63 Percent of Charities Predict an Increase in Giving in 2011, says Report
Giving to most charity fundraisers stayed the same or increased last year, according to a new survey released by the Nonprofit Research Collaborative, a coalition of six organizations that study or represent non-profits and fundraisers on Tuesday. However non-profit officials and charities said that gifts did not increase as much as they had hoped, given the economic recovery.
The study asked about two key measures of fundraising—the percentage of organizations reaching their fundraising goals and the percentage of charities raising more funds in one year compared to the previous year. In the NRC survey about 2010, just 52 percent of organizations reported reaching their fundraising goals that year. In a survey conducted by the Association of Fundraising Professionals (AFP, a member of the NRC) about 2009, 53 percent of charities reported meeting their yearly fundraising goals that year.
63 percent of the more than 1,800 organizations studied said they expect private donations to rise in 2011. Nearly two-thirds said they do not plan any increases in the number of fundraising staff members this year.
The study pointed out that the fundraising situation for these causes was more stable in 2010 than in 2009, when many of the charities were reeling in the wake of the 2008 recession. While only 11 percent reported that they had raised about the same amount of money in 2009 as they did back in 2008, 24 percent said they had raised as much money in 2010 as in the previous year.
The percentage of charities that said their donations declined fell from 46 percent at the end of 2009 to 33 percent at the end of 2010.
"While many organizations stopped the bleeding, giving simply didn't rebound like we thought it might, especially given the economic growth we saw in the last quarter of the year," said Paulette Maehara, president of the Association of Fundraising Professionals, one of six organizations that make up the research collaborative. "Despite the unexpectedly flat fundraising results that charities reported, the survey showed that success was more likely when organizations invested resources in fundraising staff and infrastructure, including volunteer management."
Spending More Pays Off?
According to the survey, three-quarters of the organizations that increased their spending on fundraising activities saw collections rise. Almost half of the organizations that increased their spending on fundraising by 15 percent or more saw contributions increase by 15 percent or more.
This does not point out if there was even a return on their investment. So, you increased the spending on advertising (those dollars donated to your organization for ‘projects' most likely) and you saw an equal increase in contributions?
Let's say organization X spent $15,000 on advertisements and increased their contributions 15%, which was up from $10,000, that is only $1,500 and a loss of $13,500 that could be used to feed multiple families in poverty, rescue animals, provide clean water to villages in Africa, etc. This type of scenario would not be productive and an utter waste of resources.
The survey also showed that online giving produced the most growth out of all types of solicitations charities use. Of course, it should. Fundraising online is much more easier, requires less time, and is overall much more productive for organizations. It's easier to track the results of fundraising campaigns and see what works, what doesn't, and allows you to measure very accurate results.
Online giving rose for 58 percent of organizations that use the Internet to seek donations by running online fundraising campaigns.
Net proceeds from special events rose for half the organizations that use that approach; efforts to seek big gifts also rose for half of the groups.
Less than half the groups that sought foundation grants, sent direct-response appeals such as mail and e-mail messages, or solicited gifts from board members or corporate contributions saw increases in those categories.
The study did not point out how much of an increase those organizations realized, nor is it completely accurate in its findings. While only aggregating data from several resources, which accounted for ONLY 1800 organizations, there are still more than 1.5 million other registered 501 c3 non-profit organizations that data was not gathered from.
The large organizations that are all most likely surveyed account for incredibly high amounts of overhead and are notorious for being inefficient with their fundraising and giving. Many of which are not effectively fundraising online to be more productive with time, capital, and return on fundraising efforts.
The way people give to causes is changing. More and more people would like to see transparency with the non-profits and charities they give to. Instead of giving $100 and having no idea where it goes, yet most likely 99% to salaries and other expenses, while 1% gets distributed to actual causes, donors would like to see that if I give $100, there will be tangible evidence that my contribution was used for this project, and this was the result, etc.
There is a shift in the way people give and will continue to gain momentum over the coming years, as online fundraising campaigns by causes, big and small continues to grow. More donors will donate to smaller, flexible, and more efficient causes, opposed to the very big ones that have proven to be not as effective, when measured pound for pound to the smaller ones.
For example, if a smaller non-profit is fundraising to raise money online for a project to build a school and fresh water system that will allow a community of 1,000 people in Kenya to be self-sufficient for $40,000, and will take 90 days to complete, would you donate to them, if they have proven results with other projects, good donor feedback, and pictures and videos to back it up?
Or, would you donate your $100 to the American Red Cross for example, as they do not point out where and how exactly the money will be spent for a cause such as the Japan Earthquake Relief Efforts? Most likely it will go to salaries, events, and other expenses, as maybe $1 or so gets passed on those in need.
The times and way people are giving is changing, while the Internet and cause transparency will be major fuel for this momentum in the coming years. For donors that are debating on what cause to give to, it is highly suggested to do some research on the organization and understand the percentage of donations that go to what part of the organization. This will help you decipher what cause is more effective in helping those that need it.
The study asked about two key measures of fundraising—the percentage of organizations reaching their fundraising goals and the percentage of charities raising more funds in one year compared to the previous year. In the NRC survey about 2010, just 52 percent of organizations reported reaching their fundraising goals that year. In a survey conducted by the Association of Fundraising Professionals (AFP, a member of the NRC) about 2009, 53 percent of charities reported meeting their yearly fundraising goals that year.
63 percent of the more than 1,800 organizations studied said they expect private donations to rise in 2011. Nearly two-thirds said they do not plan any increases in the number of fundraising staff members this year.
The study pointed out that the fundraising situation for these causes was more stable in 2010 than in 2009, when many of the charities were reeling in the wake of the 2008 recession. While only 11 percent reported that they had raised about the same amount of money in 2009 as they did back in 2008, 24 percent said they had raised as much money in 2010 as in the previous year.
The percentage of charities that said their donations declined fell from 46 percent at the end of 2009 to 33 percent at the end of 2010.
"While many organizations stopped the bleeding, giving simply didn't rebound like we thought it might, especially given the economic growth we saw in the last quarter of the year," said Paulette Maehara, president of the Association of Fundraising Professionals, one of six organizations that make up the research collaborative. "Despite the unexpectedly flat fundraising results that charities reported, the survey showed that success was more likely when organizations invested resources in fundraising staff and infrastructure, including volunteer management."
Spending More Pays Off?
According to the survey, three-quarters of the organizations that increased their spending on fundraising activities saw collections rise. Almost half of the organizations that increased their spending on fundraising by 15 percent or more saw contributions increase by 15 percent or more.
This does not point out if there was even a return on their investment. So, you increased the spending on advertising (those dollars donated to your organization for ‘projects' most likely) and you saw an equal increase in contributions?
Let's say organization X spent $15,000 on advertisements and increased their contributions 15%, which was up from $10,000, that is only $1,500 and a loss of $13,500 that could be used to feed multiple families in poverty, rescue animals, provide clean water to villages in Africa, etc. This type of scenario would not be productive and an utter waste of resources.
The survey also showed that online giving produced the most growth out of all types of solicitations charities use. Of course, it should. Fundraising online is much more easier, requires less time, and is overall much more productive for organizations. It's easier to track the results of fundraising campaigns and see what works, what doesn't, and allows you to measure very accurate results.
Online giving rose for 58 percent of organizations that use the Internet to seek donations by running online fundraising campaigns.
Net proceeds from special events rose for half the organizations that use that approach; efforts to seek big gifts also rose for half of the groups.
Less than half the groups that sought foundation grants, sent direct-response appeals such as mail and e-mail messages, or solicited gifts from board members or corporate contributions saw increases in those categories.
The study did not point out how much of an increase those organizations realized, nor is it completely accurate in its findings. While only aggregating data from several resources, which accounted for ONLY 1800 organizations, there are still more than 1.5 million other registered 501 c3 non-profit organizations that data was not gathered from.
The large organizations that are all most likely surveyed account for incredibly high amounts of overhead and are notorious for being inefficient with their fundraising and giving. Many of which are not effectively fundraising online to be more productive with time, capital, and return on fundraising efforts.
The way people give to causes is changing. More and more people would like to see transparency with the non-profits and charities they give to. Instead of giving $100 and having no idea where it goes, yet most likely 99% to salaries and other expenses, while 1% gets distributed to actual causes, donors would like to see that if I give $100, there will be tangible evidence that my contribution was used for this project, and this was the result, etc.
There is a shift in the way people give and will continue to gain momentum over the coming years, as online fundraising campaigns by causes, big and small continues to grow. More donors will donate to smaller, flexible, and more efficient causes, opposed to the very big ones that have proven to be not as effective, when measured pound for pound to the smaller ones.
For example, if a smaller non-profit is fundraising to raise money online for a project to build a school and fresh water system that will allow a community of 1,000 people in Kenya to be self-sufficient for $40,000, and will take 90 days to complete, would you donate to them, if they have proven results with other projects, good donor feedback, and pictures and videos to back it up?
Or, would you donate your $100 to the American Red Cross for example, as they do not point out where and how exactly the money will be spent for a cause such as the Japan Earthquake Relief Efforts? Most likely it will go to salaries, events, and other expenses, as maybe $1 or so gets passed on those in need.
The times and way people are giving is changing, while the Internet and cause transparency will be major fuel for this momentum in the coming years. For donors that are debating on what cause to give to, it is highly suggested to do some research on the organization and understand the percentage of donations that go to what part of the organization. This will help you decipher what cause is more effective in helping those that need it.
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