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Nearly Two-Thirds of U.S. and Canadian Charities Raised More Funds in 2005

(April 3, 2006) Despite the largest single relief effort in history for Hurricane Katrina, nearly two-thirds of charities in the United States and in Canada managed to raise more funds in 2005 than in 2004.

The Association of Fundraising Professionals’ (AFP) State of Fundraising Survey 2005 found that 63 percent of U.S. charities raised more money in 2005 than in the previous year, while 13 percent raised about the same amount and 24 percent raised less. The 63 percent figure is only two points lower than in 2004, when 65 percent of U.S. charities raised more money than in the previous year.

More than 66 percent of surveyed charities reached their fundraising goal, and 61 percent set 2005 goals that were higher than their 2004 goals.

Putting the numbers into the context of the charitable sector, it is estimated that more than $250 billion was raised by charitable organizations in 2004 (according to Giving USA, Giving USA Foundation data) and that number is expected to be higher in 2005. The total assets of the charitable sector exceed $1.76 trillion, and that number has doubled over the past 10 years (National Council of Nonprofit Associations).

“The figures from the last two AFP State of Fundraising Surveys certainly complement these statistics and show a very positive trend in fundraising levels over the past two years since a slight trough in 2002–2003,” said AFP President and CEO Paulette V. Maehara, CFRE, CAE. In 2002 and 2003, only 49 and 54 percent of charities raised more money than in the previous year, respectively.

While some charities believed that the relief efforts for Hurricane Katrina would dramatically affect giving to nonrelief charities, the survey results proved otherwise. Two-thirds (67 percent) of respondents reported no immediate impact on their organizations’ fundraising from the relief efforts, and 94 percent believed they would experience no long-term effects.

“We heard the term ‘donor fatigue’ used a lot in 2005 to describe how donors might be feeling weary of charitable solicitations and not interested in giving to nonrelief organizations,” Maehara said. “However, it’s clear that a large majority of organizations didn’t experience donor fatigue. We’ve also seen this in previous years—the terrorist attacks on Sept. 11 in 2001 and the Southeast Asia tsunami in 2004. These sorts of tragedies bring out the best in people and frequently lead to gifts from people who have never given, as well as additional giving from established donors.”

The survey also examined different types of fundraising that offered mixed results. Direct mail, online fundraising and special events were less successful, down 7 to 9 percent (the percentage of organizations raising more money in 2005 compared to the previous year). Major-gift fundraising dropped 3 percent and telefundraising decreased 2 percent, while planned giving saw a 3 percent increase.

“In general, it was a very mixed year for various fundraising techniques,” said Alphonce J. Brown Jr., ACFRE, vice president of development for the National Association of Public Administration in Washington, D.C., and chair of AFP. “It’s important to remember that 2004 was the best year for U.S. charities in the five-year history of the survey, so a slight drop in 2005 performance is not surprising. Overall though, a majority of charities fared very well.”

What was the single biggest challenge that U.S. fundraisers cited for 2005? Unlike last year, respondents cited “too many nonprofits and increased competition for the charitable dollar” (16.8 percent) as their No. 1 concern. In fact, 2005 marked the first time that increased competition, rather than the economy, was ranked as the biggest challenge. Other challenges included:

  • the economy (13.6 percent)
  • staffing issues in the development office (12.6 percent)
  • brand awareness of charity and mission (10.1 percent)

Despite these challenges, U.S. charities continue to be optimistic about their fundraising success for 2006. Nearly 70.0 percent believe their organizations will raise more funds in 2006 than in 2005, while 21.9 percent think they will raise about the same and 8.1 percent believe they will raise less funds.

2005 a Good Year for Most Canadian Charities

More than 64 percent of Canadian respondents raised more money in 2005 than in 2004, while 10 percent raised about the same and 26 percent raised less. With regard to the effects of relief efforts for Hurricane Katrina, more than 84 percent of respondents reported no immediate impact on their organizations’ fundraising and 95 percent believed they would experience no long-term effects.

In the 2004 survey, however, 63 percent of Canadian respondents said that relief efforts for the Southeast Asia tsunami had no impact on their fundraising and 91 percent felt there would be no long-term impact from the relief efforts.

The exact same percentage of Canadian charities as American charities (66 percent) reached their fundraising goals in 2005.

Results for various fundraising techniques in Canada were much different than in the United States. Canadian charities saw substantial increases (11 percent) in direct mail success (the percentage of organizations raising more money in 2005 compared to the previous year), as well as smaller increases in telefundraising and planned giving. However, there were decreases in major gifts (5 percent), online fundraising (10 percent) and special events (5 percent).

Canadians also felt that too many nonprofits and increased competition for the charitable dollar was the single biggest challenge for Canadian fundraisers (18.6 percent). This is the second consecutive year that Canadian respondents have selected increased competition as their most serious challenge. Other challenges for Canadian nonprofits included:

  • staffing issues in the development office (15.4 percent)
  • brand awareness of charity and mission (10.5 percent)
  • problems with overall organization leadership, including the board, volunteers, etc. (10.5 percent)

Despite these challenges, 71.3 percent of respondents believe their organizations will raise more funds in 2006 than in 2005, while 18.7 percent think they will raise about the same and 10.0 percent believe they will raise less funds. This is the highest level of confidence for Canadian fundraisers in the four years that the State of Fundraising Survey Canada has been conducted.

The preliminary results of the AFP State of Fundraising Survey 2005 and the State of Fundraising Survey 2005 Canada were released during AFP’s International Conference on Fundraising in Atlanta. Final detailed reports will be available in May 2006 at www.afpnet.org.

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