By Carol Rhine, Principal Fundraising Analyst at Target Analytics.
A team of us at Target Analytics analyze the performance of direct marketing fundraising every quarter, and I present that analysis by webex. For the past ten years the headlines have been nearly the same – Donors Down, Revenue little changed, and Revenue per Donor up. The trends are now turning around, and we are seeing the donor populations staying steady, while revenue per donor and overall revenue are increasing. Is this the end of the downturn caused by the recession of 2008? Is the recession really the cause of the downturn? There is certainly evidence that donor behaviors are changing: direct mail acquisition is tougher, retention has become the main focus for many, online giving is on the rise, and sustainer programs are increasing revenue retention rates.
Broad-based donor support is the foundation of the nonprofit sector. That support was largely built after World War II through direct mail and person-to-person fundraising. We are now experiencing generational shifts in the population of donors, while also going through rapid changes in the technology of commerce. Much of how fundraising is practiced in the US, as well as in other countries, is driven by demography and infrastructure. The number of people available to become donors peaked in 2005, and we have seen donor populations falling ever since. The generational make-up of donors has shifted from the Greatest Generation to Leading Boomers.
And, we as fundraisers are straddling the digital divide. Over half of most donor files are 65+, senior citizens. More than 55% of seniors in the US have internet access, but their online shopping is a fraction of that of those under 65. Studies continue to show that seniors prefer offline communications. Reports out from the US Postal Service show the use of mail for bill paying dropped in half (from over 80% to just over 40%) in the past 15 years and is continuing downward. Most of the shift in bill paying was to paying online. So, we have to engage donors through every possible medium, and understand that each has a different audience. Attribution of the channel through which a gift was motivated has become increasingly difficult.
There are many influences on giving that are outside of the control of fundraisers – natural disasters, man-made emergencies, economic fluctuations, shifts in the tax code, changes in interest rates, job market participation rates, etc. In examining trends, and looking toward the future, we can pull together information from Giving USA, the AFP, the Target Analytics donor Centrics Quarterly Index, the Blackbaud Index, and other development sources. Where are we headed? Right now all indications are that we are recovering from the declines of 2008-9. That recovery is uneven across nonprofit sectors. The future of fundraising in the US will depend upon our ability to engage potential donors in very personal ways. A guru friend of mine says “Show me you know me.” That was never more true.
Carol Rhine joined Blackbaud in 2005 as the Principal Fundraising Analyst in Target Analytics. With more than 30 years of experiencein broad-based donor support to our donor Centrics and Benchmarking services, Carol serves as a key facilitator for the Target Analytics benchmarking collaborative meetings and industry indices. Carol holds a Bachelor of Arts from DePauw University with a double major in Economics and Psychology.
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