Nonprofit revenue growth slows; donors decline

Revenue growth among nonprofits has slowed and donor numbers are on the decline, a new report says.

Revenue grew a median of 1.5 percent last year at the 70 organizations in the Target Analytics index, compared to 2.8 percent the previous year and a historical average of four percent, according to analytic firm’s national fundraising performance index.

The report shows donor numbers declined a median of one percent among nonprofits in the index.

These numbers have declined steadily since the third quarter of 2005, after Katrina relief efforts created a spike in donor totals.

The total decline since 2004 exceeds three percent.

New donor acquisition is also down a median of more than five percent, following a drop of 10 percent the previous year, according to the report.

Only one sector, animal welfare, saw growth in new donor numbers in 2007, and others, including the societal benefit, international relief, and human services sectors, saw particularly large declines.

Modest revenue growth at nonprofits in the index is attributable to increases in revenue per donor, not a growing donor pool, the report says.

Revenue per donor at these organizations increased a median of over four percent in 2007, and three percent the previous year.

According to the report, nearly three-quarters of groups in the index experienced such growth.

Revenue growth at individual organizations generally parallels national economic performance, but lags significantly behind growth in gross domestic product during times of economic hardship because would-be donors place their spending priorities elsewhere.

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