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AFP State of Fundraising 2004 Report Released

(April 4, 2005) According to findings of the Association of Fundraising Professionals (AFP) annual State of Fundraising 2004 survey, charitable fundraising in 2004 was robust and fundraisers are optimistic about 2005 fundraising efforts in spite of the unexpected need to raise substantial funds in support of tsunami relief for South Asia.

One of the most significant philanthropic events in 2004 occurred during the last week of December. In spite of the tremendous outpouring of support for tsunami relief efforts in South Asia, however, the majority of charitable organizations in the United States and Canada reported that tsunami giving did not negatively affect their fundraising efforts, according to preliminary data released today during AFP's International Conference on Fundraising in Baltimore, Md.

When asked if tsunami giving had affected their fundraising efforts, 84 percent of U.S. respondents claimed no effect, while almost 16 percent said it did have an impact. At the same time, 63 percent of Canadian respondents said the efforts had not affected their fundraising, but almost 37 percent said they were affected, both in terms of the number of contributions received and in the amount of funds raised.

It should be remembered that the American and Canadian federal governments allowed taxpayers to claim a tax deduction (in the United States) or credit (for Canadians) in tax year 2004 for contributions made in January 2005 for the tsunami relief efforts. Despite these added incentives, almost 90 percent of U.S. respondents and 91 percent of Canadian respondents said they did not expect any long-term effect from the tsunami giving.

Overall, respondents said giving was strong in 2004. In the United States, 64.9 percent of respondents raised more money in 2004 than in 2003. This is the highest percentage to report a positive variance in the four years the association has conducted the survey. Furthermore, 44.6 percent of U.S. respondents raised at least 10 percent more money in 2004 than in 2003 and 24.9 percent reported that they had raised at least 20 percent more money.

A little more than 10 percent of U.S. respondents said they raised the same amount in 2004 as in 2003 (compared to 26 percent in 2003) and 24.7 percent reported they raised less (compared to 20 percent in 2003).

In Canada, 62.4 percent of respondents said they raised more money in 2004 than 2003, with 40.4 percent raising at least 10 percent or more money in 2004 than in 2003 and 23.7 percent raising at least 20 percent more money. Slightly more than 12.4 percent of Canadian respondents raised the same amount in 2004 as in 2003, while 25.3 percent reported they raised less.

Not only did the majority of respondents raise more funds in 2004, but they also met their fundraising goals. In the United States, 60.8 percent of respondents reached their fundraising goal in 2004 while 30.1 percent said they did not. Fifty-six percent of U.S. respondents had a higher fundraising goal in 2004 than they did in 2003 (34.3 percent had a goal at least 10 percent higher than in the previous year), 22.6 percent had about the same fundraising goal for the two years and 21.4 percent had a lower fundraising goal.

In Canada, 64.2 percent of respondents reached their fundraising goal in 2004, while 28.9 percent reported they did not. Slightly more than 54.4 percent of Canadian respondents had a higher fundraising goal in 2004 than they did in 2003 (33.2 percent had a goal that was at least 10 percent higher than in the year before), 20.1 percent had about the same fundraising goal for the two years and 25.5 percent had a lower fundraising goal.

'We also asked participants how their various types of fundraising--direct mail, telefundraising, planned giving, major gifts, special events and online giving--fared in 2004 versus 2003,' said AFP President and CEO Paulette V. Maehara, CFRE, CAE. 'In general, most [60-65 percent] of the organizations reported raising the same amount or more in each specialty in 2004 than in the previous year.'

What issues were of greatest concern to professional fundraisers in 2004? In the United States, 17 percent of the respondents cited the economy as the single most important detriment to fundraising in 2004. Other issues that negatively affected their fundraising included increasing competition for the charitable dollar (14.9 percent), developing fundraising strategies and overall strategic planning of an organization (8.4 percent), brand awareness of charity and mission (7.8 percent) and staff issues in the development office (7.5 percent).

In Canada, 18.7 percent of respondents said that too many nonprofits and increased competition for the charitable dollar negatively affected their fundraising in 2004. Other challenges cited included staffing issues in the development office (13.1 percent), brand awareness of charity and mission (12.3 percent) and problems with overall organization leadership--board, volunteers and staff (10.4 percent).

This year's survey included some new questions, including board participation. In the United States, more than 50 percent of respondents reported that at least 90 percent of their board of directors contributed to their organizations in 2004. In Canada, 33 percent of respondents reported board participation at greater than 90 percent. However, almost 10 percent of U.S. respondents and 18 percent of Canadian respondents indicated very little board participation.

Questions about cultivating new donors and donor stewardship also were included in the survey. Approximately 30 percent of U.S. respondents indicated that 6-10 percent of their donors were new to the organization in 2004, while 41.7 percent said that 11 percent or more of their donors in 2004 were new. In addition, current donors increased their giving, with 36 percent of respondents indicating that 11 percent or more of their current donors increased their gifts in 2004 and 28.2 percent saying that 6-10 percent of their continuing donors increased their gifts.

In Canada, 24.3 percent of respondents indicated that 6-10 percent of their donors were new to the organization in 2004, while 42.5 percent reported that 11 percent or more of their donors in 2004 were new. Also, 40.4 percent of respondents indicated that more than 11 percent or more of their return donors increased their gifts in 2004 and 22.7 percent said that 6-10 percent of their continuing donors increased their gifts.

Looking ahead for the rest of 2005, 72 percent of U.S. respondents believe that they will raise more money than they did in 2004, while 22.4 percent felt they would raise approximately the same and 5.6 percent believed they would raise fewer funds.

The Canadians are a little less optimistic, with 65.2 percent of respondents reporting they believe they will raise more money in 2005 than they did in 2004, 24.6 percent saying they would raise approximately the same and 10.2 percent indicating they would raise fewer funds. 'Overall, 69.6 percent of respondents said they would raise more in 2005 than in 2004, 23.2 percent said they expected to raise about the same amount and 7.2 percent said they anticipated fewer donations in 2005 than in 2004. That is the most optimism we have seen in the four years of the survey,' Maehara said.

The full State of Fundraising 2004 report will be available on the AFP website in June 2005.

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