The Value of FEP
by Elizabeth Boris
The Center on Nonprofits and Philanthropy at The Urban Institute is enthusiastic about cosponsoring the Fundraising Effectiveness Project (FEP).with the Association of Fundraising Professionals. This initiative began in November of 2005 when Bill Levis and Cathy Williams suggested that AFP and CNP collaborate on research activities that address the over arching question: why after 40 years hasn’t the sector been able to tap an enormous giving potential and gain a larger than 2 percent share of the GDP?
This initiative is already making good progress.
First, we have identified a need to change the way decision makers at all levels in the nonprofit sector think about investing more money in fundraising. The FEP is calling for a paradigm shift in focus from efficiency (minimizing fundraising costs) to effectiveness (maximizing growth in giving). The focus of the initiative is to effectively invest enough money in fundraising to raise 3 percent of the GDP.
Second, with data from its pilot 2004-05 survey, the FEP is beginning to provide nonprofit fundraisers, CEOs and board members with the performance data they need on fundraising effectiveness in order to make informed, growth-oriented budget decisions that can increase giving at a faster pace.
Third, the involvement of the donor software community has been essential to the design and implementation of the all-electronic, web-based annual surveys and data distribution. With their assistance and through their access to 65,000 nonprofit clients, we are creating the groundbreaking FEP Fundraising Performance Database, jointly owned and operated by AFP and CNP.
Fourth, preliminary analysis of the pilot survey data indicates that the sector could increase its share of the GDP from 2 percent to 3 percent in 10 years with only a 10 percent – or less -- reduction in losses from lapsed and downgraded donors. Minimizing losses in giving adds a major new and unexplored dimension to America’s enormous untapped giving potential.
Fifth, we have successfully recruited other important FEP sponsors, including the Council for Advancement and Support of Education (CASE), Council for Resource Development (CRD), Center on Philanthropy at Indiana University (COP), and National Committee on Planned Giving (NCPG). We are also inviting other groups to join the FEP initiative.
Sixth, Research to support the Fundraising Effectiveness Project mission is vital to its ongoing success and is on our joint research agenda.
Finally, CNP is truly pleased to be collaborating with the AFP on this important initiative to increase philanthropy’s share of the GDP.
The chart above supports the “2% to 3% of GDP in 10 years” statement in the fourth item above. Contact QRLevis@aol.com for clarification if needed.
 Cathlene Williams is Vice President for Research at the Association of Fundraising Professionals. Bill Levis is a Senior Associate with the Center on Nonprofits and Philanthropy at The Urban Institute and a member of AFP since 1971.
Related AFP ResourcesDoes Your Organization Have “Relationship Capital?”
Overall Giving Returns to Pre-Recession Levels, Study Finds
Women Drive Philanthropic Decisions in Wealthy Households, but Nonprofits Must Work for Their Trust, Study Finds
We Need a Hero: Writing Donor-Centered Email Appeals
Why Matching Gifts Work