Again in 2011, direct donors to major nonprofits declined in number. The median change was a 2.1% decline in both the number of donors and the dollars they gave in 2011, compared to 2010.
Blackbaud’s Paige Grainger talked to about 40 DMAW members at the monthly Lunch ‘n Learn meeting on May 17 at SEIU’s conference center. Those present also got a segment-by-segment comparison to 2010.
Some of the highlights:
- Arts and Culture, and Religious nonprofits are seeing signs of recovery
- Environmental organizations saw little change, on average
- Human Services and Societal Benefit organizations saw strong increases
- Health, International Relief and Animal causes saw significant declines
- Online donations have grown steadily, but still comprise just 8.8% of all revenue.
Blackbaud’s Target Analytics has been analyzing the donor files of 80 or so large nonprofits for many years, and updates their analyses of this data every quarter. Over the past five years – in fact, since the third quarter of 2005 after Hurricane Katrina’s philanthropic outburst, the number of donors and dollars has declined.
Over the past five years, the decline in the number of donors has declined 5.3%. While the chart shows a gain of 1.9% in revenue, this represents an inflation-adjusted decline of 8.9%
The DMAW members and guests in the room offered a variety of explanations, which Paige agreed were plausible:
- The economic conditions have caused many donors to cut back on philanthropy (yet the decline began before the recession).
- Natural disasters have a big impact in the health, international relief and animal sectors, but little impact elsewhere. Naturally organizations that raised millions after the Haiti earthquake of 2010 saw comparative declines in 2011.
- What we as fundraisers do has an impact. For example, for at least the second year in a row, the number of new donors has shrunk, possibly due to reduced budgets for acquisition. In 2010, recapture of lapsed donors increased, possibly due to more intense focus on data mining within organizations’ own donor files.
This index only focuses on 80 of the largest, long-standing organizations in the sector. According to the IRS, the number of 501(c)(3) organizations has increased 16% between 2005 and 2010 . The donors to those organizations are in many cases those who have abandoned larger, older organizations. The reasons? Newer organizations might be more creative and aggressive in fundraising.
New organizations might also have causes that are more attractive to some donors. Many new nonprofits practice “laser philanthropy” – solving very specific and local problems. For example, rather than giving to a universal cancer research fund, donors may enjoy being able to support causes that research cures for very specific causes. This may appeal to many donors who didn’t realize they had a choice before. Similarly, “Save the Monongahela River” might siphon off donors in the Northeast who previous gave to a national environmental organization.
A wealth of industry data is available from Blackbaud, click here to learn more.
Rick Christ is a former DMAW President. He is Vice President at Amergent, a direct fundraising agency and database provider that has expertise serving regional and national nonprofits. Follow Rick on Twitter – @Rick_Christ or email him at RChrist@Amergent.com