The Latest Learnings from donorCentrics
The donorCentrics Index of Direct Marketing Fundraising Performance is out with a wrap-up of third quarter 2016 performance across nonprofit sectors. I’ll cut to the chase: There were declines across most key metrics through the third quarter, with increases in revenue per donor failing to make up for the declines in revenue, donors, new donor acquisition, retention, and reactivation.
Donor counts are down 14%, which is attributed to cuts in acquisition. All the more reason to focus on donor retention at the acquisition stage—acquiring quality, long-term donors through sophisticated list analysis and targeting, so they’ll be with you for the long haul.
This renewed focus on quality donors might be responsible for the continuing increase in revenue per donor, which has been rising steadily since we pulled out of the 2007-09 recession.
Some more good news: In 1986, tax law changes led to a 15% jump in donations, and President Trump’s plans for tax cuts may similarly affect charitable contribution rates. President Trump has talked about lowering taxes for higher incomes, including doubling allowable deductions without itemizing to $30K. There’s no telling if such a plan will make it through Congress, but if enacted, it could boost charitable giving.
And now, some highlights from the Index, by sector:
Animal Welfare: Most sectors are seeing declines across the board, but Animal Welfare is actually up, with the second-highest increase in new donors and revenue, and improving revenue per donor—overall in good shape. With younger donors are attracted to the issue and mission, leading to increases in monthly donor new joins and DRTV successfully recruits in this sector—so while acquisition is down in most other sectors, it’s up here.
Arts and Culture: Like Animal Welfare, Arts and Culture is doing well, with the highest index in revenue and the biggest increase in new donor acquisition. It’s also the only sector to show an increase in donors in the first three quarters of 2016. This sector is characterized by older and wealthier donors, many of whom didn’t give much during the recession. But they’ve gained from stock market investments since then and are back on the giving bandwagon. Revenue per donor is down slightly, but new donors are up 9.5%—and up 64% since 2011! This is the only sector that has truly recovered from 2007. We’ll see what happens if Trump keeps his promise to abolish the National Endowment for the Arts.
Environmental: This sector experienced a decline in revenue, donors, and gifts, but not as large as the Index as a whole. The Environmental sector has had some strong responses with front-page events like the Standing Rock pipeline stand-off and natural disasters, but it doesn’t seem to be capturing donor attention through Q3 of 2016 on huge issues like global warming. New donors are down 11%. This is another sector to watch as Trump moves to change policies to protect fossil fuels and guts sustainable energy programs.
Health and Human Services: Along with Environmental, the Health and the Human Services sector declined across almost all key metrics. Revenue per donor increased, but overall revenue and number of donors declined. These declines are new for Health and Human Services, but a continued trend in the health sector.
International Relief: This sector experienced significant declines in almost all key metrics through Q3 of 2016. But the Index characterizes these declines as a return to more typical donor giving after significant disaster-related giving in 2015, thus not a real cause for concern.
Societal Benefit: The Societal Benefit sector remained essentially flat in revenue, revenue per donor, and donor numbers, with modest donor increases and slight revenue declines from Q3 YTD 2015 to Q3 YTD 2016.
Visit Blackbaud’s website for more details on the Q3 index.