Donor and Donor Fatigue

Donors Still Eroding, But Gifts Getting Larger

While revenue held steady at many of the major, national nonprofits during 2010, the erosion of the donor base continues, with those staying behind adding to their donations and making up the losses.

The average donor tracked by the index gave a median 1.69 gifts in 2010 with the median revenue per donor being just $59.

That among the findings of the latest Target Analytics donorCentrics Index of National Fundraising Performance. For the 12 months ending in the fourth quarter of 2010, Target Analytics evaluated direct response giving transactions of 83 organizations, including more than 39 million donors and more than 81 million gifts totaling over $2.5 billion.

Revenue growth for the index was essentially flat in 2010, increasing by a median 1 percent from 2009. Just over half of the organizations in the index had revenue increases year over year, according to the index. Of the eight sectors in the index, three (animal welfare, international relief, and societal benefit) had significant revenue growth. Three (arts and culture, health, and religion) had significant revenue declines. And two (environment and human services) had essentially no change in revenue from 2009 to 2010.

The sector with the greatest revenue growth, the international relief sector, had a dramatic revenue spike in January 2010, which was largely due to fundraising for relief efforts following a severe earthquake in Haiti.

While revenue has remained flat, donor numbers have continued to drop. Donors declined a median 2 percent for the index as a whole from 2009 to 2010. This continues a trend that predates the recession. Donor populations have been shrinking consistently for the past five years, primarily due to declines in new donor acquisition, according to the report.

After having been in decline for all of 2009, revenue per donor amounts increased during 2010. This growth was widespread throughout the index; 73 percent of the organizations in the index had positive revenue per donor growth during the period. These increases have allowed index organizations to maintain last year’s revenue levels even as donor numbers continue to fall, according to the report.

Overall donor declines have been primarily due to declines in new donors, which have also been in decline since 2005. New donor numbers fell a median 3.5 percent from 2009 to 2010, on top of a decline of 7.4 percent the year before, and in spite of strong disaster-related acquisition in the first quarter of the year. While three sectors (animal welfare, international relief, and societal benefit) had significant new donor growth in 2010, four sectors (arts and culture, environment, health, and human services) had significant new donor declines.

Median revenue per donor was $59 for the index in 2010. The international relief sector had the highest revenue per donor, with each donor giving $149. The religion sector had the lowest revenue per donor, with each donor giving $26.

Index donors gave a median 1.69 gifts each in 2010. Animal welfare organizations had the highest gift frequency of any sector, receiving a median 2.47 gifts per donor in 2010. Although sustainer or monthly giving programs are not widespread and typically account for a small fraction of giving, organizations with larger sustainer programs will drive up gifts-per-donor metrics.

The index as a whole had a median 51.2 percent donor retention rate in 2010. The arts and culture sector had the highest retention rate at a median 66.7 percent; the health sector had the lowest retention rate at a median 45.1 percent.