AFP State of Fundraising 2006 Final Report Released
(July 16, 2007) The final report of AFP's State of Fundraising 2006 Survey is now available online in the Attachments section below (PDF format).
The executive summary from the report is below.
In early 2007, AFP asked a representative sampling of its U.S. members to compare their organizations’ fundraising totals at the end of December 2006 to their fundraising totals at the end of December 2005.
Some of the key questions that AFP wanted to learn answers to included:
- How did fundraising fare in 2006 compared to 2005?
- What fundraising techniques did especially well or poorly in 2006?
- What types of organizations excelled at fundraising in 2006 (small organizations, education groups, etc.)?
- What key challenges did fundraisers face in 2006?
- Did fundraisers solicit giving through the IRA Rollover, a new giving vehicle created through the 2006 Pension Protection Act?
In the United States, nearly seven out of 10 charities raised more money in 2006 than in the previous year. Overall, 69 percent of respondents said their organizations generated more fundraising dollars than in 2005, with 22 percent reporting increases of 50 percent or more.
This 69 percent figure, more than six points greater than reported in 2005, is the highest in the six-year history of the report, the previous high being 65 percent in 2004. Nearly a quarter of U.S. charities (24.1 percent) raised less money in 2006 than in 2005, remaining on par with last year’s rate, while 6.9 percent raised about the same amount as in the previous year (compared to 12.6 percent who reported similar fundraising results in 2005 as compared to 2004).
Increases in 2006 compared to 2005 were seen across the board in every category. Overall, environmental, public/society benefit and education organizations fared the best when comparing subsectors, while charities in the Midwest, Mid-Atlantic and the Pacific performed the best when comparing regions. Nonprofits of all sizes fared exceptionally well, although mid-size charities (budgets between $1 million and $3 million) excelled the most.
About 65.5 percent of surveyed charities reached their fundraising goal, with nearly 58 percent of respondents raising more than $1 million in 2006, about seven points greater than in 2005.
About 90 percent of organizations spent less than 30 percent of their funds raised on development costs, with 30 percent of respondents spending less than 10 percent on fundraising efforts in 2006. One respondent attributed her increased costs associated to fundraising as money well spent and an investment for the future. “The development office had a full fundraising staff,” she said. “This increased our costs of fundraising as a percentage of dollars raised, but allowed us to take the first crucial step in building the fundraising program.”
The survey also examined different types of fundraising, which experienced significant gains in 2006. Respondents reported double-digit increases in fundraising success (i.e., raising more money in 2006 than in 2005) for every development method queried, including direct mail, telefundraising, major gifts, online giving, special events and gifts in-kind. Online giving saw the biggest increase, with about 88 percent raising more money in 2006 than the year before, compared to 54 percent in 2005. Major gifts and special events experienced increases of nearly 20 points.
Fundraising results have shown increases over the history of the State of Fundraising Report, but the gains of 2006 point to the culmination of several trends. In 2006, fundraisers experienced the intersection of a gradually growing economy, increased public awareness of philanthropy and a year relatively free of controversies and relief campaigns. Unlike other years, 2006 did not feature a massive relief campaign for a natural disaster or a major charitable controversy, and the publicity of large gifts, such as that made by Warren Buffett, put a positive spotlight on philanthropy, possibly encouraging charitable giving.
In fact, one respondent to the survey said, “Giving is ‘in’ now; all the cause marketing is really putting nonprofits in the media.”
The Most Challenging Issues
This year, the survey asked questions regarding the impact of politics and policy. Specifically, respondents were queried about the effects of the new giving mechanism, the IRA Rollover, on their fundraising. Additionally, they were asked about whether the Democrats’ taking over congressional leadership would have any effect, positive or negative, on development efforts in 2007.
What issues were of the greatest concern to U.S. fundraisers in 2006? Unlike previous years when the greatest challenges had been external to an organization—the economy or increased competition—the top two challenges were internal. Respondents cited “staffing issues in the development office” (15.8 percent) and “problems with overall organization leadership” (14.8 percent) as their greatest challenges in 2006. Other challenges included:
- too many nonprofits/increased donor competition (12.7 percent)
- the economy (10.8 percent)
- brand awareness of charity and mission (9.2 percent)
U.S. charities do not consider these challenges insurmountable to their fundraising success in 2007. Remaining optimistic, 67 percent of U.S. charities anticipate raising more revenue in 2007 than they did in 2006, while 22.3 percwent think they will raise about the same and 8.7 percent believe they will raise less funds.
The final report of AFP's State of Fundraising 2006 Survey is available online in the Attachments section below (PDF format).