Giving Slows At the Mid-Year Point: How to Respond
While giving was increasing significantly at mid-year in 2011, that growth has all but receded now as donor confidence has hit record lows.
Chuck Longfield, Chief Scientist for Blackbaud, notes that giving was increasing during the summer of 2011 by double digits, compared to the previous year. “If we had been able to keep that sort of growth going, we’d have seen fundraising restored to roughly 2008 levels.”
However, looking at the data from the Blackbaud Index of Charitable Giving, Longfield notes that the improvements and increases in 2012 have been getting smaller and smaller each month—to the point that overall giving was essentially flat in May, and increased just 1.6 percent in June. “Between those drops and inflation, we’re basically at the same level of giving as we were last year at this time.”
Longfield stressed however that giving levels aren’t getting worse nor does it necessarily look like they will. Mid-year giving tends to be slower, and charities typically see a bump in giving as the year goes on, especially the last three months. The Nonprofit Research Collaborative’s 2011 survey showed that giving overall received a significant bump in the final quarter of the year that led to overall positive growth.
Donor Confidence Key
A critical reason for the slowdown in giving has been donor confidence in the economy and their ability to make gifts.
Two recent surveys show just how low donor confidence is.
Barna, a fundraising consulting firm, has been surveying people about their giving habits since 2008 when the economy began to falter. The firm’s latest survey, conducted in April, found that 41 percent of respondents had reduced their giving to nonprofit organizations over the past three months—the highest figure the survey had ever seen. In addition, 34 percent have been affected by the economy “in a major way,” while 50 percent believe the economy will take at least three years to recover.
In addition, Campbell Rinker, a marketing research firm, publishes a donor confidence index every few months. The February 2012 index revealed the lowest confidence figures since the index was first created in 2008.
“Our Blackbaud Index data is consistent with those findings,” says Longfield. “Donors are just very uncertain in their giving decisions right now and far more likely to postpone their typical contributions.”
How to Respond
AFP Chair Andrea McManus, CFRE, has some thoughts about how organizations should respond to the slowdown and work to find success in this challenging environment.
“We have to remember that just like in previous years, hundreds of billions of dollars will be given to causes around the world in 2012,” said McManus. “Many charities will far exceed their goals, so the question is, how do we ensure that we are one of those organizations?”
McManus addresses this issue in her column in the July/August issue of Advancing Philanthropy and mentions a few specifically in relation to donor confidence.
“We have to be in touch with our donors more than ever and making a point to get to know them,” says McManus. “Donors are unsure about the economy, the future, their giving decisions, so help them to at least be confident about one thing: your organization, its impact and their involvement. Touch base and listen to them about their concerns and fears, and work to maintain your relationship, even if they aren’t in a position to support you right now.”
McManus also stresses that now is a good time to test your case for support and emphasize the need for your organization and its services. “Charities are never needed more than in a crisis, and this is our opportunity to talk about just how important our services and programs are for the community,” she notes. “We need to move forward with an understanding of what our donors are facing, but we should not be defensive about asking for money during these times.”
If anything, McManus says, organizations should consider expanding their fundraising efforts, not retrenching or limiting their exposure. “You have to be smart about it, of course, but this is an interesting time to consider expanding your outreach precisely because the needs are so great. We saw this after 9/11 too—those organizations that didn’t pull back, but kept up their efforts—and in some cases increased them—ended up much better.”
McManus shares other ideas in the July/August issue of Advancing Philanthropy.