The March 2013 update to The Blackbaud Index of Charitable Giving is significant because it now covers more than $10 billion in overall charitable giving. The Blackbaud Index of Online Giving now covers more than $2 billion online donations. For nearly three years now, Blackbaud has continued to expand the number of organizations and giving represented in the analysis.

Overall Fundraising Trends

The Blackbaud Index of Charitable Giving is a broad-based fundraising index that reports total revenue trends of 3,200 nonprofit organizations representing over $10 billion in yearly revenue on a monthly basis, both offline and online. The Index is based on actual revenue statistics from nonprofit organizations of all sizes representing arts, culture, and humanities; education; environment and animals; healthcare; human services; international affairs; public and society benefit; and religion sectors.

The Blackbaud Index of Charitable Giving reports that overall revenue decreased by 1.1% for the 3 months ending March 2013 as compared to the same period in 2012. This is the first negative trend in 6 months. A 2% decline by large nonprofits and a slight decline by medium-sized nonprofit contributed to the overall negative trend.

Public and Society Benefit organizations were down 8.6% on a YOY basis and that is the third straight month of decline by this sector. Many other sectors include Healthcare, Human Services, and International Afairs are also trending negative.

Online Fundraising Trends

The Blackbaud Index of Online Giving is a broad-based fundraising index that reports online revenue trends of more than 2,500 nonprofit organizations representing over $2 billion in yearly revenue on a monthly basis. The Index is based on actual revenue statistics from nonprofit organizations of all sizes representing arts, culture, and humanities; education; environment and animals; healthcare; human services; international affairs; and public and society benefit sectors.

The Blackbaud Index of Online Giving reports that online revenue increased by 7.8% for the 3 months ending March 2013 as compared to the same period in 2012. It is worth noting that this is the first time in well over a year that the growth rate dropped below double digits.

Small organizations continue to have strong growth with a YOY increase of just over 9%. Sharp declines by International Affairs and Healthcare organizations pull down The Blackbaud Index of Online Giving. There is still very strong growth among Environment and Animal Welfare, Human Services, and Arts and Cultural organizations.

Please visit The Blackbaud Index for more information and interactive charts.

The headline from the report wasn’t overly optimistic: charitable giving in 2012 was nearly flat, up 1.7 percent (not adjusted for inflation) as we all continue what’s turning out to be a very slow economic recovery.

Follow the link to continue reading the story via Huffington Post.

But over time I have learned to love the online average gift size metric. There are some interesting and insightful trends when you really dig into the data. So I looked at nearly $500 million in online giving from over 2,500 nonprofits in 2012.

Here are five facts about online average gift sizes that I hope you’ll love too:

1. The Online Average Gift Size was $146 in 2012: Online gifts tend to be larger than traditional offline fundraising gifts, especially direct mail giving. More importantly, the online average gift in 2012 was up from $132 the prior year.

2. Education Institutions have the Largest Online Average Gift Size: The Education sector leads the way with an online average gift size of $629. The shows the real potential for significant online gifts.

3. Healthcare Organizations have the Smallest Online Average Gift Size: The Healthcare sector has an online average gift of $94. The prevalence of smaller peer-to-peer fundraising gifts contributes to a lower gift size compared to other sectors.

4. Online Average Gift Size has Seasonality: The size of an online gift changes a lot during the year. Every single sector sees fluctuations throughout the entire year. This reinforces the need to be change your online ask amounts throughout the year.

5. Online Average Gifts Size More Than Doubles in December: We already know that a lot of online giving happens in December. But did you know that the average gift size more than doubles in December? Even with all that extra volume the average gift size goes up.

Compare your own online average gift size trends to the chart above. How are you trending? Consider adjusting your online donation form ask amounts over time. Test different ask amounts with different groups. Whatever you do just don’t keep doing the same things over and over again.

“Measuring Your Return on Investment in Multichannel Fundraising Campaigns” explores three key questions to optimize an integrated fundraising program:

1. How much money should you invest in online acquisition of newdonors compared to direct mail acquisition?

2. How does the long-term value of a multichannel donor differ from the long-term value of a single channel donor?

3. What is the purpose of your fundraising efforts? is it just to raise dollars—or do want to acquire a number of advocates, volunteers, activists, etc.?

Peter Schoewe outlines a framework that helps to answer these questions:
- Establish the goal
- Start with the “I” in ROI—define Your investment
- Understand the “R” in ROI—calculate Your returns
- Measure the Multichannel return on fundraising investment for every fundraising activity

The whitepaper goes on in detail to explain ways that nonprofit organizations can work their way through the framework. It’s worth noting the importance of counting both direct and indirect costs accurately.

Peter points out that most indirect expenses, like having a website that accepts donations, must be considered the cost of doing fundraising and is independent of any single fundraising effort. Instead, focus on indirect costs that fall outside the usual cost of fundraising.

There is a case study that shows how this framework was applied to a nonprofit’s online acquisition program. It shows what we’ve seen for a while in multichannel donor analysis: online donors have higher initial value but are less loyal than offline acquired donors.

Another area of the whitepaper explores donors acquired in 2008 to measure the return on investment over three years. The case study found that the nonprofit could balance its acquisition investment between direct mail and online—while still achieving acceptable break-even goals through both channels.

You can download a copy of “Measuring Your Return on Investment in Multichannel Fundraising Campaigns” here.

But what would happen if we combined some commonly “overheard” phrases from the nonprofit sector with the most popular Internet memes?

I took a break from nonprofit data spelunking to create a few. Don’t recognize one of them? Then check out knowyourmeme.com

Note to self: If this gets a positive response, then I might have to re-think my blogging priorities.

The gap between urban and rural social networking use is relative.

Urban communities have the largest percentage of internet users on social networking sites (70%) but rural communities aren’t far behind (61%) and suburban communities are in between (67%).  Pew notes this as a significant gap but it seems more like an insignificant gap to me. What isn’t noted though is the percent of people in the communities are internet users to begin with.

20% of urban internet users are on Twitter.

Compared to the average of 16% of internet users in general who are on Twitter, urban communities have a higher concentration. If your nonprofit specifically focuses on providing services to urban communities, your case for using Twitter just got a little stronger.

73% of internet users with an income of $75,000+ are on Facebook.

Let’s be honest, darn near everyone who is online is on Facebook (67% of internet users). But internet users with a high income are on Facebook a little bit more. While few dollars still get donated directly through social networking sites, they do provide opportunities for nonprofit organizations to build stronger relationships with donors. Make sure you are sharing messages on Facebook that resonate with your donors – that doesn’t necessarily mean asking for money; it likely means sharing service delivery success stories.

That means working hard to strengthen their connection with existing donors, connect with prospective donors, and build their organization’s “culture of philanthropy” and fundraising capacity.

Here are some strategies that fundraising professionals say have been working in nine fields of interest.

Higher Education

In four years, North Carolina State University has overhauled its fundraising operation, investing heavily in infrastructure, increasing its advancement services staff, and converting its operating and development software systems, says John Taylor, associate vice chancellor for advancement services.

Its prospect management meetings now focus on strategies and assignments for approaching donors, and its advancement office sets expectations for major gift officers on the size of their portfolio, and on the number of asks and visits they should make.

And the school has been “asking people for money, and in particular for more money,” Taylor says.

Healthcare

Among the over 5,000 members of the Association for Healthcare Philanthropy, fundraising performance is the direct result of investment in fundraising capacity, including the size of the fundraising staff, says Bill McGinly, president.

Health care organizations that have been effective at fundraising also have provided ongoing training for fundraising staff; hosted activities that get donors to their facilities; engaged their volunteer and executive leaders; heightened contact with donors through more meetings and appeals; and reignited capital campaigns.

Human Services

Fundraising consulting firm L.W. Robbins in Holliston, Mass., has encouraged clients to focus on best practices, specifically by more testing of direct-response marketing strategies to acquire new donors and renew existing donors, says Lynn Edmonds, president.

For 35 Feeding America food banks that are clients, L.W. Robbins has tested variations of several direct-response “control packages” that have proved effective in acquiring new donors.

In one test, most local prospects the food banks were targeting in mailings received a control package that included an envelope with a standard-size letter and a reply slip. A smaller test group received a mini-greeting card customized to local prospects.

The test proved more effect than the control package and now has replaced it, so future testing will try new approaches to see if they prove more effective than the new control package.

Arts and Culture

Museums of all kinds are looking for ways to engage a broader mix of prospective donors, and to engage them in new ways, says Ford Bell, president of the American Alliance of Museums.

Increasingly popular strategies include social events for young people to museums; adding younger members to boards; offering opportunities to name positions, programs and facilities; and offering trips and tours.

Environment

To help boost its annual fund, the membership and development teams at the National Wildlife Federation have worked more closely with one another and tried to be more strategic and send more mail appeals to people giving over $1,000, says Anne Senft, vice president of philanthropy.

After five years of using mail for those donors, including multiple appeals a year, revenue from them has doubled.

Public and Society Benefit

Two direct marketing programs at Paralyzed Veterans of America focus on premium and non-premium donors, or those who receive a free item with the mail such as calendars or mailing labels, and those who do not, says Cathy Jenkins, director of direct marketing.

Last year, for the first time, the group sent non-premium donors a small rose made of cloth they could return so it could be used to make a wreath for Veterans Day, a strategy that generated a double-digit increase in the response rate.

International Affairs

In the wake of natural disasters, donors increasingly expect international relief charities to show results, says Bob Ottenhoff, president and CEO of the Center for Disaster Philanthropy.

International nonprofits, along with all nonprofits, also have seen an increasing number of gifts  restricted to particular programs or needs.

So nonprofits should make metrics about their operations and impact available to donors, and move beyond a one-size-fits-all case statement to a philanthropic strategy for each of its programs, he says.

Faith-based

In the faith-based market, direct mail, online strategies and Christian radio have proven effective in acquiring donors, says Rick Dunham, president and CEO of Dunham+Company.

Those strategies include testing targeted mailing lists to acquire new givers; using personalized communications through direct mail, telephone and email to convert those givers to donors; and providing “ongoing cultivation and retention, using direct mail and newsletters to keep a donor engaged, inspired and supporting the organization,” he says.

K-12 Education

Shady Hill School in Cambridge, Mass., last fall shortened the parent portion of its annual fund campaign in a new parent-led effort that aimed to generate 100 percent parent participation in 100 days, and raise $100,000 in challenge funding as an incentive, says Kimberly Kubik, director of advancement.

The challenge grant gave volunteer parent fundraisers “license” to talk about the importance of annual giving, she says. And because it met its parent goal, the school now can focus the remainder of the school year on alumni giving.

Development offices “have to be more open to engaging and partnering with dedicated volunteers,” Kubik says.

By Todd Cohen, founder of Philanthropy North Carolina, providing news, writing and advisory services for nonprofits.

The Charitable Giving Report analyzes trends from nearly $8 billion in fundraising revenue from 2012.

Key Findings

1. Overall giving continued its slow recovery and grew nearly 2% in 2012.
2. Online giving grew by about 11% in 2012 compared to 2011.
3. Online fundraising was 7% of all giving in 2012, an increase from 2011.
4. Small nonprofits had the greatest increase in overall fundraising in 2012 while medium-sized organizations led online.
5. Giving throughout 2012 hovered on flat, and Superstorm Sandy relief efforts helped boost year-end fundraising.

Trouble viewing the video above? Watch 5 Key Findings from the Charitable Giving Report on YouTube.

Overall  Giving Trends

Giving to religious organizations grew by 6.1% and this helped to lift overall giving as this sector receives the largest share of charitable dollars in the United States. Education institutions also had a positive year with 1.9% growth in fundraising compared to 2011.

These two sectors combine for 45% of charitable giving in the US. Arts and culture, as well as environment and animal welfare organizations were the only other sectors to experience fundraising growth in 2012.

Online Giving Trends

Online giving grew 10.7% in 2012 compared to 2011. Large organizations grew by 7.2%, medium sized organizations grew 14.3%, and small nonprofits grew 11.8% on a year-over-year basis.

Education organizations grew their online fundraising the most in 2012 with an increase of 17.9%. These nonprofits continued to have the largest growth rate for the second consecutive year.

Percentage of Total Fundraising from Online Giving

Blackbaud used data from The Blackbaud Index of Online Giving over the past year to examine percentage of total fundraising that came from online giving. We looked at total giving for 2,025 organizations with $4.8 billion in total fundraising and found that, on average, online donations accounted for 7% of overall fundraising. This was an increase from 6.3% in 2011 and is nearing the record level of 7.6% from 2010 when online giving spiked in response to Haitian earthquake relief efforts.

Perspectives from Across the Nonprofit Sector

Todd Cohen, founder of Philanthropy North Carolina, interviewed several leading fundraising professionals in all nine fields of interest where Blackbaud tracks fundraising performance. There are some really great insights from this section of the report. Here are a few quotes that I wanted to share from the report:

“You just can’t rely on those same dollars from those same donors” – John Taylor, Associate Vice Chancellor, North Carolina State University

“As with any good relationship, the frequency and regularity of communication has everything to do with building a good relationship, along with the content of the communication.” - Rick Dunham, President and CEO, Dunham+Company

“You don’t want to tell donors why they should give. You want them to tell you why they should give.” - Kimberly Kubik, Director of Institutional Advancement, Shady Hill School

“Key to effective fundraising, is a strong culture of philanthropy within an organization.” - Bill McGinly, President, the Association for Healthcare Philanthropy

“What fundraisers have to understand is that different donors come to the organization with different interests and priorities, and you have to organize your fundraising strategies around those different types of donors.” – Bob Ottenhoff, President and CEO, Center for Disaster Philanthropy

You can get the entire 2012 Charitable Giving Report online at: www.blackbaud.com/charitablegiving

UnderDeveloped, a recent report from CompassPoint, examines fundraising trends from a different direction, from within nonprofit organizations. How are development staffs set up for success? Who is doing the heavy lifting? What are the expectations?

A few stand-out points from that report are as follows

• Less than half of nonprofit executive directors have previous fund development experience.
• Executive directors at organizations where the development director position was vacant reported a median vacancy length of 6 months, with 46% reporting even longer vacancies.
• Half of development directors anticipate leaving their current jobs in two years or less.

Knowing that fundraising is expect to carry on as-is this year and that across the nonprofit sector, experience and turnover are challenges, nonprofits need to prepare. Your nonprofit likely should consider the following:

• Continuing fundraising education for EDs – Despite his reputation for being an excellent orator, Bill Clinton is famous for rehearsing his speeches ad nauseam. Point being, even if your nonprofit’s leader is a rock star fundraiser, practicing and perfecting skills is never a bad idea. And it’s an even better idea if they are among the large percentage of EDs without previous fund development experience.
• Documentation – A good idea for any and every department at your nonprofit, but especially important in areas notorious for high turnover like fund development. Be sure not only to document interactions with individual donors but standard operating procedures for the daily grind of fundraising.
• Develop mid-level fundraisers – Your mid-level fundraisers will likely have to step up in the event that your development director is in the 50% who leaves in the next two years. Prepare them with solid training and growth opportunities so they are up to the task (and who knows, maybe one will become your next development director!).
• Retain existing donors – With charitable giving not expected to grow, it is even more important to “dance with the one who brung you” so to speak. Ensure that you have solid strategies for retaining your donors and when possible converting one-time donors to sustaining donors. Also, look for opportunities, like volunteering, to help donors develop deeper connections to your nonprofit’s mission so eventual staff turnover has a smaller impact.

What preparatory actions would you add to this list?