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Nonprofit fundraising growth slows

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Almost two-thirds of nonprofits raised more money in 2007 than in 2006, but the size of those gains and of fundraisers’ optimism have dropped dramatically, a new study says.

In dollars, the fundraising increases are modest, with increases of less than 20 percent reported by 38 percent of respondents to annual State of Fundraising Survey by the Association of Fundraising Professionals.

While 23 percent of respondents said they had seen revenue increases of more than 50 percent in 2006, only 9 percent said they had seen increases at that level in 2007.

Twenty-four percent said they had actually raised less money in 2007, while 11 percent their fundraising was flat, the study says.

Sixty-five percent of charities said they raised more, down from 69 percent in 2006 but roughly the same as in 2004 and 2005.

“2007 seemed to be a typical year for fundraising until the environment changed dramatically at the end of the year with the mortgage crisis,” Paulette V. Maehara, president and CEO of the Association of Fundraising Professionals, says in a statement.

“The impact was very uneven,” she says, “so the million-dollar question is, ‘Do these decreases represent a return to normalcy from the very strong year we saw in 2006, or the beginning of a much bigger slide in fundraising and giving?'”

Larger organizations fared better than smaller groups, with 70 percent reporting a fundraising increase since 2007.

Only half the organizations with annual budgets $500,000 or less saw an increase.

The economy was overwhelmingly cited as the top fundraising challenge for charities in 2007.

Sixty-three percent ranked it as one of the top four challenges, and 30 percent as the top challenge.

Optimism levels are also dropping.

Fifty-eight percent of charities believe they will raise more this year than in 2007, the study says, down from 67 percent last year that expected an increase.

“Charities don’t need to panic but need to retool their strategies and focus more than ever on donor cultivation and stewardship,” Timothy R. Burcham, vice president of advancement for the Kentucky Community and Technical College System, and chair of the Association of Fundaising Professionals, says in a statement.

The Association of Fundraising Professionals, based in Arlington, Va., is a professional association with 29,000 members in 197 chapters worldwide.

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