disasters, and giving was down in these areas in the first quarter of 2007, albeit not significantly.
A longer-term trend that bears watching closely and which we must begin to counter, as non-profit executives, is a general decline in donor populations over the past five years.
According to Harris, the number of donors giving to non-profit organizations declined a median 0.9% from Q1 2006 to Q1 2007. Organizations have generally been able to compensate for these donor declines so far with increases in the amount of revenue per donor. This has allowed revenue growth to keep up with inflation.
Engaging a New Generation of Donors
When asked why he believes the number of donors is falling, Harris ventured that this may be due to generational differences in giving. The average age of donors is between 60 and 65 years of age, he explains.
It is clear that nonprofits need to continue to serve these donors well. Additionally, we need to create opportunities for new generations of donors to engage with us.
At some point, giving amount increases alone may not sustain overall net revenue growth. With rising inflation a concern for the year ahead, it will be important to watch donor growth rates as more declines could jeopardize real revenue over the long term.
Share Your Ideas
What is your nonprofit doing to engage new donors from Gen X and Gen Y? How do we encourage younger adults, reported to give charitable donations at a rate well below Boomers, to become involved as volunteers, advocates and donors?
Send me an email, and let me know not only what you are doing, but what you think about this information. I will share your ideas and strategies in an upcoming ED Forum.
This is one issue which we need to be discussing as often and with as many of our colleagues as possible. The communities we serve deserve nothing less.