I am totally embarrassed to admit that I’ve just taken my first look at the 2010 Fundraising Effectiveness Report produced by the Association of Fundraising Professionals.
The Report is based on 1,982 responses from US nonprofits who collectively raised $1.5 billion in 2008-9.
What the Report provides is a focus on net gain (or loss) in fundraising results from this broad range of nonprofits. I don’t want to give the methodology short shrift, but essentially it compares dollar (and donor number) gains against losses in a variety of fundraising program categories, producing a net gain or loss for each organization, and the sector.
For example, ‘gains’ in giving include: $ from new donors, from recaptured donors (former donors who had lapsed), and from upgraded donors. ‘Losses’ in giving include: $ lost from downgraded donors, from lapsed new donors (new donors in the previous year who did not give in current year), and from lapsed repeat donors (repeat donors in the previous year who did not give in current year). Gains/losses in donor counts are measured in a similar manner.
The results in the 2010 Report are, well, depressing.
Bottomline: for every $4.50 that organizations raised in new gift dollars in 2009, more than $6 was lost through donor attrition. As a result, the year-over-year ‘growth’ in giving for 2008-9 was -8.1%. For the same period, there was a net decrease in donors of -0.8%, reflecting gains of 54.2% offset by losses of -60.2%. That’s a heap of churn, boys and girls!
What I like about this report and its underlying methodology is that it provides some detail as to where most of the gains and losses occurred. For example, for these organizations, 20% of their total gain in donors came from recapturing lapsed donors. One might ask … why lose them in the first place?!
This is a very meaty report. I urge you to download and study it carefully. And apply its methodology to analyzing your own nonprofit’s gains and losses. How do you compare with the sample?
The project and study are described in this article from SOFII’s Blog by Kirsten Bullock. Thanks for waking me up Kirsten!
Tom
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Interesting report indeed. Thank you very much for sharing.
Thanks for the mention Tom. Glad I was able to prompt you to check it out. I’m a bit of a data geek, so I love those kinds of things.
I am so glad you finally found the FEP report! It is perhaps one of the most powerful and accurate indexes/reports in the non-profit field because it is produced from actual data contained in real fundraising software systems. More importantly, it truly reflects the entire market, not just the top 2,000 or 5,000 charities. There are NPO’s ranging from less than $100,000 in annual revenue and up. In fact, when I was last involved with it, due to about 60%+ of the data coming from eTapestry customers, the average size organization was probably less than two million a year in annual revenue.
There are few reports that truly reflect the ENTIRE market like this one! Please allow me to give a strong pat on the back to AFP for making this come to life. Now if we could just get more NPO leaders to act on it. It is such a shame that the charities do not all focus as much on retention rates as all of the software vendors in the world do. Most software executives would fire any customer support and account management team leaders who ever let the retention rate fall below 90%. Many software firms average 95% or higher! Could you imagine how much money would be raised in the world if we could even get the retention rate to 75%!!