Response to Association of Fundraising Professionals' Study: Fundraising Effectiveness

Response: Fundraising Effectiveness Study
AFP Fundraising Survey Response
By Norman Olshansky: President
      NFP Consulting Resources

In response to a request from my local Association of Fundraising Professional’s Chapter, to comment on the new National Fundraising Effectiveness survey, I have prepared this article .

Background:

For the first time in five years, results from the annual AFP Fundraising Effectiveness Survey reveal that charity respondents experienced positive gains in giving, but continued to lose donors faster than they gained them.  The 2013  report summarizes data from 2,840 respondents throughout the United States, covering year-to-year fundraising results for 2011-2012.  

•   Gains in gifts from new, upgraded and previously lapsed donors were offset by losses through reduced gifts and lapsed donors.  So, while there was a positive net growth-in-giving, every $100 gained in 2012 was offset by $96 in losses through gift attrition.

•   Gains of new and previously lapsed donors were offset by losses in lapsed donors.  This means that there was a negative growth-in-donors and every 100 new donors gained was offset by 105 in lost donors.

•   Performance varied significantly according to organization size with larger organizations performing much better than smaller ones. 

It should come as no surprise that over the past several years nonprofits have had their share of fundraising challenges, especially among mid and small size organizations.
A snapshot of the national trend for all nonprofits shows that, while overall giving had modest gains, the number of donors has decreased. Bottom line – fewer people are giving and nonprofits have become more dependent on their major donors.
I was asked to comment on the trends noted in the recent study based upon my experience as a fundraising consultant:

1.     While not realistic, nor appropriate, more and more boards and executives are looking for their development staff to bring in the “bucks” without adequate leadership involvement and support. Staff alone cannot be expected to provide magic bullets, especially in mid to small nonprofits.

2.     During the recession, many nonprofits cut staff to save on expenses and the remaining staff, especially those devoted to fundraising, were overwhelmed, and burnt out, causing high turnover and a multitude of other problems.

3.     Many nonprofits have continued to focus their fundraising efforts primarily on events, which have a low return on investment. Events have their place but need to be part of a broader fundraising strategy and plan that uses a variety of fundraising activities targeting multiple segments of one’s donor and prospect base.

4.     Development departments have ignored many of the basics when it comes to fundraising:

A. Keep in touch with existing donors and provide good communications and recognition. They are your most important donor segment. This does not mean sending out quarterly fundraising mass appeals, or only communicating when there is an “ask”. Nonprofits need to spend more
time on stewardship and recognition of existing donors. You can never thank a donor too often.

2.     Do not neglect the pipeline. Keep in mind (especially in Florida), we lose many donors to death, health issues, relocation and from feeling that their gift is not appreciated. In order to simply maintain your existing number of donors you need to add a lot of first time donors. Do not neglect to include new donor acquisition activities within your campaign plan.

3.     While there is a science as well as an art to fundraising, nonprofits are also corporations (businesses) that need to analyze, evaluate and conduct their affairs with an understanding of return on investment of human as well as financial resources. Have a plan that is prioritized to maximize resources and maintain metrics that can be evaluated.

4.     Leaders and staff within nonprofits tend to be crisis oriented and not strategically focused. Too often inadequate time is spent on vision, impact, outcomes and staying true to mission.

There are many axioms related to fundraising. One is that “it all starts with leadership”, (volunteers AND professionals). Analyze, ask questions and do not ignore the basics of professional fundraising. Only then will you be able to say that, “we not only reversed the trend” but also raised more money, retained more of our existing donors, added more donors overall, increased our average and median gift size, and engaged more fundraising leadership and volunteers with a lower fundraising cost per donor”. For more axioms related to fundraising go to: http://nfpconsulting.blogspot.com/2009/09/fundraising-axioms-simplified.html

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