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Overall giving in 2013 grew 4.9% on a year-over-year basis for the
4,129 nonprofit organizations in the analysis. This was an increase
over the 2012 growth rate and points to positive signs that giving in
the United States is returning to pre-recession levels.
Fundraising by large organizations, with annual total fundraising more
than $10 million, was up by 5.7%. This was a significant rebound from
2012 and was the highest growth rate among organizations in the
analysis. Medium organizations, with annual total fundraising between
$1 million and $10 million, had an increase of 3.8% in 2013. Small
nonprofits, with annual total fundraising less than $1 million, grew their
fundraising 3.6% compared to 2012.
Online giving in 2013 grew 13.5% year-over-year for the 3,359
nonprofit organizations in the analysis. Online fundraising continues to
be a growth engine for nonprofit organizations, and there is no reason
to expect this growth to slow for the foreseeable future.
year-over-year growth over 10%, with faith-based organizations having the
largest increase.
There was a decrease in the percentage of giving that comes from online
donations. In 2013, approximately 6.4% of overall fundraising revenue,
excluding grants, was raised online.
The continued increases in both overall and online giving are positive
signs for the nonprofit sector. Investments made in people, process, and
technology during the recession helped many organizations. Improving
economic conditions, a robust stock market, and other factors all
contributed to fundraising growth in 2013.
KEY FINDINGS The Charitable Giving Report analyzes trends from more than $12.5 billion in fundraising revenue from 2013. Here are some key findings:
1. Overall charitable giving grew 4.9% in 2013, while online giving grew 13.5%.
2. Online giving accounted for 6.4% of all charitable giving in 2013.
3. Large organizations had the greatest increase in overall charitable giving in 2013, while small organizations had the greatest increase in online giving during 2013.
4. International affairs organizations had the greatest increase in overall charitable giving in 2013 (13.2%), while faith-based organizations had the greatest increase in online giving in 2013 (18.1%).
5. More than one-third (33.6%) of overall charitable giving happens in the last three months of the year, with the highest percentage (17.5%) coming in December.
The analysis looked at the distribution of giving across all of 2013.
More than one-third of all charitable giving happens in the last three
months of the year, and this trend has remained consistent for several
years now. We did see a decrease in December giving, from 18% in
2012 to 17.5% in 2013.
There continues to be a spike in giving during June that happens
because of a focus by some nonprofit organizations on end-of-fiscal-
year giving. This trend continues to support the belief that nonprofit
organizations can diversify their giving across the calendar year with
the right amount of focus.
Online giving also has a significant amount of fundraising taking place
during the final months of the year. Just over 35% of online giving
happened during October, November, and December of 2013. Both
human services and public and society benefit organizations had very
high concentration of online giving at year’s end.
Almost every sector raised more than 20% of its annual online giving
during December. The exception was medical research, which raised
just 5.6% of its total online giving in December. This might seem
puzzling considering that medical research organizations raised 22.5%
of their entire fundraising in the last month of the year. This contrast
is likely because the vast majority of online giving to medical research
organizations is through peer-to-peer fundraising events. These run,
walk, and ride events are often held throughout the year and very few
happen during the month of December.
OCTNOV
DEC
Online giving also reached the year’s high in December – accounting for 18.8% of 2013’s online gifts. January was the slowest month of the year for online giving, bringing in only 4.8% of the year’s online donations.
DECEMBER
18.8%
JANUARY
4.8%Overall giving reached the year’s high in December – accounting for 17.5% of 2013’s total gifts. February was the slowest month of the year for overall giving, bringing in only 5.8% of the year’s total charitable contributions.
AHP has encouraged its members to develop “dashboards” that track net
fundraising revenue, return on investment, and the cost to raise a dollar.
Organizations can use that data to measure gains and successes,
providing their executives and boards with information they need to
make decisions about fundraising strategies and investments.
While the cost of raising a dollar measures efficiency, McGinly said,
investment in overhead is equally important.
“A lot of organizations that are efficient aren’t raising the dollars they
need,” he said. “They lose an opportunity because they’re afraid to
take a risk or take advantage of something that’s really going to give
them a return.”
HIGHER EDUCATION – CULTIVATING MAJOR GIFTS
A rebounding economy and long-term investment
in major gift donors paid off for colleges and
universities in 2013, said John Lippincott, president of the Council
for Advancement and Support of Education (CASE).
Schools that have shown fundraising success are also doing a good
job in their stewardship of donors, including younger donors, by
engaging them in their institutions in ongoing ways, he said.
In a CASE survey a year ago, members said they expected 5.8
percent growth in giving in 2013 compared to 2012, a projected pace
roughly equivalent to the 20-year average growth for CASE members.
“We are now back to normal rates of growth in the aftermath of the
recession,” Lippincott said.
Driving that growth has been the recovering economy and the
cultivation of major gift donors, or those making gifts of seven figures
or more, he said.
In a fundraising campaign with a goal of $1 billion or more, 87 percent
of funds typically are given by one percent of donors, and those major
gifts generally are a function of “the number of
times you ask,” he said.
“What is accounting for the kind of success
people are anticipating comes down to the
development of the relationships with the
major donor community,” Lippincott said.
“Those donors are giving as a result of the
long-term relationships they have with the
institutions.”
Institutions that are doing well “are the ones that spent a lot of time
listening to their donors during the worst of the recession,” he said.
“And they’re reaping the benefits now.”
Key to cultivating those donors is finding ways to meet the growing
expectation of major donors to have “a level of engagement with the
institution beyond simply the transaction of the gift,” he said.
That kind of stewardship, which often can lead to future gifts, typically
involves inviting major donors to serve, either formally or informally, in
an advisory or governance role at the school so they truly become key
advisers and “stakeholders” in the institution, Lippincott said.
Colleges and universities are also looking for ways to maintain
relationships with major donors.
Scholarships represent a good opportunity to develop those
relationships by providing donors with ongoing interaction with
scholarship students, with the donors often serving as mentors for
the students.
Schools also have been working to better engage younger donors.
Research shows Millennial donors – or
those born between the early 1980s and
the early 2000s – are as generous as other
generations were at the same age, but that
they are “much more focused on wanting
to support the things that matter to them,”
Lippincott said.
“The appeal that institutions often will make is
a very specific appeal to people several years
“What is accounting for the kind of success people are anticipating comes down to the development of the relationships with the major donor community.”
out of the institution,” he said, so those young alumni “can see how
this is going to have a meaningful and immediate impact,” he said.
A school might ask recent graduates and even current students to support
a bike-sharing program on campus, for example, because it’s “something
real that they can relate to, rather than a general appeal,” he said.
In comparison, said Lippincott, a 1971 graduate of Wesleyan
University, his annual gifts to his alma mater are made “out of a sense
of general obligation, rather than what my money is actually going to.”
Schools are also increasing use of digital media to more effectively
reach donors, and not only younger alumni, he said.
For younger donors, who handle many if not all of their transactions
online, digital media represents a natural platform for giving.
For those donors, social media also represent a platform that is
“more important for donor acquisition than it is for dollar acquisition,”
Lippincott said.
“Even if gifts from recent graduates are $10 or $25 gifts using social
media, it’s as important that you’ve gotten those recent graduates
into the habit of giving, and acquired information about what they’re
interested in, and can use that to sharpen the appeal,” he said.
Planned giving also has become a key fundraising program at many
colleges and universities.
Major donors, who account for most of the recent growth in
fundraising revenue, often want to make their gifts through planned
giving vehicles, Lippincott said.
And at a time of low interest rates, he said, donors often prefer planned
giving strategies, such as annuities that make regular payments to
donors, with the remainder of the gift going to the college or university.
“Those annuity payments now are quite appealing,” he said, “because
they frequently pay significantly higher interest rates, rather than
people parking their money in any fixed income asset.”
K-12 – DRIVEN BY DATA
Attention to data is driving fundraising at independent
schools, which have seen steady growth in
fundraising revenue since 2000, said Donna Orem, chief operating
officer at the National Association of Independent Schools (NAIS).
“The best schools have always been doing a lot of prospect
research and then looking at data and having it guide much of their
fundraising,” she said.
Median fundraising revenue grew to nearly $600,000 in the 2012-13
school year, up from about $500,000 in 2000, according to a survey of
NAIS member schools that generated responses from 970 institutions.
That growth was consistent for the period, except for a slight blip
during the recession, but even then many schools found they could
turn to a small number of donors who had the capacity to dig deeper
and who “understood the challenges schools were facing,” Orem said.
Schools are using data to better understand donors based on
factors such as gender and race, segmenting their base of donors
and prospects.
“The fundraiser today in an independent school does his or her
homework to really understand those nuances,” Orem said. And
with 10 percent of donors typically accounting for 90 percent of
“Most schools understand they have to have a very effective major gifts program, have to do research to understand who their best donors are, and have to have effective major gifts fundraisers who understand how to engage those donors, who need ongoing cultivation.”
— Donna Orem CEO,
National Association of Independent Schools (NAIS)
involved in “places that matter” and showing them the impact of
their gifts, said Doug Barker, co-founder and principal at Barker &
Scott Consulting, a firm that provides management consulting for
nonprofits, including environmental organizations.
“We have results you can walk on,” said Barker, quoting John Sawhill,
former CEO at The Nature Conservancy, where Barker was the chief
information officer.
So environmental and conservation groups
have been inviting donors and prospective
donors to outings and talking to them about
“what’s so special about those particular
places.”
Those outings can include activities for
families and children and can pave the way
for additional gifts.
Recognizing that the environment is “visually
compelling,” Barker said, environmental
organizations also are providing donors and
prospective donors with images of “what’s at
stake in terms of nature, and also what some
of the threats are.”
And those groups are using traditional and
digital media to reach a broad range of constituents.
“At the end of the day, and not just for environmental groups, you’re
really looking at a multi-channel integrated strategy for how you’re
going to engage your constituents,” Barker said. “Certain strategies
resonate more with some groups than others. But it’s having full
portfolios of ways to engage people that can be so effective.”
Those strategies, he said, depend on identifying the needs of
individual donors and groups of donors.
For major donors, for example, “it’s all about relationship-building,
figuring out what that particular donor is passionate about and how
they really want to be engaged.”
Environmental and conservation groups can invite donors on trips,
showing them first-hand areas that may be at risk and developing a
more personal relationship.
And organizations increasingly are working to
show donors the impact of their giving.
Some groups are using research studies
and reports to show the economic value of
functioning ecological systems, as well as
providing calculators that visitors to their
websites can use to measure their carbon
footprints through diet and the use of home
energy, driving, flying, recycling, and waste.
They also provide tools, tips and information
that people can use to take action, whether
to reduce their carbon footprints or contact
policymakers, as well as quizzes and
adoption programs that can engage them.
World Wildlife Fund invites people to “test your
elephant IQ,” for example, or to make a symbolic donation to adopt a
snow leopard or penguin.
Those kinds of features can increase a donor’s “affinity and trust
and overall respect for an organization that probably could also
result in increasing their support,” Barker said. “It’s a way to make
a connection with what you’re doing, even if symbolically, in a more
meaningful and tangible way.”
“At the end of the day, and not just for environmental groups, you’re really looking at a multi-channel integrated strategy for how you’re going to engage your constituents. Certain strategies resonate more with some groups than others. But it’s having full portfolios of ways to engage people that can be so effectivey.”
— Doug Barker Co-Founder and Principal, Barker & Scott Consulting
The findings in this Report are based on giving data from 4,129 nonprofit organizations and more than $12.5 billion in fundraising revenue. The online
fundraising findings are based on data from 3,359 nonprofit organizations and more than $1.7 billion in online fundraising revenue.
To be included in the analysis, these organizations needed to have 24 months of complete giving data with no gaps or missing information. Each
organization was then classified by sector using its NTEE code as reported on its 990 tax return. (If you are not sure what sector your organization is
classified as, you may refer to your 990 to find your NTEE code. Visit http://nccs.urban.org/classification/NTEE.cfm for a complete listing of sectors.)
Organizations were then grouped into three size categories: total annual fundraising less than $1 million (small), total annual fundraising between $1
million and $10 million (medium), and total annual fundraising exceeding $10 million (large). This is based on recorded giving in their fundraising systems,
reported fundraising in IRS Form 990 data, and matching done through the National Center for Charitable Statistics.
Organizations without all the research criteria were not included in this analysis. Organizations based outside the United States were excluded from this
analysis. We do not include the unfulfilled portion of pledge gifts. Giving USA data is used to weight the data to ensure that no individual organization or
sector is overrepresented in the analysis.
The percentage of total fundraising from online giving is based on 3,135 nonprofits in The Blackbaud Index. These organizations represent $10.8 billion
in total fundraising.
This Report would not be possible without the statistical number crunching muscle of Jim O’Shaughnessy, the dexterous design of Lucy Meyer, the
industrious interviewing of Todd Cohen, the eagle-eye editing of Melanie Mathos and Heather Friedrichs Lyman, and the wisdom and support of Chuck
Longfield. A big thank you to each and everyone involved in making it happen.
ABOUT THE BLACKBAUD INDEX
Economic conditions, natural disasters, and market fluctuations have made it extremely difficult for nonprofits to make fundraising decisions
informed by the latest donor behavior. That is why we created The Blackbaud Index in 2010 — to provide insight into what happened in the
prior few weeks and valuable analysis by leaders in the sector into what fundraisers can learn from it.
The Blackbaud Index brings you the most up-to-date information on charitable giving today. Tracking approximately $13 billion in US-based
charitable giving, the Index is updated on the first of each month and is based on year-over-year percent changes. Featuring overall and online
giving, the Index can be viewed by size and sub-sectors of the nonprofit industry. Visit www.blackbaud.com/blackbaudindex to experience the
recently-enhanced interactive Index charts, where you can easily compare by size or sector and view historical performance.