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Half of nonprofits report income drop, says Global Fundraising Confidence Survey

Half of nonprofits report income drop, says Global Fundraising Confidence Survey

The Management Centre has published its Global Fundraising Confidence Survey 2009, and reports that 50% of not-for-profit organisations globally report a decline in income over the past year. At the same time, 33% experienced an increase in income.

The survey, conducted between May and August 2009, is based on the views of 126 leading fundraising directors and sector experts from Europe, Asia, North America, Australasia and Africa about the impact of the financial crisis on the not-for-profit sector.

The report follows a similar survey by the Management Centre in 2008. It highlights which organisations, causes and regions have and will be most affected and what strategies fundraisers should adopt to overcome economic instability. The survey also looked at senior fundraisers’ levels of confidence for fundraising in the yera ahead.

The report reveals that income to not-for-profit organisations across the world who responded to the survey fell by 3%. Of the 50% of organisations which saw a drop in income over the past year, almost 20% saw their income fall by over 10%.

In contrast, of the 33% of not-for-profit organisations which saw an increase in income, 14% reported income growth of 10% or more.

Not-for-profit organisations in Asia have suffered the most in the past year, with an average income drop of 13%, with those in Europe reporting a more modest drop of 1%.

The report shows that fundraisers do not attribute changes in solely to the and economic crisis. They cited additional causes such as difficulties in recruiting good fundraisers, poor crisis leadership from other directors and the board, and a lack of effective strategy for dealing with the crisis.

The senior fundraisers were asked what factors had helped them to sustain or increase income. The most common factors reported were:

• Increased investment in fundraising and working harder to counteract anticipated income falls

• Finding new sources of income

• Major donors stepping in to boost income

• Innovation in fundraising to create new offerings

The survey asked respondents what actions they had taken to tackle the impact of the recession. Over half selected either ‘fighting for market share – expansion has been our key tactic’ (30%) or ‘taking effective action quickly to maintain donations’ (25%).

The report shares the advice of these senior fundraisers on what to do to build income in these difficult and unusual times. The most common recommendations were:

• Stay close to donors. Work with them to explain the situation for beneficiaries, but do not put them under too much pressure

• Diversify and improve communication with donors. Get to know their needs better by improving research and databases. Make sure feedback is sought and treated seriously

• Apply a variety of fundraising approaches, do not just stick to one. Linked to this was a desire to use social media more effectively

• Reduce costs through a range of measures from applying low cost fundraising methods to applying a pay freeze

• Be innovative – this covered a range of suggestions, including working closely with other similar organisations

Overall the senior fundraisers surveyed were optimistic about the future: 56% said that they feel more optimistic about the coming 12 months in terms of raising funds.

One third (33%) felt much the same, and 11% felt less optimistic. Europeans were by far the most pessimistic region, with just 30% feeling optimistic about the coming year, compared to over 70% of Asians and Australasians.

Bernard Ross, Director of The Management Centre, said: “The report broadly reflects what we’re hearing from fundraisers worldwide as part of our consulting work. Fundraisers have been quick to adjust to the economic climate, and our experience is that roughly a third of not-for-profit organisations are stepping up to the challenge of the recession, and as a result becoming more effective and actually raising more income.

“In many cases, not-for-profit organisations report that donors are responding to increased need by increasing donations. But it’s not easy. Fundraisers are having to work harder and smarter to raise funds.

“Major donors and innovation are seen as drivers for better results. It’s also interesting to note that many see social media as playing a key role, although in my experience fundraisers are still uncertain about how to do this. But the most common advice from successful fundraisers was probably the best: “stay close to donors in as many different ways as you can”.”

You can watch Bernard Ross present a summary of these findings at last week’s Global Fundraising Futures Seminar in London:

www.managementcentre.co.uk

Howard Lake is a digital fundraising entrepreneur. Publisher of UK Fundraising, the world's first web resource for professional fundraisers, since 1994. Trainer and consultant in digital fundraising. Founder of Fundraising Camp.

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