Sector Report: Fundraising 2009-2010

In 2010, nonprofit fundraisers should build on their wins from 2009 and find new ways to tell their donors how important they are.

Steve MacLaughlin, director of Internet solutions, Blackbaud
I think the climate is one of cautious optimism across the nonprofit sector. The end-of-year fundraising push will certainly influence what happens in 2010. Things are usually never as good as or as bad as people think.

Whether things are looking up really depends on geography and your fundraising mix. With our clients in the United Kingdom, Europe, Asia/Pacific and Canada, there has been more insulation from some of the donor attrition being experienced in the United States. Charities in these countries do substantially more recurring giving in smaller amounts. This means they have not been as impacted by changes in major giving, but they still are being cautious about program expenses.

The barometer to look at would be the Target Analytics Index of National Fundraising Performance (http://www.blackbaud.com/targetanalytics/benchmarking/nationalindex.aspx). The index predicted and indicated when the recession hit the nonprofit sector by showing declines in new donors, lower donor-retention rates and a drop in giving amounts. When we see a few strong quarters, then it probably means the worst is over.

There were a couple of different challenges faced by fundraisers in 2009. One major challenge was the substantial drop in endowments because of stock-market volatility. This increased pressure to raise funds to provide a short-term offset to these losses. An ongoing drop in new donors also has impacted the ability for nonprofits to make up for donor attrition.

This balance between acquisition focus versus retention focus is a major challenge or opportunity for nonprofits. If your organization was too acquisition-focused, then you likely were hit harder by the economy. If your organization was retention-focused, then you were probably less impacted. Our research and customer feedback has indicated that organizations leveraging their CRM tools are seeing donor retention holding steady, but with lower gift amounts than in previous years.