At the very time when the stock market is dropping, unemployment is rising and fundraisers are attempting to read the tea leaves in preparation for next year’s budgets, Target Analytics has released their Index of National Fundraising Performance for the 1st Quarter of 2008 … and the picture ain’t pretty.

Not only did the number of direct response donors continue to decline, but, for the first time, the increases in revenue per donor that have compensated for the decline in number of donors failed to prevent an overall revenue drop.

The Index’s authors say the falling donor populations “may be due to a mix of factors including economic changes, a changing generational profile in the United States, changing attitudes of donors about giving, and a change in focus by fundraisers toward higher-dollar donors.

Whatever the reasons the numbers are a bit spooky:

·The number of new donors has declined 7.6 % over the past two years. (However, the rate of decline has slowed from 5.3% in the first quarter last year to 2.3% in this first quarter of 2008.)

·Retention rates continued to fall with first-year donor retention dropping 6.6% in Q1 2008 over the same quarter a year before.
·And reactivation rates declined 5.0% from Q1 2007 to Q1 2008.

Among the 72 organizations included in the Index only those in the environmental and animal welfare sectors escaped the pain. For advocacy groups (what Target Analytics calls the “Societal Benefit Sector) there is sunshine among the clouds. New donor growth rose 6.1% in Q1 2008 with 69% of the organizations in this sector showing positive donor growth.

The news wasn’t as encouraging for groups in the International Relief Sector where new donor acquisition declined 23%–the greatest decrease of any sector –and reactivation rates were down significantly as well, falling 21.6% from Q1 2007 to Q1 2008.

And we shouldn’t be looking for clear skies and a return to growth in the near-term future. As the economy slows, so does giving.

Now’s the time to take another look at next year’s budget and make sure you’re spending more, not less, to achieve on donor satisfaction and loyalty to hold on to your base.

Roger

 

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This article was posted in: Demographics, Direct mail, Donor retention / loyalty / commitment, Nonprofit management, Research.
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