Out of the Weeds and Into the Future

Source:   Carol Rhine, Principal Consultant at Blackbaud; April webinar review of the Blackbaud Charitable Giving Report – How Nonprofit Fundraising Performed in 2014, presented by Steve MacLaughlin, Director, Analytics

What did we learn from our fundraising efforts in 2014 that can be applied in 2015?

In April 2015, Carol Rhine, Principal Consultant at Blackbaud, led a webinar in which she shared key performance indicators from the Blackbaud Report “How Nonprofit Fundraising Performed in 2014”. The Report summarized the highlights for all of 2014 with key benchmarks for overall fundraising and online growth by organizational size and vertical.

In the Report, Steve MacLaughlin, Director, Blackbaud Analytics noted:   “2014 may represent the new normal in giving. Unlike 2013 and 2014, there was a noted absence of the high profile episodic events that previously drove an increase in giving….Nonprofits must continue to focus on both donor acquisition and retention to drive sustainable growth in fundraising.”

In 2014 – overall charitable giving in the US increased by 2.1% YOY (3^rd year in a row increase) with small organizations (annual total fundraising less than 1 million) experiencing the largest growth year over year at 5.8%. The stats demonstrate how small nonprofit organizations with fewer resources have done a great job of learning and applying new technology. The largest sector increase in overall charitable giving YOY was in the Public and Societal Benefit at 9.3%.

Donors continue to shift online even though they are engaged through both traditional and digital channels with an increase in the percentage of total fundraising coming from online donations. In 2014 about 6.7% of overall fundraising revenue was raised online. In 2014 online giving grew 8.9% YOY and that’s on top of 13.5% YOY online giving growth in 2013. Small organizations led the charge with online donation growth of 10.6% compared to 2013.

By giving sector, Higher Education experienced the largest online growth. Double digital online growth was also experienced by Arts and Culture, Environmental/Animal, Healthcare and K – 12 Education. International Affairs was the only sector to experience negative on line growth due to the number of urgent giving crises in 2012-2013 as compared to 2014.

Overall giving distribution by month and sector – the highest performing months were Feb at 7.8%, June at 9.0%, Oct at 8.0% and Dec at 17.4%. Online giving distribution by month and sector – the highest performing months were April at 8.7%, August 11.2% (the ice bucket challenge) and Dec at 17.8%. Surprisingly, online giving in December has shifted down, from 22.4% in 2013. The shift down in December has been a trend for the last 3 consecutive years. There is a purposeful and strategic shift to increase engagement with donors year round – not just at fiscal year- end.

The #GivingTuesday event continues to grow with online donations up 36% compared to 2013 with a 15% increase in the number of organizations that received an online donation on #GivingTuesday 2014.

Key takeaway’s from Carol Rhine:

• Focus on growing sustainers – as the Animal Welfare and Societal Benefit sectors have, which is key to sustainable, long term donor growth and value.
• Focus on increasing the’ ask’ in the mail. Current ‘dollar string’ asks hasn’t kept up with inflation. Since 2009 mail revenue has grown by 5.6% but with revenue dollars adjusted for inflation we’re actually down 2.9%.
• Focus on ways to increase the funnel of newly acquired donors. As nonprofits have shifted their focus from acquisition to retention, the pool of new donors is shrinking as is the pool of recently lapsed donors and the percentage of reactivated donors. The strategy should not be either/ or – but rather acquisition AND retention.