For the past several years, the general public has done a great job of giving to charitable organizations. The recession hit America hard, and in the aftermath, people were understandably hesitant about giving up what disposable income they still had. Since 2009, giving rose from 43% in 2009 to 65% in 2015. But nonprofit fundraising in 2016 was a little worrying, with growth declining for the first time, from 65% to 61%.
The study below was put together by the Nonprofit Research Collaberative, which is a coalition of fundraising and charitable organizations who 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, had this to say 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.”
Taken straight from the horse’s mouth, 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.
Here are other interesting facts taken from the study:
1. The median total amount received by bequest was between $100,000 and $249,999, which varied by organizational size.
2. The 2016 campaign and election cycle affected about third of participating organizations, with nearly one-quarter saying their charitable receipts declined and about 10 percent saying they rose.
3. When asked to predict fundraising receipts in 2017, two-thirds in the U.S. projected increases.
4. However, nearly half (46%) expressed concerns about economic and political change that might affect charitable giving.
5. A third (34%) expressed concern about organization level activity, such as leadership, marketing, and staffing.
6. 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 are multiple factors leading into the 2016 year that would have either negatively or positively impacted these statistics. There was the low pricing for fossil fuels, which negatively affected the economies in states and provinces with extraction industries, like Alaska, Texas, and Oklahoma in the U.S. and Alberta in Canada. There were the political campaigns in the United States, which some charitable leaders identified as a contributing factor to lowered funds raised. There was a volatile stock market, 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, 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, which included major capital campaigns in areas like arts organizations and museums. Gifts exceeding $1 million or more from individuals, foundations, and estates increased. Online channels continued to invest, and there was more outreach to engage people in the “Millennial” generation (born roughly 1980 to 2000). This study also saw growth in “Giving Days,” whether it was Giving Tuesday (national) or 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, which 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. You can find more details on the study for free here: Winter 2017 – Nonprofit Research Study. This study’s results are also all the more reason to invest in donor management software.