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.

A Recipe for Fundraising Disaster...

What's the worst thing a non-profit organization can do to jeopardize it's long term fundraising success?

Stop fundraising.

Seems simple right? If you stop fundraising, you'll not only lose money now, but also lose future donors (and their future donation stream) not just once, but forever. After all, just run a recency report in DonorPerfect fundraising software and you will clearly see that the #1 reason why a donor gives again is directly related to the time since their last gift. That is, the longer the time length between today and their last gift, the less likely they will ever give again.

Yet I see organization after organization delaying or canceling their fundraising events. Why? Because they feel they need to give their donors a 'rest', likely because of the economy, and that the donors will be 'refreshed' if they wait.

My friends, that's not how it works. While it's true that some donors may respond favorably this way, you can't ignore statistics because the vast majority will not. Every day that goes by without a donation from your donors is another lost donor(s) that will not renew their giving.

Stick with your plan- keep fundraising. Even if the results are down year-over-year, you are still much better off by retaining donors so that they will give again, and again, and again, and again.