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VOL. 127 | NO. 15 | Tuesday, January 24, 2012

Donations Up Nationwide, Local Nonprofits Still Struggle

By Aisling Maki

Print | Front Page | Email this story | Email reporter

Fundraising for nonprofits has returned to pre-recession levels, now exceeding the level of giving last seen in 2007, according to Blackbaud Inc., a Charleston, S.C.-based provider of software and services for nonprofits across the country.

The company said overall giving was up 3.4 percent through the first 11 months of 2011, the most recent month for which data were available, compared to the same period in 2010.

Blackbaud’s Index of Charitable Giving also reported that overall charitable revenue grew 1.4 percent for the three-month period that ended in November when compared to the same period in 2010.

The Index of Charitable Giving, issued every month, is a year-over-year comparison of a three-month rolling average of donations. This helps smooth out major changes that occur because of large fundraising drives. In this case, the index is based on the giving trends of 1,281 nonprofit organizations representing about $2.5 billion in yearly giving – both offline and online.

Most nonprofits included in the study saw increased stability and predictability in their 2011 fundraising than they had in the past several years, according to the report.

Struggles continue for the smallest organizations measured by the index.

Blackbaud found three-month charitable revenue for organizations whose revenue totaled less than $1 million in the previous year decreased 2.5 percent in the three-month period ended November.

“If you have organizations that are still struggling — and we do around here because I run into them daily — where things have not significantly improved since the recession, a study like (Blackbaud’s) can be a little discouraging.”

–Nancy McGee
Executive director, Alliance for Nonprofit Excellence

The decrease didn’t hold true for organizations that rose above the $1 million revenue mark; medium-sized nonprofits (those with a previous year revenue of $1 million to $10 million) saw an 8.2 percent increase, while large nonprofits (those with revenue greater than $10 million) held at roughly the same level – less than a 1 percent decline.

Nancy McGee, executive director of the Memphis-based Alliance for Nonprofit Excellence, said medium to large organizations typically have “more sophisticated fundraising mechanisms.”

Online donations saw good news on all fronts.

A separate measurement, the Blackbaud Index of Online Giving, reported that online revenue increased 12 percent for the three-month period ended November compared to the same period in 2010. The most recent index is based on year-over-year giving trends of 1,769 organizations representing about $383 million in online revenue.

More specifically, three-month online revenue for small organizations increased 15.4 percent for the period ended November. For medium organizations, online revenue increased 12.1 percent; for large organizations, it increased 10.8 percent.

But McGee said Mid-South nonprofits continue to struggle.

“If you have organizations that are still struggling – and we do around here because I run into them daily – where things have not significantly improved since the recession, a study like (Blackbaud’s) can be a little discouraging,” she said.

The Alliance for Nonprofit Excellence, which serves nonprofits in more than 30 counties in Eastern Arkansas, Northern Mississippi and Western Tennessee, late last year released its own report on the state of Mid-South nonprofits.

“Downstream & In Demand III: Another Look at Mid-South Nonprofits and the Economic Crisis” found that regional nonprofits continued to struggle with an increased demand for services coupled with less funding and a higher cost of doing business.

“It’s not significantly better here by any means,” McGee said. “For the most part, most organizations are continuing to find that it’s a very tough environment to try to raise money in right now.”

Sixty percent of “Downstream” respondents reported they had lost a major funding source in 2011, while 50 percent said funding from a longtime source had been reduced, with the largest funding cuts coming from United Way and federal government programs.

The good news regionally was that, despite many respondents reporting a decline in corporate donors and sponsors, 2011 corporate giving increased overall. Respondents also reported a slight increase in individual donations.

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