It is my pleasure to provide this report which is the result of a survey completed in January 2011. This report was completed in association with The Association of Fundraising Professionals. The survey was completed by Kevin Johnson, Principal, Retriever Development Counsel, LLC and Stephanie Debner, Information Analyst / Writer. The title of the survey is 2011 Nonprofit Fundraising Trends.
Individual giving was a key factor in 2010.
For groups that reported higher fundraising results, they identified individual giving categories in four out of the top five factors that caused total contributions to increase: individual giving (64%), more major gifts (34%), gifts from individuals were bigger (29%), and more members/more annual funds (27%).
The combination of individual giving and more members/more annual funds points to one of the big trends of 2010: there were more small and medium-sized gifts from a greater number of donors. The message to donors is that everyone can and does make a difference. This is a tremendous opportunity for nonprofits, since there are far more donors who can give at these levels than at the highest levels. The down side is that it also means that the cost of fundraising is now greater, since groups have to interact with greater numbers of donors to raise comparable dollars.
For groups that reported lower fundraising results, the two top factors were smaller individual gifts (64%) and fewer individuals contributing (52%). Rounding out the top five factors for decreases are smaller corporate support (44%), smaller private foundation grants (42%), and discontinued foundation grants (26%).
Results by subsector: All subsectors had more groups with increased or flat contributions than decreased contributions in 2010.
Results by group size: In each bracket of group sizes, there were twice as many groups that had increased or flat contributions than decreased contributions. Groups with a budget of $3-5 million stood out this year, as 68% reported increased contributions. This is good news for these mid-size groups, since 67% of these groups reported decreased contributions in 2009. What made these groups different from others this year? A significant number increased staffing related to development (48%) and increased their proposals to major individual donors (60%), with the result that 65% of these groups reported that individuals gave more to them.
Big campaigns = the return of optimism? More than twice as many organizations have comprehensive or capital campaigns planned for 2011: 58 as compared to 23 in 2010 and 34 in 2009. Most will be launched on schedule and none will be cancelled. Projects range from capacity building and enhanced programming to buildings and land purchases.
Morale is improving . . . kind of. While morale has not fully rebounded, it has improved over 2009 and 2008. 36% reported decreased morale, compared to 47% a year ago and 30% two years ago. No group size or subsector shows evidence of having much lower or higher morale compared to the rest.
While staff reported increased morale (28%) and no effect (35%), both of which are improvements over early 2010 (24% and 28%, respectively), morale is still down compared with early 2009 (33% and 37%, respectively). Compared to previous surveys, fewer respondents reported concern over losing their job.
Normally, it might be expected to see a correlation between increased fundraising results and higher morale, but that didn’t seem to be the case. Of groups reporting increased morale, 48% had had a modest increase in total contributions (5-24%). However, for those who reported decreased morale, 36% reported flat contributions (+5% to -5%), and 29% reported a modest increase in total contributions. Furthermore, for those who reported that they were somewhat or very concerned about losing their jobs in the next year, the majority reported that total contributions to their organization increased modestly, were flat, or decreased modestly.
This data supports the experience that many groups are having to work harder, spending both more time and money to achieve fundraising results. Over time, working harder and not seeing that work pay off is demoralizing and also contributes to feeling insecure about one’s job.
“It’s the economy, stupid.”Or is it? While the economy certainly plays a role in fundraising-and some communities are struggling more than others – Retriever’s survey data from the past three years indicates that this recession is not a death knell for philanthropy. It is too easy to blame poor fundraising results on the economy without critically examining organizational practices and donor engagement, including assumptions made by those doing fundraising. As one respondent said, “Volunteers tend[ed] to think the economy would prevent donors from donating. Prospects [were] not asked.” It should go without saying that if you don’t ask, you don’t get.
2010 Lessons Learned
Is flat the new up? In the words of one respondent, “We have to work twice as hard to convey the impact of each gift, to ask (and get) increased gifts, and to ask more people in order to see any growth in our overall results.” Groups are finding that they have to spend more time and resources to raise money. 2011 is no time to cut fundraising budgets or staff, unless groups want it to be even more difficult to raise funds. In 2010, fundraising activities were held at a very high level: the numbers of grant requests to foundations, proposals to individual donors and corporate requests increased significantly.
Other key themes for the year:
• Keywords: persistence, consistency, outreach, communication, relationships, and focus.
• Build and maintain relationships with funders and supporters; communicate with them via frequent, focused, and personalized messages.
• Follow donor cultivation with meaningful, targeted solicitations and planned asks in specific amounts.
• Donor appreciation is not only as a good relationship-building practice, but also as essential to fundraising: “There is a direct correlation between the numbers of ways you can say thank you and increased contributions.”
• While there was a strong focus on individual donors, many respondents also pointed to their need to diversify their funding sources and indicated corporate support and major donor support as key targets for 2011.
• Groups – especially those without dedicated development staff – are looking to board, volunteer, and general staff participation in fundraising.
2011 Budget
When compared to their 2010 budget, 56% said that their budget for 2011 will increase, 25% said it will stay the same, and 16% said it will decrease. These figures are slightly more optimistic than those reported by the Nonprofit Research Collaborative in November 2010: they reported that 47% of groups planned budget increases, 33% would stay the same, and 20% anticipated a lower budget.
Messages for Leaders
Leaders: The new message this year is that leaders need to delegate: not only should they leave the program and operations work to staff so they can focus on the big picture and fundraising, but they should also support and empower staff and volunteers to fundraise. As one respondent put it, “The greatest challenge I see is that leaders – especially founders – have trouble letting go. More often than not, this ‘holding on’ makes it difficult to fully implement and realize the potential of a fundraising plan.”
Boards: Give, get, or get off. Create a culture of philanthropy, led by 100% board giving. Be more proactive with relationship building and focus on fundraising. Boards still have much lower confidence ratings than leaders or fundraising and development leadership. The past three years have been a time of “all hands on deck” for nonprofits:
Retriever’s survey has consistently shown that a significant percentage of boards have not taken this opportunity to shine; in fact, it appears that many barely show up. The overall message is that everyone on the board needs to be actively involved in their organizations, primarily through participating in fundraising (especially with major gifts), cultivating relationships, being ambassadors for the organization, and playing an active role in asking for money. There is also a greater call for accountability to follow through on their own commitments and to create fundraising goals to which they will hold themselves and the organization responsible.
Fundraising and Development Leadership: Get out of the office to spend time with donors and to build relationships. Groups may need to hire support staff or leverage the organization’s human resources better by delegating non-development duties/activities to others, training other staff, and/or developing the board and volunteers to help with development activities. As one person wrote, “Support building a team. Facilitate team meetings. Build and strengthen team confidence through recognition of the team effort, no stars.”
Expanded Discussion: 2010 Fundraising Results
Overall, more groups reported higher contributions (45%) than lower contributions (25%). Though the majority of respondents fall towards the middle of the spectrum here, groups reporting modest increases are nearly double those reporting modest decreases. A modestly higher percentage reported contributions staying the same in 2010 (29%), compared to 2009 (19%). These regional results paint an even brighter picture than recent national figures, which show increased contributions at 36% (8% increased greatly, 28% increased modestly), 26% stayed the same and decreased contributions at 37% (14% decrease greatly, 23% decreased modestly)*
*The Nonprofit Research Collaborative. November 2010 Fundraising Survey. foundationcenter.org/gainknowledge/research/pdf/nrc_suvey2010.pdf.
Note: this survey compared the first nine months of 2010 with the same period in 2009.
Results by subsector: All subsectors had more groups with increased or flat contributions than decreased contributions in 2010, in contrast to surveys done in 2010 by Retriever Development Counsel and in mid-2009 by the Oregon Community Foundation. The Health and Culture/Recreation subsectors saw the most even distribution of groups across this scale, while Social Services, Education, and Environment were most heavily weighted towards increased contributions.
Results by group size: In each bracket of group sizes, there were twice as many groups that had increased or flat contributions than decreased contributions. Groups with a budget of $3-5 million stood out this year, as 68% reported increased contributions. This is good news for these mid-size groups, since 67% of these groups reported decreased contributions in 2009. What made these groups different from others this year? A significant number increased staffing related to development (48%) and increased their proposals to major individual donors (60%); additionally, 65% reported that individuals gave more and 41% said that foundations gave more grants. Another exception is groups with budgets of less than $500,000: their distribution along the scale forms a perfect bell curve.
I hope you find this information helpful.
John Betz
Principal
Vital Data Management, Inc.
591 North Avenue
Wakefield, MA 01880
jbetz@vdmmail.com
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