April 7, 2008

Fewer Donors, Flat Or Declining Giving Marked 2007

Revenue for the 70 large nonprofit organizations tracked in the Index of National Fundraising Performance by Target Analysis grew a median 1.5% from calendar year 2006 to calendar year 2007, with 61% of the organizations in the index having positive revenue growth. Meanwhile, the number of actual donors dropped again.

The report comes after revenue growth of 2.8% the previous year and is below historical average rates of roughly 4% annual growth. When dollar amounts are adjusted for inflation, real index revenue declined a median -2.8% from 2006 to 2007, according to the Target Analysis index.

Median index revenue generally parallels national economic performance but tends to grow more slowly than the nation's Gross Domestic Product (GDP) during periods of relative economic hardship. As the economy slowed down, people shifted their spending priorities away from charities, compounding the effects of an economic decline on fundraising, according to Tr. In 2007, not only was index revenue growth relatively slow, correlating to a general national economic slowdown, but it also significantly lagged growth in GDP.

Index donors declined a median -1% from 2006 to 2007 on top of a -1.4% decline the year before. Only 41% of the organizations in the index saw positive donor growth in 2007. Donors have been on an uninterrupted decline since the third quarter of 2005, when many organizations had a spike in donors related to hurricane Katrina relief efforts.

These overall declines in donor counts reflect continued difficulty attracting new contributors. New donor acquisition in the index was down a median -5.1% from 2006 to 2007, on top of a -10% decline the previous year. The animal welfare sector was the only industry sector in the index with positive new donor growth in 2007. Several sectors -- including societal benefit, international relief, and human services -- experienced particularly large declines, according to the report.

As a result of recent donor declines, index donor numbers are down a median total -3.1% during the past three years from 2004 to 2007. Only 37% of the organizations in the index had positive donor growth over this three-year period.

Ongoing, persistent donor declines have meant that the revenue growth that most index participants experienced in 2006 and 2007 was almost entirely due to increases in revenue per donor rather than increases in donor population. Overall index revenue per donor increased a median 4.1% from 2006 to 2007, on top of a 3% increase the previous year. Almost three-quarters (74%) of the organizations in the index experienced positive revenue per donor growth in 2007.

For the full report, go to www.blackbaud.com/targetanalytics

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This article is from NPT Weekly, a publication of The NonProfit Times.

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