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Charitable Fundraising Hit New Low in 2008

(March 31, 2009) Less than half of charities raised more money in 2008 than in 2007, and fundraising gains dropped significantly across the board, according to figures released by AFP at the 46th International Conference on Fundraising in New Orleans, La.

AFP’s eighth annual State of Fundraising Survey asked charities to compare their fundraising totals in 2008 to their figures in 2007. Overall, just 46 percent of organizations raised more funds in 2008, a new low in the eight-year history of the survey. In a typical year, about 60 percent of respondents raise more money compared to the previous year. The previous low was reported in 2002 when just 49 percent of organizations raised more money that year than compared to 2001.

In addition, the percentage of organizations raising less money in 2008 compared to 2007 (40 percent) was an all-time high. Another 14 percent raised about the same amount of money in both years.

The amount of money raised also dropped substantially. Of the organizations that did raise more money, nearly two-thirds saw increases of 20 percent or lower. In addition, just five percent of respondents reported fundraising increases of 50 percent or more. In comparison, just two years ago, almost one quarter (23 percent) indicated increases of 50 percent or more.

“Based on the survey results and anecdotal evidence from our members across the country, this is probably the most challenging environment that most fundraisers have seen in their lifetimes,” said Paulette V. Maehara, CFRE, CAE, president and CEO of AFP. “The dip in fundraising is particularly discouraging given the increased demand for services as many people suffer from the economy.”

Fundraising decreases were seen across the board, regardless of cause, size or geography. In addition, each fundraising technique measured in the survey (direct mail, telemarketing, major gifts, planned giving, online fundraising, special events and corporate/foundation grants) saw significant decreases compared to 2007. The percentage of organizations raising more money using major gifts, traditionally one of the strongest and most resilient methods of fundraising, fell from 63 percent in 2008 to 43 percent in 2007. Similarly, direct mail success (another popular and typically successful technique) fell from 51 percent in 2007 to just 38 percent in 2008.

The only type of fundraising where a majority of respondents reported raising more funds in 2008 compared to 2007 was online solicitations. However, online fundraising typically accounts for a very small percentage of overall charitable revenue, so even this result had a very minor impact on total fundraising.

When asked to identify the top four fundraising challenge in 2008, participants overwhelmingly chose the economy. Almost eighty percent rated the economy as one of the top four challenges they faced in 2008, and 57 percent rated it as the top challenge. The second most challenging issue overall was attracting new donors, selected by 48 percent of respondents as one of the top four issues, and was selected by 5 percent as the top challenge.

Looking ahead to the rest of 2009, just 28 percent of fundraisers believe their organizations will raise more money this year than in 2008. That level of optimism is the lowest by far in the history of the survey. About one-third estimate they will raise less in 2009.

In terms of strategy for 2009, a large percentage of organizations will be increasing their activities in major gifts, planned gifts, online solicitations and corporate and foundation grants. These activities are typically less expensive and/or focus on existing donors who already have strong connections to a charity. In contrast, very few organizations said they would be increasing their direct mail, telefundraising and special event efforts, which are typically more expensive and typically are used to attract new donors.

“Charities have been through difficult times before, most recently after the events of Sept. 11, 2001, and many weathered that storm,” said Maehara. “We must learn from those lessons and ensure that we don’t panic, but focus on the long-term and emphasize donor cultivation and stewardship. Make no mistake, this is a very challenging economy, but charities should remember that they still retain control over their circumstances. With the right planning, strategy and implementation, charities can overcome these challenges, and AFP is committed to providing resources to the sector to help organizations find success.”

A full report about the results will be available later this year.

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