It has long been believed that the health of the philanthropic sector is directly linked to the passion people have for organizations and their missions. To that end, there has been a great focus on communication and stewardship of donors to further increase giving. And, while we can certainly see the outpouring of support during moments of heightened awareness, such as after natural disasters, there may be more at play to the sector’s current state of affairs.
Over the last 10 years, there have been several factors that have dramatically affected the sector’s overall endurance. These things have forced our awareness, not only of the external factors at play but the value of retaining an organization’s best donors. At the Blackbaud Institute for Philanthropic Impact, we set out to better understand what influences sector growth and how organizations can respond to the ever-changing market. Our latest report, Vital Signs: Monitoring Giving Patterns in the Donor Marketplace, shares our findings. Some of the most significant disruptors to the sector over the last decade include:
- While the value of individual giving in the United States increased about 3.4% (adjusted for inflation) in the decade from 2003 to 2013, the number of public nonprofits increased 23.4% or almost 5 times the rate at which individual giving increased
- The impact of the Great Recession of 2007–2009 on the ever-expanding nonprofit sector still challenges recovery of giving to pre-recession levels
- Baby boomers, infamous disrupters of all commerce, have been dominating the prime age range of giving (45 to 64) for more than a decade
However, for many years, the nonprofit sector in the United States has been focused on what can be done to expand giving. There has been plenty of evidence that there are tactical answers to the question, answers that deal with how we go about raising money from individuals, how we deploy the expanded choices of media, how we frame our communications to better nudge response, how we mine vastly expanded lodes of data, and more. But the evidence in Vital Signs strongly suggests that American donors are more valuable to American nonprofit organizations than the organizations are to donors. And this means we have strategic problems.
In this study, we specifically looked for giving behavior that might be affected by the factors listed above. We did not aim to document their influence on giving behavior; we aimed instead to document the behavior itself, providing a solid data foundation for follow-up research and development of practices that can result in better returns on fundraising investments. To better understand giving behavior, we looked at the massive base of household giving data from two angles:
- What are the most significant characteristics of recent giving?
- What are the behavior and consequence of new gift giving?
There are three fundamental objectives in raising money from individuals: keep the donors you have, increase their value to your organization over time, and recruit more donors than you lose to attrition. To see how organizations are performing against these fundamental objectives, download the full report at www.blackbaudinstitute.com/vitalsigns