For the past several years, the general public has done a great job giving to charitable organizations. The recession hit America hard. In the aftermath, people were understandably hesitant about giving up any disposable income they still had. Since 2009, giving rose from 43% in 2009 to 65% in 2015. But 2016 nonprofit fundraising was a little worrisome, with growth declining for the first time, from 65% to 61%.
The study was put together by the Nonprofit Research Collaborative. They are a coalition of fundraising and charitable organizations that gather and analyze data to help charities become more effective at fundraising. NRC partners include: the Association of Fundraising Professionals; Association of Philanthropic Counsel; CFRE International; Giving USA Foundation; the National Association of Charitable Gift Planners; and TopNonprofits.
Jason Lee, the president and CEO of the Association of Fundraising Professionals, said this about the study:
“Take all these results together, and we are seeing the first slow-down in the rate of growth in charitable giving since the Recession of 2008 and 2009. But it is important to underscore that giving remains fairly strong—with 60 percent of charities raising more money in 2016 and another 13 percent raising about the same, as compared to 2015. It is a decrease, but these numbers are consistent with results we have seen in the study since 2000, and many charities continue to do very well.”
Areas Experiencing Growth
This information isn’t as alarming as it initially seems. Organizations are still experiencing growth in the areas of Major Gifts (55%), Direct Mail (50%), Online Methods (57%), Special Events (54%), Foundation Grants (53%), and Received and New Planned Gifts (58%).
While charitable organizations reported the growth of nonprofit fundraising in 2016 in the decline, representing a “significant drop, from 73 percent in 2015 to 68 percent in 2016,” growth is still in the green.
Other Interesting Facts From The Study
- The median total amount received by bequest was between $100,000 and $249,999. It varied by organization size.
- The 2016 campaign and election cycle affected about a third of participating organizations. Nearly a quarter said their charitable receipts declined, and about 10% said they rose.
- When asked to predict fundraising receipts in 2017, two-thirds in the U.S. projected increases.
- However, nearly half (46%) expressed concerns about economic and political change that might affect charitable giving.
- A third (34%) expressed concern about organization-level activity, such as leadership, marketing, and staffing.
- The remainder (20%) noted challenges in fundraising processes, whether building major gifts capacity, acquiring new donors, or using online technologies effectively.
According to the study, there were multiple factors going into 2016 that would have either negatively or positively impacted these statistics. Low pricing for fossil fuels negatively affected the economies in states and provinces with extraction industries, like Alaska, Texas, and Oklahoma in the U.S., and Alberta in Canada.
Some charitable leaders identified political campaigns in the United States as a contributing factor to raising lower funds. The stock market was volatile, which created financial uncertainty throughout the year, despite the U.S. showing stock market gains at the end of the year. And to end with a positive, there was a four-percent increase in disposable income. That’s somewhat ahead of inflation, which is usually a good signal for fundraising.
Other trends for nonprofit fundraising in 2016 were noted by the NonProfit Times and the Chronicle of Philanthropy during the year. They included major capital campaigns in areas like arts organizations and museums. Gifts exceeding $1 million from individuals, foundations, and estates increased. Online channels continued to invest, and there was more outreach to engage millennials, born roughly 1980 to 2000. This study also saw growth in Giving Days, such as Giving Tuesday, and organization-specific events like Give to Purdue or The Big Give (The Columbus [OH] Foundation).
Over 900 organizations participated in Nonprofit Research Collaborative’s survey about charitable receipts. They ranged from January to December, 2016, or fiscal 2016 for some organizations. Responding charitable groups included large and small organizations (by budget size) and organizations from every subsector.
Interested in further research? Find more details on the Winter 2017 – Nonprofit Research Study. These results are also all the more reason to invest in donor management software.