Contributions to Big Charities Drop as Groups Struggle to Recruit Donors
By Holly Hall
Contributor
April 23, 2009 | Read Time: 3 minutes
Donations to 75 of the nation’s largest charities have fallen in the past year, adding to problems caused by a multiyear decline in the number of donors who give in response to direct-mail solicitations, online appeals, and telemarketing, according to a study released last week.
In the past charities could offset the decline in the number of donors because they were succeeding in persuading individuals to give larger sums.
But that trend ended last year: Total contributions fell by a median of 3.3 percent in 2008, meaning that half of the charities fared better and half did worse. The decline comes after giving rose by 3.1 percent in 2007, according to the survey, which was conducted by Target Analytics, the research division of the software company Blackbaud.
“Donor numbers have been falling in the index for at least the past three years, since Hurricane Katrina, but 2008 was the first year since then that revenue declined as well,” said Rob Harris, Target’s vice president of analytic products. “The largest revenue declines were in the fourth quarter of 2008, when economic conditions were at their worst.”
Target’s most recent survey, which is conducted quarterly, provided data for calendar year 2008 and the preceding four years. For the 12 months ending in December, the survey tallied contributions to the 75 charities from 36 million donors, who together gave more than $2-billion in individual gifts under $5,000, and compared the results with those in preceding years.
Number of Donors Declines
By every fund-raising measure, charities in the survey did worse last year than in 2007. The number of new donors they were able to recruit, for example, fell by a median 6.9 percent, on top of a 4.4-percent decline in 2007. Target officials considered the decline in new donors a key reason behind a slump in the number of all donors reported by organizations in the survey.
From 2004 to 2008, the ability of charities in the survey to recruit new donors declined by a median 16.7 percent, while the total number of donors reported by the organizations dropped by a median 5.2 percent.
Total contributions have also fallen. Gifts grew by a median of 17.5 percent from 2004 to 2008, a period that included record sums donated in response to the Asian tsunamis and Hurricane Katrina. But from 2006 to 2008, revenue declined by a median 1.5 percent, and that decline accelerated from 2007 to 2008, when donations fell by 3.3 percent.
Not every type of charity in the survey experienced fund-raising declines last year. Animal-welfare and international relief groups reported median increases in contributions, 5.1 percent and 1.1 percent, respectively, and the number of donors to those causes also grew by a median of 3.1 percent and 1.8 percent, respectively.
Among groups that faced the toughest fund-raising challenges were health organizations, whose contributions fell by a median 7.2 percent and whose number of donors dropped by 6.4 percent last year.
Online Appeals
The survey also examined the growth of online giving compared with other solicitation methods among 59 of the 75 charities in the survey.
Last year, a median of 7 percent of contributions came from the Internet, 4 percent from telemarketing, and 77 percent from direct mail. In the past five years, Internet gifts have grown from a median of 3 percent to 7 percent of total contributions to charities in the survey.
The number of donors recruited online has also grown from a median 4 percent in 2004 to 9 percent last year.
The median amount given in online gifts, $70 last year, was higher than that made in response to direct-mail solicitations ($41) or telemarketing ($46).
A copy of the survey, “Index of National Fundraising Performance: 2008 Fourth Calendar Quarter Results,” is available online at Blackbaud’s Web site.
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HOW DIRECT-MAIL, ONLINE, AND TELEMARKETING GIFTS FARED, 2006-2008
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