Donations up despite decline in donors

Though over half of nonprofits are reporting moderate increases in revenue, donor numbers have been on the decline since the aftermath of Hurricane Katrina, a recent study says.

Target Analysis Group’s Index of National Fundraising Performance released findings for the third quarter of 2007, based on data from 72 of its clients.

Almost two in three of these organizations reported positive revenue growth for the period, with a median revenue increase of 1.4 percent, the report says.

However, donor numbers continued a steady decline, dropping 1.8 percent from the third quarter of 2005 to the third quarter of 2006, and 1.4 percent for the same period from 2006 to 2007.

The report attributes the drop in large part to decreasing rates of acquisition of new donors, with nearly two-thirds of the organizations showing a decline in donor-acquisition rates, for a median decline of 6.2 percent for the quarter from fiscal 2006 to 2007.

Neither donor-retention rates, which remained stagnant, nor donor-reactivation rates, which dropped slightly, have rallied to compensate for the decline in new donors.

The study concludes that an increase in revenue per donor must account for the discrepancy between rising median revenue growth and falling donor numbers and warns this net revenue growth may not be sustainable.

Natural disasters, such as the South Asian tsunami and Hurricane Katrina in 2005, had a significant effect on revenues, the report says.

The last median donor increase occurred in the third quarter 2005, when most donations towards Hurricane Katrina relief were made.

While only the animal-shelters sector showed positive growth in median donors, the report attributes this to a recovery from the post-disaster lows of 2006.

The current U.S. presidential election has caused no discernible difference in revenue growth, the report says.

Target Analysis Group helps nonprofit organizations improve fundraising through data-based consulting. Its 72 clients surveyed in this report account for over 39 million donors and more than 70 million gifts totaling over $1.9 billion in revenue.

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