Nonprofits Target Income, Donations and Expenses in 2010/11: Survey

As restricted gifts increase, groups scramble for general operating support

The U.S. and Canadian nonprofit sector is showing increasing interest in improving governance, planning and fundraising, and investing in training and equipment to enhance organizational performance, according to a study released by Blackbaud Inc. on October 21.

The foundation community has weighed in with capacity-building grants and requirements that grantees demonstrate the impact of their programs on target populations, Blackbaud said. As well, authors, educators and researchers have explored ways to draw on management techniques used by successful for-profits to help nonprofit organizations become more effective and more accountable to their constituents and the general public.

The North American findings are part of the 2010 State of the Nonprofit Industry Survey, Blackbaud’s annual global report covering general operations, fundraising, technology and Internet usage, and accountability and stewardship.

“Blackbaud has conducted the State of the Nonprofit Industry Survey for six years to provide an overview of trends that can help nonprofits assess their operations and compare their performance with other organizations,” Amy Comer, Blackbaud’s director of market research, said in a statement. 
These were the survey’s key findings for North American nonprofit organizations:

General Operations

A majority of survey respondents from U.S. and Canadian nonprofits expect their organization’s total income, income from charitable giving and expenses to increase in 2010 and 2011. Most expect demand for the organization’s services to increase, but nearly half said their staffing levels will remain static.

Fundraising

Individual donations and special events are the sources of funding cited by the largest percentage of survey participants. Respondents said that maintaining relationships with supporters and retaining current donors were the most important business practices related to fundraising. They ranked retaining donors

and staff highest in terms of organizational performance. The largest gap between importance and performance appeared in the area of recruiting new donors. Nearly 60% of respondents expect to increase organizational investment in donor recruitment in the coming year.

The findings indicate that the top drivers of donations are direct mail, one-on-one solicitation of major donors and special events. Most respondents predicted that all of these, along with Web site donations, will produce increased revenue in 2010.

Technology and Internet Usage

Many survey participants use online tools in their communication and fundraising efforts. Organizations most frequently use Web sites to market themselves and educate the public about the organization’s mission. The organizational Web site’s second most frequent use is for acquiring new supporters and donors. Mail and email are the most frequently used methods of communicating with constituents.

The top driver of online donations is email to current donors, followed by direct mail promotion of online giving and special events. Organizations also use online tools for online payments, electronic newsletters, social networking and Web analytics.

Accountability and Stewardship

Forty-two percent of respondents said they received requests from donors for reports on how donations are spent, and 60% said they received requests to have contributions restricted for a particular purpose. For the organizations that reported increasing requests for gift restrictions, about a third said they were having trouble obtaining funds for general operating support. Strategies for counteracting negative effects of increased gift restrictions include specifically soliciting unrestricted gifts and seeking additional grants and non-grant revenue.

Nearly 90% of survey participants reported that their organizations had audited financial statements. In addition, most reported they had an audit committee and they communicated proactively on the impact of programs and how donations were spent. A majority also have policies and practices to protect donor privacy.

For its global survey, Blackbaud said it had received responses from 2,383 individuals in Australia, Canada, France, Germany, Italy, India, the Netherlands, New Zealand, the U.K. and the U.S. The survey was conducted in partnership with L’Association Française des Fundraisers, the Fundraising Institute of New Zealand, the German Fundraising Association, Philanthropy Centro Studi and the Resource Alliance.

Global trends that emerged from Blackbaud’s data:

  • New fundraising and communication channels, although growing, are not replacing traditional channels.
  • Return on investment and organizational effectiveness are under scrutiny and more important than ever.
  • There is a new focus on the total supporter journey vs. traditional “donor management.”
  • Fundraising is emerging as a widely recognized profession around the globe.

Blackbaud provides software and services designed specifically for nonprofit organizations, enabling them to improve operational efficiency, build strong relationships and raise more money to support their missions. Headquartered in Charleston, S.C., Blackbaud also has operations in Australia, Canada, Hong Kong, the Netherlands and the U.K.

Read about the growing social impact of philanthropy at AdvisorOne.com.

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