Yesterday, Target Analytics published its Index of National Fundraising Performance for the 12 months ending December 31, 2010.

Not a pretty picture. And frankly, if I were the CEO or a Board Member of one of the 83 big organizations included in this Index, I’d probably be looking for some new resumes to replace some of my status quo fundraisers.

For the 5th straight year the majority of the large organizations included in the Index – those where the dominant revenue source is direct response – have experienced another lackluster or downright disturbing year.

  • Real Index revenue has declined by 13.0% over the past five years, and by 6.9% over the past three years when revenue dollar amounts are adjusted for inflation.
  • Over the past five years, new donor numbers have fallen by a cumulative median of 10.3% — that’s an annual decline of 3.6%
  • And…there’s been little success at making up the loss through better retention. Retention of first year donors continued to drop again in 2010 with only 46% of the organizations reporting an improvement (0.02%) in retention rates.

With less water flowing into the bucket and little change in the outflow where’s all this going, other than down? The more important question is why is this happening.

  • It’s easy to blame it on the economy (but this trend was underway before the economy headed south in 2008).
  • And easy to simply shrug and say, “Well, my sector is doing less bad.” (Not true, unless you can take credit for earthquakes, genocide, and war; only the animal welfare folks are truly ‘up.”)
  • Or perhaps use a little sleight of hand and blame it on online – “You see, there’s a lot more money coming in online and this is cannibalizing other programs.” Not enough. According to the Index the number of new donors has risen from a bit more than 5% in 2007 to a bit more than 7% in 2010.  Barely enough to stay even.

In fact, there are no easy explanations for why the big 83 are in a downward spiral; only questions. But questions which need to tackled head on:

  • Are the large, old organizations that make up the majority of the Index losing their relevance and support?
  • Is there a problem in the fact that most of these organizations build a large part of their declining acquisition programs by exchanging names through cooperative data bases and other ‘take in each others’ laundry’ resources?
  • Has the quality and innovation of direct response programs declined to the point where ‘cookie cutter’, same-old-same-old plans are simply recycled year after year, to the point where perfection of predictability (despite the declining bottom line) has become the enemy of growth and sustainability?
  • Could it be that the rising numbers of new online donors reported in the online studies we’ve reported in The Agitator, are simply not being captured, integrated and monetized through the multi-channel programs that everyone gives lip service, but almost no one ever gets around to implementing?

I suspect it’s a combination of all of these technical reasons. But, mostly I suspect the real culprit is the inability or unwillingness of boards and CEOs to expect more, invest more and demand more from those charged with bringing up the bottom line.

What do you think?


P.S.  As always, the detailed analysis by the veteran team of Helen Flannery, Rob Harris and Carol Rhine at Target Analytics is worth a thorough read with special attention to the reports on individual sectors. You can get their report here. Go ahead.  Share it with your CEO and Board.

This article was posted in: Direct mail, Nonprofit management.
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