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Index of National Fundraising Performance

Post-Disaster Revenue Correction of 2006 Is Over; Declining Donor Populations Are A Longer-Term Concern

Cambridge, MA (April 5, 2007)-- Fourth quarter 2006 results from the Target Analysis Group Quarterly Index of National Fundraising Performance indicate an end to the post-tsunami and post-hurricane revenue declines that dominated most of the year. A longer-term trend that causes concern, however, is a general decrease in donor populations.

Within the last two years, a pair of significant natural disasters had a profound effect on national charitable giving. The Indian Ocean tsunami of December 2004 and the U.S. Gulf Coast hurricanes in the fall of 2005 generated unprecedented non-profit revenue. Within the National Index, donors directed most of their tsunami-related giving to international relief organizations and most of their hurricane-related giving to animal welfare and human services organizations, and the increase in giving related to both disasters was large enough to create a noticeable lift in median revenue for the entire National Index in 2005.

In 2006, after the immediate effects of the tsunami and hurricanes on giving subsided, index revenue and donor numbers declined substantially. As expected, declines were particularly severe for the three sectors that had received the most disaster-related giving, but showed up to some extent for most other industry sectors as well. The entire index had generally negative trends across all key measures in the first three quarters of 2006 as organizations experienced a correction from the disaster-related spike back to more typical giving levels.

In the fourth quarter of 2006, for the first time in over a year, median revenue growth for the index was again positive. As a result, revenue for the entire year of 2006 grew a median 0.7% over 2005. This is an encouraging sign and is an indication that donors have returned to their pre-disaster giving patterns.

Although revenue appears to be back on track, donor numbers have nevertheless continued to decline. Median donor counts are down 2.8% from 2004 to 2006, and have fallen a cumulative 1.4% over the past five years. This appears to be due not only to declines in new donor acquisition, which is down 6.7% over the last two years, but also to declines in both first-year and multi-year retention rates.

Organizations have been able to compensate for these donor declines so far with increases in revenue per donor, enough to keep revenue growth ahead of inflation, but at some point these increases alone may not sustain overall donor growth. "Non-profits appear to be in a period of relatively normal revenue growth right now," said Rob Harris, Vice President of Analytic Products at Target Analysis Group. "But it will be important to monitor donor growth rates because continuing declines could jeopardize revenue in the long term."

To read the complete summary of the findings, please click here. (Name and email required to access files.)

If your organization is a participant, please visit the National Index website. Contact info@targetanalysis.com to see if your organization qualifies for inclusion in the ex of Fundraising Performance.

About Us

Target Analysis Group delivers data-driven, collaborative solutions designed to help non-profit organizations maximize their fundraising potential. Founded in 1989, Target Analysis Group was the first company to bring forward-thinking non-profit organizations together to establish industry-standard benchmarking and openly discuss successful strategies and practices.

To read the complete summary of the findings, please click here.