April 18, 2011

Overall Charitable Giving Is Up, but Web Donations Decrease: Blackbaud

Arts organizations benefit from ‘out-of-the-box’ online fundraising

Overall charitable giving rose 3% in the three-month period ending in February, compared with the same period last year, according to a report released Monday by Blackbaud Inc. Online giving decreased by 8.6% during this period.

The Blackbaud Index of Charitable Giving and The Blackbaud Index of Online Giving are updated on the 15th of each month, and are based on a three-month moving average of year-over-year percent changes in charitable giving.

The 3% rise in overall giving represents the seventh consecutive period of increased giving, according to Chuck Longfield, Blackbaud’s chief scientist and creator of the Blackbaud Index. “Though overall giving is still roughly 5% below prerecession levels, [this] indicates that we are well into a recovery in charitable giving,” Longfield said in a statement. “This result is especially noteworthy given the substantial giving to Haiti in the prior year period.”

The 3% increase in overall charitable revenue during the most recent three-month period was based on $2.2 billion in 12 months’ revenue from 1,430 nonprofit organizations, the statement said. The index found that three-month overall charitable revenue for small organizations (prior year revenue of < $1 million) increased by 6.4% in February, while that for medium organizations (prior year revenue of $1–10 million) rose by 4.8%, and for large organizations (prior year revenue > $10 million) by 1.1%.

Online revenue decreased by 8.6%for the three months ending in February, as compared to the same period in 2010. This trend was based on $427 million in 12 months’ online revenue from 1,837 organizations.

The index found that three-month online revenue for small organizations (prior year revenue of < $1 million) increased by 18.8% in February, while online revenue at medium organizations (prior year revenue of $1 – 10 million) increased by 1.3%. At large organizations (prior year revenue > $10 million), however, it fell by a whopping 27%.

Blackbaud provided some context for this finding. It said that during the first three months of 2010, the Online Giving Index reported substantial increases in giving, particularly to large nonprofits engaged in Haiti relief efforts. These online giving levels were compared against the same period in 2011, which helps explain the reported 8.6% decrease in online giving overall and the 27% decrease for large organizations.

It said that if online giving to international relief organizations is excluded from the calculation, the online index shows an increase of 2.6% for the three months ending in February, compared with the same period last year.

Specialty Index: Arts, Culture and Humanities

On Monday, Blackbaud also released a new specialty index focused on Index of Charitable Giving reports on arts, culture and humanities organizations. These experienced an overall charitable revenue decrease of 3.1% for the three months ending in February,

compared with the same period in 2010, based on $221 million in 12 months’ revenue from 163 organizations.

During the same period, online giving to arts, culture and humanities groups had an online revenue increase of 9%, based on $19 million in 12 months’ revenue from 153 organizations.

The Blackbaud statement said online giving to arts and cultural organizations reported a steady increase throughout 2010 and early 2011. It noted comments by Ford Bell, president of the American Association of Museums, to the effect that this will increase as more museums embrace online and mobile methods to engage with their audience.

The statement also cited commentary on the specialty index by Dick McPherson, president and creative director of McPherson Associates, a fundraising and communications consulting firm. “Other nonprofit sectors, such as environmental and health and human services experience spikes in giving that do not occur with arts and cultural nonprofits. In an economic downturn, people still want to help human service organizations when disaster strikes, but they may put off giving to the arts.”

McPherson said donors’ relationships with arts organizations are personal, while their interactions with human service nonprofits are typically from a distance. He said arts organizations see giving increase, as well as attendance, when they employ out-of-the-box, online methods to forge an intimacy with their audience.

 “Arts groups are using technology in the most interesting ways, but they don’t attract headline news coverage,” McPherson said. “An art museum in a small urban area said daily attendance increased from 5,000 per day to 40,000 once they started a digital gallery on their website. We’re finding that arts institutions that have aggressively embraced technology to enhance engagement are seeing increases in attendance and fundraising.”

Project-based giving is also becoming more prevalent among arts institutions, said McPherson. It enables donors to specify their gift for an individual project. “In a tough economy, people need extra incentives to give. An example of project-based giving would be a museum with an exhibit by young women artists may highlight that on their website to attract supporters specifically interested in the work of young women artists.”

Blackbaud, a 30-year-old company, 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. Approximately 24,000 organizations use one or more of its products and services for fundraising, constituent relationship management, financial management, website management, direct marketing, education administration, ticketing, business intelligence, prospect research, consulting, and analytics.

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