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Despite Global Economic Uncertainty, Nonprofits Are Optimistic Heading into 2012

(October 25, 2011) There is a growing sense of optimism in the nonprofit sector globally regarding growth in staffing and earned and charitable income, especially when looking forward to 2012, according to a new report.

“Studies such as the Nonprofit Research Collaborative, which AFP is a part of, and others indicate economic conditions are improving, albeit slowly, and leading to increases in giving overall.,” said Andrew Watt, FInstF, president and CEO of AFP, who provided commentary in Blackbaud’s 2011 Global State of the Nonprofit Industry report. “Rising giving levels are what is driving the sense of optimism and, in turn, anticipated growth in staffing. Part of that optimism is the nature of our missions—nonprofits work to create change and inspire the public. We tend to be optimists, but with a healthy dose of realism.”

Blackbaud’s annual State of the Nonprofit Industry Survey (SONI) is based on respondents from around the world based on a convenience sample of Blackbaud clients and others, rather than a random sample. The survey conducted in June 2011 had 2,203 responses from individuals in the nonprofit sector.

The majority of organizations indicate they expect to see an increased demand for their services in 2011 and 2012. To meet the projected increase in demand for services, organizations are primarily anticipating either constant or growing staffing levels in 2011 and are slightly more optimistic about increased staffing in 2012.

Direct Mail Still Going Strong

Most organizations continue to leverage traditional channels, even while they are increasingly using new interactive channels, according to the Blackbaud report. More than half of the organizations surveyed raise funds online and in most countries have shown growth in percentage raised online from 2010 to 2011. While most respondents use social media tools, they are directing their efforts towards potential donors, not communications with other constituent groups.

“Direct mail fundraising is at the core of most nonprofits,” said Holly Ross, executive director of the Nonprofit Technology Network (NTEN). “Entire institutions, processes and support systems have been built to support the direct mail empire in our sector. It's baked into our DNA, and changing that is tough.

“Direct mail has been around for a century now. By comparison, this online stuff is still really new. Nonprofits are still experimenting, finding what does work, and our donors are still getting used to the idea of giving online. So at the end of the day, nonprofits aren't replicating the success of offline fundraising, but they are defining success in a new venue.”

One Donor, Multiple Channels

Nonprofit organizations throughout the world feel that managing relationships with supporters, new donor recruitment, and impact reporting are critical; however, they do not feel they are doing a great job with these practices.

“The single biggest challenge with supporter management is campaign integration,” said fundraising professor and consultant Adrian Sargeant. “Nonprofits need to do more to integrate the online with their offline and their fundraising with their advocacy and campaigning. Donors want one coherent relationship with the organizations they support, not multiple relationships with half a dozen different teams.”

Regarding donor recruitment, Sargeant said that smarter acquisition is the key. “We should move away from short term measures of acquisition performance such as the cost per donor, response rate, average donation, etc. and focus on spending a little more to recruit donors that will have a higher lifetime value.”

Lastly, when it comes to impact reporting, he advises nonprofits to look to their peer organizations to create their own dashboards of relevant performance metrics to provide stakeholders with a rounded picture of organizational impact.

This survey was fielded in June 2011 and reports on data from 2,200 respondents in the UK, France, Germany, Holland, Italy, USA, Canada, Australia and New Zealand. For more information about the report, go to www.blackbaud.com/industryanalysis.



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