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Research: AFP State of Fundraising 2007 Final Report Released

(Oct. 20, 2008) Fundraising revenues increased from 2006 to 2007 for two-thirds of charities, but their gains dropped dramatically, according to the final report of AFP’s State of Fundraising survey. The full report is available in the Members Only section of the website (login required) and has data about different types of fundraising, board giving and key issues affecting fundraising.

In February and March 2008, AFP asked a representative sampling of its U.S. and Canadian members to compare their organizations’ fundraising totals at the end of December 2007 to their fundraising totals at the end of December 2006.

Some of the key questions that AFP wanted to learn answers to included:

  • How did fundraising fare in 2007 compared to 2006?
  • What fundraising techniques did especially well or poorly in 2007?
  • What types of organizations excelled at fundraising in 2007 (small organizations, education groups, etc.)?
  • What key challenges did fundraisers face in 2007?
  • For U.S. participants, did they think that the current economic down that was being experienced in late 2007 and early 2008 would continue to affect fundraising later in the year?

Modest Increases

In the United States, 65 percent of organization raised more funds in 2007 compared to 2006, while 24 percent of respondents raised less funds, and 11 percent raised about the same amount. The 65 percent figure represents a four-percent drop from the previous year (69 percent in 2006), but is very similar to success rates seen in 2005 and 2004.

The key difference was in the amount of money raised. In 2006, almost a quarter of respondents (23 percent) raised saw fundraising revenue increase by more than 50 percent. In contrast, just nine percent of charities experienced similar increases in 2007. Fundraising increases were more modest, with 38 percent of charities reporting increases of less than 20 percent.

Large Majority Reached ’07 Goals

Despite the smaller increases in funds raised, more than three-quarters (76 percent) of respondents reached their fundraising goal in 2007. This success was not because of lower fundraising goals either. Almost two-thirds (64 percent) set fundraising goals that were higher in 2007 than in 2006, while 18 percent had goals that were similar to those in 2006 and 17 percent set goals in 2007 that were lower than in 2006. Of those organizations that set higher goals in 2007, 84 percent had goals that were between one and 30 percent higher.

Every different fundraising technique measured in the survey (direct mail, telemarketing, major gifts, planned giving, online fundraising and special events) saw significant decreases in success compared to 2006, except for planned giving. Direct mail success (the percentage of organizations raising more money in 2007 using direct mail compared to 2006) dropped by 14 percentage points, major gifts by 13 percentage points and special events by 17 percentage points. Even the success rate for planned giving grew by just two percentage points.

However, not every type of organization was affected in the same way. Larger organizations fared much better than smaller ones, with 70 percent of charities with budgets of $5 million or greater raising more money in 2007 than in 2006. In contrast, just half of organizations with budgets of $500,000 or less raised more money in 2007 than in 2006.

Concerns About Economy

When asked to rank the top four fundraising challenges they faced in 2007, participants overwhelmingly chose the economy. Sixty-three percent of respondents ranked the economy as one of the top four challenges in 2007, and 30 percent of respondents chose it as the most critical issue.  No other issue came close, though participants also cited “increasing competition for the charitable dollar” and “staffing issues in the development office” as other key issues.

The effect of the 2008 presidential elections upon fundraising is expected to be slight, with 55 percent saying that the process will have “little or no” impact. However, opinions on the economy were much more mixed. Twenty-eight percent predicted the economy would have “a lot” or “significant” impact upon their fundraising in 2008, while 41 percent said the impact would be “little” or “minor.”

Looking ahead to the rest of 2008, just 58 percent of fundraisers believe their organizations will raise more money this year than in 2007. That level of optimism is nine percentage points lower than last year’s confidence level and is the lowest since 2002 in the wake of the events of Sept. 11.

Click here to access the full report (member login required).

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