Number Of Donors Dived In Third Quarter

January 14, 2013       Patrick Sullivan      

Donor revenue fell by 2 percent between the end of the third quarter of 2011 and the end of the third quarter of 2012. The number of donors declined by 3.2 percent in the same period. Those are some of the results of Target Analytics donorCentrics Index of National Fundraising Performance 2012 Third Calendar Quarter Results (Q3 Index).

“What you see overall is pretty sluggish performance with everybody except for societal benefit (organizations),” said Carol Rhine, principal fundraising analyst for Target Analytics, based in Cambridge, Mass.

The Q3 Index analyzed direct marketing giving from 75 organizations. In total, those nonprofits received 78 million gifts from 37 million donors for total revenue of $2.3 billion. The results were compared to the end of the third quarter of 2011, as well as three-, four- and five-year views. Results were further broken down into subsectors, like arts, health and societal benefit organizations. The Q3 Index looks at direct marketing fundraising only, and excludes major gifts, corporate gifts and event revenue.

Some 43 percent of surveyed organizations saw revenue increases, with the balance — 57 percent — experiencing declines. Sector-wide, revenue per donor increased 1.1 percent. “Revenue per donor was among the last measures to go down in the recession,” Rhine said. “With that upturn, that’s an indicator that we might be turning things around.”

Donor retention rates were down by 0.7 percent, and new donor acquisition rates were even lower, a decline of 3 percent. The five-year rate of new donor acquisition was down by 22.6 percent. “The continued decline of new donors is troubling,” said Rhine. “That’s the challenge going forward, to encourage people to become donors and give to more organizations.”

Societal benefit organizations, those nonprofits with missions related to civil rights and civil liberties, had the strongest year. Revenue for those organizations was up 9.8 percent by the end of 2012’s third quarter, beating its third quarter 2011 gain of 7.5 percent. The sector increased its number of donors by 13.6 percent, and its new donor acquisition rate was 37.1 percent, by far the highest gain of any sector in any metric.

“(Societal benefit organizations) have done well in the past when there are big political issues around,” said Rhine. “When their issues get to high public discussion levels, they get more donors. One thing we’ve seen in the past six or seven years is current events influence fundraising a lot more than they used to.”

International relief organizations had the sharpest revenue decline, 11.8 percent. The study’s authors contend this is more of a normalization after huge giving to these organizations in 2010 and 2011 around the Haiti and Japan earthquakes, as well as the famine in the Horn of Africa, rather than a true decline. That subsector saw a 7.1 percent decline in new donors, after a 57.3 percent decline in 2011, again mostly related to the Haiti earthquake.

Rhine said she feels the sector is on the road to recovery, but building up donor files will be key. Before the recession, she said, donor counts were already declining, but revenue could grow because revenue per donor was increasing. “When the recession hit, the donor decline was faster and revenue per donor increases couldn’t keep up,” she said. “You have to have an annual rate of growth, but it’s still declining. That has to turn around.”