Charities Face Struggles to Keep Donors Loyal, Study Finds

By Holly Hall
Contributor

July 26, 2007 | Read Time: 3 minutes

Charities that raise money from direct mail and other mass appeals say they are garnerning more dollars from such solicitations than they did in the past, but many organizations face a harder time recruiting donors and persuading them to give again, a new survey has found.

The quarterly survey, which assessed the direct-marketing returns of 70 national charities, found that in the 12 months ending in March, gifts rose by 2 percent over the preceding 12-month period. But the number of new donors dropped by 4 percent — on top of a 3.5-percent decrease in the previous year. The number of all donors declined by 0.9 percent.

Conducted by Target Analysis Group, a Boston direct-marketing consulting firm, the most recent study examined giving by more than 38 million donors who made 68 million donations that totaled at least $1.7-billion. The charities in the survey focus on the environment, health, social services, international relief, and other causes.

Offsetting the decline in the number of contributors, at least to some degree, was an increase in the amount of money given by each donor: The total given by individual donors grew by a median of 3 percent, meaning that half of the donors’ contributions grew by more and half grew by less.

While that growth has helped, “it is likely that if donor declines continue, organizations will not always be able to make up for them with increased giving amounts,” the Target report said.

Already, donations failed to keep up with the pace of inflation during the first three months of this year, the survey found, growing by only 0.5 percent, compared with the 1.2-percent inflation rate for that same period.

The survey did contain some good news for charities: After a spike in giving caused by the Asian tsunamis of 2004 and Hurricane Katrina the following year, the researchers concluded that direct-marketing revenue has returned to typical patterns of growth, about 1 percent on average per quarter. And some organizations, have been able to persuade people who gave for the first time in response to the disasters to keep giving.

Among the other findings:

Over the three-year period ending in March, international relief organizations, for example, increased the number of donors to their organizations by a median of 18 percent. Over the same period, contributions grew by 44 percent, compared with 11 percent for all organizations in the survey.
Animal-welfare organizations also did well over the past three years, with contributions growing by nearly 28 percent. In the 12-month period ending in March, such organizations attracted 8 percent more new donors than in the preceding year, and achieved a 10-percent increase in the number of people contributing overall; meanwhile, contributions grew by 8.5 percent.
Contributions to environmental groups generally mirrored the overall findings of the survey. Although donations for the 12 months ending in March showed a 5-percent increase, the number of all donors to those charities declined by 2 percent, while the number of new donors dropped 4 percent.
Health charities achieved a 1-percent increase in total contributions in the 12 months ending in March. But the total number of donors fell by the same percentage, while the number of new donors declined by nearly 3 percent.

And, over the past three years, health organizations lost more donors, about 6 percent, than any other type of nonprofit group in the survey.
Advocacy organizations fared the worst of all the types of groups in the survey.
Their contributions declined by 5 percent in the year-long period ending in March, while the total number of donors fell by 8 percent, and the number of new donors plunged by 22 percent.