Benchmark Research on Fundraising Shows Contributions to Human Services Organizations (HSOs) Grew Faster Than For All Other Nonprofits
To get more charitable giving “love,” HSOs had some catching up to do.
Groundbreaking research based on newly available data shows the growth rate for charitable donations to human service organizations has both caught up with—and surpassed—that of all other types of nonprofits, according to a new report by Giving USA Foundation, produced in partnership with the Growth in Giving Initiative.
Between 2009-2015, HSOs—think food banks, homeless shelters, youth services, sports organizations, and family and legal services—saw giving increase by 58.1 percent, compared to the 48.7 percent seen by the rest of the sector, according to Giving USA Philanthropy Spotlight: Benchmarking Giving to Human Services.
In addition, by calculating the average contribution for each year between 2005 and 2015, the analysis showed that per-donor giving to HSOs increased at a much faster rate than giving to other types of nonprofit organizations.
These benchmarks are good news for HSOs, which comprised 35.5 percent of all public charities in 2014, according to the Urban Institute’s Nonprofit Sector in Brief 2015, but that received just 11.7 percent of all charitable donations that year, third behind the 32 percent that went to religion and the 15 percent dedicated to education (Giving USA 2016).
“Historically, Giving USA’s data have shown that in times of economic stress, such as during the Great Recession years, giving to organizations within the human services sphere increases, because donors see and sense the immediate need for contributions and the impact those contributions will have,” said Giving USA Foundation Chair Aggie Sweeney, CFRE. “This new analysis provides an indicator that HSOs have become much more effective at outreach and communication so that charitable giving is sustained once that immediate need passes.”
New report provides previously unavailable metrics about HSOs
The analysis contained in the Spotlight provides metrics about fundraising effectiveness among HSOs akin to what has long been available in the health and education sectors.
It was made possible thanks to a database created through formation of the Growth in Giving Initiative (GiG) by the Association of Fundraising Professionals, the Urban Institute’s Center on Nonprofits and Philanthropy and DonorPerfect software.
An offshoot of their Fundraising Effectiveness Project (FEP), the Initiative forged partnerships with fundraising data management firms including Bloomerang, Neon and Abila; in total, the firms contributed millions of individual, anonymous, gift transaction records that formed the backbone of the database. Competitors all, they collaborated so that the entire philanthropy sector could benefit from shared knowledge provided by analysis of their combined data.
The records will be updated on an ongoing basis to ensure the data remain current—and relevant.
“Thanks to the extraordinary level of collaboration among so many organizations within the Initiative, we have the first-ever in-depth look at fundraising across the human services sector,” Sweeney said. “As the publisher of Giving USA, the annual report on all charitable giving in the United States, we are proud to place a spotlight on this important sector and provide tangible intelligence to practitioners within it.”
Additional findings from the Giving USA Philanthropy Spotlight:
- Small human services organizations in the GiG database—those that receive less than $1 million in total annual contributions—are frequently the most successful at donor acquisition.
- HSOs tend to be more successful at retaining higher-end donors vs. those who give relatively small amounts.
- HSOs and other types of nonprofits alike saw overall donor retention decrease by almost seven percentage points between 2005-2006 and 2014-2015; overall, though, HSOs tended to experience higher retention rates.
“With the GiG database, researchers and practitioners can develop statistics that prior to now have been available almost exclusively to professional fundraisers,” said Nathan Dietz, Spotlight coauthor, Initiative member and Senior Research Associate at the Urban Institute’s Center on Nonprofits and Philanthropy. “We have also expanded our knowledge of the sector as a whole; while HSOs are active in almost every community in the country, data about them have been hard to come by,” he added.
FEP Provides Powerful Analytic Tool to the Philanthropy Sector
Complementing the benchmark report is a free tool, the FEP Fundraising Fitness Test. It allows HSOs, as well as every other kind of charitable organization, to analyze their own gift transactions to create benchmark statistics about fundraising effectiveness.
One HSO already experiencing benefits from the fitness test is the YMCA of the USA. “It is helping our participating local organizations critically analyze their fundraising operations and begin to ask the right questions, creating conversations that haven’t always been possible,” said the Y’s Ryan Johnson, CFRE. He added that traditional reliance on top-line gains in new donors is now being augmented with a focus on the importance of donor retention and other key metrics. “I think this tool will be a game changer for us,” he said.
Initiative Chair Erik J. Daubert, MBA, ACFRE, agrees about the value of the GiG’s dataset and the FEP fitness test. "Our database contains billions of dollars’ worth of philanthropic data, and we are looking forward to sharing more information as our partnerships and funding continue to expand,” he said. “We are proud to present this report on HSOs in partnership with Giving USA Foundation; our revolutionary methodology for compiling this unique dataset is changing the face of nonprofit philanthropic information."
The Giving USA Philanthropy Spotlight, “Benchmarking Giving to Human Services,” can be downloaded instantly at www.givingusa.org for just $19.95.
About Giving USA Foundation
Advancing the research, education and public understanding of philanthropy is the mission of Giving USA Foundation, founded in 1985 by The Giving Institute. Headquartered in Chicago, the Foundation publishes data and trends about charitable giving through its seminal publication, Giving USA, and quarterly reports on topics related to philanthropy. Published since 1956, Giving USA is the longest running, most comprehensive report on philanthropy in America. Read more about Giving USA Foundation's history, as well as the history of Giving USA and philanthropy in the U.S. in the Giving USA 2015 Spotlight: Celebrating Service to Philanthropy, available as a free download from www.givingusa.org.
About the Growth in Giving Initiative
In 2006, the Association of Fundraising Professionals (AFP) and the Center on Nonprofits and Philanthropy at the Urban Institute established the Fundraising Effectiveness Project (FEP) to conduct research and help nonprofit organizations increase their fundraising results at a faster pace. The FEP launched the Growth in Giving Initiative (GiG) in 2012 to capitalize on the vast amount of data about giving patterns that fundraising software vendors collect on an ongoing basis. The goal of the GiG is to provide researchers, scholars, and professional fundraisers access to a database of anonymized gift transactions that can be used to illuminate trends in different sectors. For more information and access to the free, downloadable FEP Fundraising Fitness Test, visit www.afpfep.org.