Economy’s Slump Takes a Bite Out of Charities’ Direct-Marketing Returns

The economic downturn has caused direct mail and other mass fund-raising methods to decline, intensifying a slump that began a few years ago, according to a new survey of several dozen of the nation’s largest charities.

In the six months ending in June, every measure of the health of direct-marketing appeals declined: total contributions raised, total number of donors, number of new donors recruited, amount contributed per donor, number of donors who made repeat gifts, and number of donors who had stopped giving but were persuaded to renew their support.

This year’s across-the-board decreases are medians, meaning that half of the 77 charities in the survey did better and half did worse. Median declines in all the direct-marketing measures have never before been found in the study, which was started in 2002.

Conducted quarterly by Target Analytics, the research arm of the fund-raising software company Blackbaud, the study evaluated actual giving records for more than 36 million donors who collectively gave nearly $2-billion in the last 12 months. Direct mail accounted for the largest portion of gifts, but online gifts and donations in response to other fund-raising methods such as canvassing were included. Contributions greater than $5,000 were excluded from the analysis.

Donor numbers and other indicators measured in the survey have been gradually decreasing since 2005, but the declines have deepened since the end of 2007 when the recession began.

For example, contributions to organizations in the study declined by a median 7.7 per cent in the first half of 2009 compared to the same period in 2008, when donations were essentially flat with an increase of less than 1 percent. The number of donors fell by a median 3.5 percent from January to June of this year, on top of a 3.1 per cent drop in the first half of 2008.

The researchers attributed the drop in donor numbers to charities’ increasing inability to recruit new contributors: The number of first-time donors fell by a median 7.6 percent in the first half of 2009, compared to a 3.2-percent drop over the same period in 2008.

Some types of charities are weathering the recession better than others, the survey found. For example, although all other types of charities have lost contributions so far this year, social-services organizations saw donations grow by a median 3.4 percent. The researchers attributed the increase to donors’ responsiveness to increasing needs among poor people in hard times.