Sound the Alarm?

As it does every year, the Giving USA Foundation released its annual study of giving in the USA, and it reported charitable giving dropped 2% from 2007 to 2008. Here's a Washington Post article, along with the actual press release. Though a drop of 2% sounds reasonable considering our country's current economic turmoil, the drop could actually become much worse in 2009- read on if you dare!

Back in December of 2008, I blogged about our analysis that showed DonorPerfect clients donations were actually up 4% in the preceding 12 months (October 2007-October 2008). Using the same data analysis technique and aggregating our clients' results, we now show that overall giving for DonorPerfect clients for the entire calendar year of 2008 vs. 2007 remained relatively flat, increasing .5% (the mean result was -.8%). Note that this is higher than the Giving USA data, and it’s consistent with our multi-year analysis that shows DonorPerfect fundraising software clients improve their fundraising results by 1% to 2% above the national average of all non-profits.

Given that our clients were up 4% in the first 10 months of 2008, the flat results for the year mean that fundraising was down significantly in November and December. Our analysis shows a drop of nearly 18% in that two month period, an unprecedented decline.

What's does that mean for 2009? Well, our analysis for the 1st quarter shows an 8.4% decline vs the prior year. This shows improvement from the huge drop at the end of last year, but unless this improving trend continues, there is a good chance that overall giving in the USA in 2009 may be down more than 2008’s -2%, perhaps even as low as -10%!

The obvious fear is that cash-strapped nonprofits will need to reduce services at the very time when they will be needed most.

The good news is that this does not have to be a foregone conclusion. After all, Americans are still some of the most generous people in the world. Our data shows that there are still many nonprofits that are maintaining – even growing their donation levels using DonorPerfect. Yes, it may be harder to reach your goals in 2009, but there are still many opportunities to reach out to supporters with a compelling message and achieve success.

It's Not Too Late to Fundraise in 08!!!

Now more than ever, your organization needs funds- what better way to get them than from your committed donors- especially those that lapsed in the final months of 2008.

These donors, traditionally called LYBUNT (for Last Year But Unfortunately Not This year) is a goldmine for your organization to target. If they gave in 2007 but not in 2008, why didn't they respond? What is it temporary? Perhaps things have changed?

I have the fortune to be involved in several community organizations, and in one of them, I emailed them two weeks ago to target their LYBUNT donors. Since they use DonorPerfect Online, it was easy- simply create a filter where Last Year's Calendar Year Giving (2008) = 0 and 2 Years Ago Calendar Giving > 0.

(We use last year and 2 years ago because we are running this in 2009. If we use Current Calendar Year To Date, it would only include those donations this month in 2009- that's not what we want)

We then created a Word template and used the automatic-merge functionality in DonorPerfect and mailed the letters. We used a very emotional story soliciting funds from our once dedicated supporters.

The end result? Guilt works. We hit a home run and raised an additional 12% of our annual 2008 total that we would likely not receive in the future. Best of all, these donors became re-activated donors, ready to give again in the future.

So go ahead, blame the economy but DO something about it. Use the LYBUNT feature in your fundraising software (like DonorPerfect) to raise more money!

Giving UP in 2008 vs. 2007!

We just completed an initial analysis of giving patterns based on our current client base. Since we host the data for DonorPerfect Online, we're able to aggregate thousands of client's databases and provide some fairly interesting statistics.

For example, we know that in the last 12 month period, giving for DonorPerfect clients is actually up 4%. For those that just started using our fundraising software, the increase is even more dramatic, up 24%! These statistics are very similar to past years.

Probably the most interesting statistic was the following: Giving for DonorPerfect Online customers actually grew by 5% from Sept-Oct 2008 vs. the same period in 2007. In other words, despite the meltdown of the stock market, giving still increased during the same period over last year.

What does this mean??? Well, for one it's not all doom and gloom in the non profit space- certainly not to the extent that the main-stream press tells the story here and here. It's more like this great story about Americans still giving in uncertain times.

In fact, according to Giving USA, we find that:

Total giving in the United States has risen every year in current dollars
but one since recording began (in 1969). The exception was 1987, when a
tax change law the previous year prompted some people to "give early," so they
could maximize the value of tax deductions they could claim.

Source, "Giving during Recessions 2008", by Giving USA Foundation

Clearly, the sky is not falling, and while there are certain segments of the non-profit sector hurting (such as Food Banks), the overall sector is still in good shape.

While the numbers are not in for the all important giving months of November and December, I do think we should all take a deep breath, execute our carefully laid out fundraising plans, and record and analyze the information, hopefully with a great tool like DonorPerfect CRM Fundraising Software.

Since it takes a few weeks for all non-profits to enter all of their gifts, I'll be revisiting this topic in late January. For now, with history on our side, let's face the future with a more optimistic and balanced view of our donors.