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Signs of Growth as Nonprofits Push for Strong Year-End

(Oct. 26, 2010) With the exception of the months immediately following the Haitian earthquake, a monthly nonprofit revenue index shows that nonprofits have struggled to maintain positive year-over-year growth in 2010. They hope to see a rebound in the final months of the year.

Small organizations have shown encouraging signs of growth and larger nonprofits appear to be getting back to flat revenue levels, according to software and services provider Blackbaud. Medium-sized organizations appear to be slower in gaining momentum towards improving their fundraising revenue.

Online fundraising has been the exception to this trend and has continued to reflect year-over-year growth for the past 12 consecutive months. Organizations of all sizes are experiencing growth through this fundraising method.

As nonprofits enter the final months of the year, it will be important to watch for signs of recovery and stability.

Some Good Signs

The Blackbaud Index of Charitable Giving reports that overall revenue increased by 1.4 percent for the three months ending August 2010 as compared to the same period in 2009. This was a move back into positive territory from July's 4.5 percent decline. This trend is based on $2.2 billion in 12-month revenue accumulated from 1,364 nonprofit organizations.

Blackbaud also provides additional data and analysis that reports on organizations by size. Here, the Index found that three-month overall revenue for small organizations (prior year revenue of < $1 million) increased 11.2 percent during the 3 months ending August 2010, while overall revenue at medium organizations (prior year revenue of $1 - 10 million) decreased 1.9 percent, and overall revenue at large organizations (prior year revenue > $10 million) decreased 0.2 percent during the same period.

The newly released Blackbaud Index of Charitable Giving for human services organizations reports an overall revenue decrease of 19.3 percent for the 3 months ending August 2010 as compared to the same period in 2009. This trend is based on $640 million in 12-month revenue from 431 human services organizations.

The Online Trend

The Blackbaud Index of Online Giving reports that overall revenue increased by 20.4 percent for the 3 months ending August 2010 as compared to the same period in 2009. This was an increase over July's positive trend of 12.4 percent growth. This trend is based on $407 million in 12-month online revenue from 1,676 organizations.

The Index found that three-month online revenue for small organizations (prior year revenue of < $1 million) increased 28.7 percent in August, while revenue at medium organizations (prior year revenue of $1 - 10 million) increased 14.3 percent, and revenue at large organizations (prior year revenue > $10 million) increased 23 percent.

The Blackbaud Index of Online Giving reports that human services organizations had an overall revenue increase of 20.5 percent for the 3 months ending August 2010 as compared to the same period in 2009. This trend is based on $48 million in 12-month revenue from 511 human services organizations and was an increase from July's 10.3 percent growth trend.

Up and Down Economy

Lynn Edmonds, president of LW Robbins, a direct response fundraising agency serving national and regional nonprofits, provided commentary on The Blackbaud Index in a report that accompanied this month's update. "The summer months were particularly difficult as the economy took a hit and people's attention was brought back to the economy," said Edmonds. "The economy was starting to show some good signs, and then in May through July, the market dropped thousands of points, people stopped spending, and unemployment hit a high; that particular period was very difficult. The economy is bouncing back a little now. People who have some discretionary income will hopefully support their charities in the final months of 2010."

According to Edmonds, online giving in general (without emergency giving) is a small percent of overall giving, but is becoming a channel that donors are becoming more comfortable with. "For a while, it was almost optional, but now, it is essential," she said. "Most donors give to five to seven like-minded organizations." She commented that organizations need to stay in front of the donor in multiple channels to keep their awareness and brand front and center.

Mark Crozet, Habitat for Humanity International's senior vice president of resource development reported that the organization did see a spike in revenue earlier this year, largely around its Haiti response. "We haven't seen the dip over the last few months although revenue has flattened," he said. "In direct mail, we're still up over last year at this time, although our corporate and major gift numbers are definitely down. We're hoping year-end giving reverses that trend."

The Blackbaud Index of Charitable Giving launched in June 2010 and was followed by the release of The Blackbaud Index of Online Giving in July. These indices are updated on the 15th of each month and are based on a three-month moving average of year-over-year percent changes in revenue. (Read more about the methodology at www.blackbaud.com/blackbaudindex.)



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