By Todd Cohen
[Note: This column was written for Blackbaud, which asked me to help interpret and to comment on its charitable giving Indexes.]
Ongoing economic gloom continues to dampen charitable giving, underscoring the core importance of building and maintaining strong connections with donors.
Reinforcing the need for better donor development and retention are new data from Blackbaud
that show a decline in charitable giving overall and only a slight increase in online giving in the three months through September, compared to the same period last year.
With uncertainty about the economy and the fall elections undercutting expectations about how much donors will give, experts say, nonprofits need to do a better job understanding what is making donors anxious, and to stand by them, especially during the crucial year-end fundraising season, even if they are giving less or not making gifts.
“Don’t treat them differently because they reduce their gifts because they’ve had to, or because they stop giving for a year or two,” says Karla Williams, principal of The Williams Group, a national consulting firm based in Charlotte, N.C. “Treat them the same. If you treat them differently, they will not return.”
Overall giving at 2,931 organizations that raised a total of $8.3 billion over 12 months fell 3.1 percent for the three months through September, compared to the same period last year, according to The Blackbaud Index of Charitable Giving.
In the same period, online giving at 1,926 charities that raised a total of $378.7 million online grew 2.7 percent, says The Blackbaud Index of Online Giving.
Independent schools outperformed fundraising overall and online.
A new specialty index focused on K-12 independent schools launched by Blackbaud, says overall giving grew 3.1 percent for the three-month period at 321 independent schools that raised a total of $499 million over 12 months. Online giving grew 17.6 percent at 132 independent schools that raised a total of $30 million online.
For the fiscal 2012 school year, annual giving averaged $1,149 per student for the more than 1,400 private, nonprofit schools that are members of the National Association of Independent Schools.
While that average was up from $1,119 in fiscal 2011, it still remained below the $1,573 average in fiscal 2008, before the economy collapsed in the fall of 2008.
The new data from Blackbaud showing independent schools are outperforming nonprofit giving overall and online confirm the upswing for schools and “may be a harbinger of a pretty good year,” says Patrick Bassett, president of the National Association of Independent Schools.
The continuing impact of the recession underscores the need for nonprofits “to cherish the donors we have,” Williams says.
Nonprofits’ top fundraising priority, she says, should be donor retention.
“Retention is all about personalization, relationships, partnerships, and stewardship,” she says. “You may lose their dollars for a year, or get decreased dollars for a year, but they’re still giving, and you have to keep on treating them as a top donor.”
In a recession, nonprofits need to be “a little more sensitive to where our donors are as it relates to either their fears, their job losses, their job changes, their reluctance to give money right now when they’re feeling a little nervous about what’s going on in the greater economic climate, and give them the liberty to make the decision that’s best for them.”
The final three months of the year are a crucial fundraising period for many nonprofits.
And while they typically set fundraising goals based on expectations about how much donors will give, “if those expectations are unrealistic, the fundraisers will be disappointed,” Williams says.
The most effective year-end strategy a nonprofit could pursue would be to give each member of its board of directors 10 names of top donors to call or visit.
“Don’t oversolicit or solicit when you’re anxious,” Williams says, “but solicit properly and personally.”
The key, she says, is to be patient with donors and avoid overreacting from fear that fundraising goals will not be met.
“When we overreact, we really risk putting the relationships in jeopardy,” Williams says.
To see the full report on the Blackbaud Index, click here.