Donation Revenue Jumped 2 Percent in 2014, Survey Finds

Revenue from charitable donations made through Blackbaud rose 2.1 percent in 2014, the third consecutive year of growth, the fund-raising software company reported today.

Though less than half of 2013’s 4.9-percent increase, last year’s growth is significant because 2014 had no notable “high-profile episodic events,” like a natural disaster, that can drive giving, said Steven R. MacLaughlin, director of analytics for Blackbaud. In contrast, Hurricane Sandy boosted donations in 2012, while the Boston Marathon bombings, Midwest tornadoes, and Typhoon Haiyan in the Philippines prompted giving in 2013.

Blackbaud’s report showed a similar pattern of growth for online giving in 2014. It increased by 8.9 percent, though fell short of the 13.5-percent boost recorded in 2013.

Over all, nonprofits raised 6.7 percent of their donations online. That figure’s small, Mr. MacLaughlin said, but comparable to federal estimates of e-commerce retail sales.

Blackbaud’s overall giving data are drawn from 4,798 U.S. nonprofits, and the online-giving growth data come from 3,724 nonprofits that have used Blackbaud for at least 24 months. The online giving percentage data come from 4,484 nonprofits.

Small-Nonprofit Growth

For the past few years, organizations that Blackbaud classifies as small—those raising less than $1-million a year—have been growing at a faster rate than medium-size ($1-million to $10-million) and large groups (more than $10-million).

That held true in 2014, with small nonprofits raising 5.8 percent more money over all and 10.6 percent more online. This compares to 1.3 percent over all and 9.7 percent online for medium nonprofits and 1.3 percent over all and 8 percent online for large nonprofits.

Small organizations also raised a higher proportion of their donations online (7.4 percent) than medium (5.6 percent) and large nonprofits (7.2 percent).

The figures aren’t surprising, Mr. MacLaughlin says, as small organizations are growing faster than medium and large groups. “I think that smaller nonprofits have a tendency to be more agile, and they’re using newer technology. Their DNA has digital in it, and they just know how to behave this way,” he said.

Giving Varies by Sector

The Blackbaud report’s sector analysis found that while giving to international-affairs and health-care organizations decreased over all (by 1.1 percent and 3.8 percent, respectively), all other sectors saw growth, most notably public- and society-benefit nonprofits, which raised 9.3 percent more money in 2014 than in 2013.

“During a recession, a lot of giving goes to public- and society-benefit nonprofits, so it’s interesting they remain strong,” Mr. MacLaughlin said.

He also said that arts and culture groups, which saw overall giving increase by 3 percent and online giving by 12.3 percent, have had a few strong years, despite attracting only 10 percent of all charitable giving.

Keeping with a Blackbaud-reported trend, medical research nonprofits received 18.5 percent of their donations online, the highest percentage of any category by almost 10 percentage points. Mr. MacLaughlin credits this strength to walk and run fundraisers, like Relay for Life, that started shifting online as early as 15 years ago.

Faith-based nonprofits received 8.8 percent of their donations online, the second-highest figure.

Ice-Bucket Effect

The percentage of donations raised in December decreased in 2014 for the third consecutive year. Mr. MacLaughlin views this as a positive sign: Nonprofits are diversifying beyond end-of-year fund-raising, he said, and searching for ways to bring in money throughout the year.

One such effort was the ALS Association’s ice-bucket challenge. That campaign spiked summer online donations and made August the most lucrative month for online giving to medical-research nonprofits. More than 20 percent of the sector’s total online donations were made that month, compared to 5.5 percent in December.

Over all, Mr. MacLaughlin says, the ice-bucket challenge did not skew the results of online giving in 2014 or have a negative impact on other groups’ online donations.