October 15, 2012

Nonprofits Lost $100 in Gifts for Every $100 Raised, Study Finds

Just how hard it is for fundraisers to keep raising as much this year as they did last year can be found in a just-released analysis of 2011 fundraising returns.

For every $100 charities raised in 2011, $100 was lost as donors stopped giving or donated less, concludes a new report by the Association of Fundraising Professionals and the Urban Institute. What's more, for every 100 donors that nonprofits recruited in 2011, they lost 107.

Bigger nonprofits did better than smaller ones, the study says. Those groups that raise $500,000 or more each year lost only $90 for every $100 gained, compared with organizations that raise less than $100,000; these smaller groups lost about $110 for every $100 raised.

Those in the middle—nonprofit organizations that raise $100,000 to $500,000 annually— lost nearly $100 for every $100 raised.

Larger groups may have performed better simply because they have more fundraising resources and may be better at finding and keeping donors, says Bill Levis, who leads the Fundraising Effectiveness Project, a joint project of the Urban Institute and the fundraisers' association.

"Their fundraising staff is more skilled, more experienced, and more trained," he says. "It's likely that some of the smaller organizations may not have a professional fundraising staff."

Given how costly it is to attract new donors, he says, charities "need to concentrate on retaining their existing donors and reducing donor attrition."

Still, even though 2011 was a wash, it was better than recent years, when the study tracked the roller-coaster ride of the the Great Recession: In 2010, $105 was lost for every $100 raised; in 2009, $119; in 2008, $105. In 2007, only $86 was lost for every $100 raised by nonprofits.

Did your nonprofit experience the same gains and losses in 2011 found in the study? Tell us in the comments section below.

Send an e-mail to Raymund Flandez.