New Blackbaud Index report – can online fundraising growth carry the industry?

We’ve just laid our eyes on the first Blackbaud Report of 2014, the index measures the overall year-over-year nonprofit fundraising growth for nearly 4,000 US-based organizations and is an important indicator for the nonprofit sector. I most recently wrote about Blackbaud’s 2013 results examined by sector and size.

The January report shows modest overall growth of just 2.4% compared to a year earlier for the rolling three-month period that ended in January, the rather low figure was almost inevitable after a disappointing set of results in December. What can be celebrated is that growth, however small, is still occurring but it was the most nominal increase seen since August of 2012. Encouraging is the fact that after the weak results that summer the following month saw the beginning of a healthy six-month spell of growth between three and six percent.

Is there significance in January results? 

While the result seems to get 2014 off to a somewhat stuttering start I wondered how much significance should be placed on January numbers based on historical evidence and the answer is that January results are not much of an indicator of the year to follow.

• 2013- January showed outstanding growth of 8.2% – the highest mark of the year, a year which concluded with 4.9% growth for the entire year
• 2012- January results showed 2.0% growth which was just slightly below the annual growth for the full year of 2.4%
• 2011- January began the year with healthy 6.0% increases but this proceeded a five month dip and then an outstanding end to year which saw increases of over 5%

In conclusion I don’t feel that what is likely to follow can be bench-marked against the January result but the overall recent pattern of contraction may be more valuable to note. January marked the third consecutive month of lower growth on the index and over the last two years we’ve not seen four consecutive months of falling results, I expect February to mark an improvement.

Online fundraising continues to accelerate

While the overall numbers set a tone of caution it is very interesting to note that the online results seem to march to the beat of a very different drum. In January online giving increased by an eye-catching 15.1% versus a year earlier and that was the best single month since June of last year.

Online fundraising continues to grow unabated by the overall current sluggishness in fundraising growth, monthly results have not dropped below 9% growth since the autumn of 2012. If anything the growth seems to again be accelerating in recent months as more nonprofits retool and improve their online platforms for donations.

Online Fundraising growth from 2011-14 with six month trend-line (date courtesy www.blackbaud.com)

The graph above shows that based on the red trend-line online fundraising growth has yet to peak even if the rate of advance is slowing, I’d conclude that the overall performance in 2014 will be ever more reliant on how well online fundraising continues to be adopted. For individual charities it would be logical to conclude that reaching objectives will be very related to the efficiency of their online model.

One key question this presents is can migration to online fundraising  secure the overall growth by finding and building new audiences of donors or is it simply a question of moving the same net results to new pastures? So far it would appear that the latter is true and that donors are taking advantage of the new technology offered, however I feel that the different demographic that online fundraising and social media reaches could very well prove capable of securing overall net growth.

I can easily envision a 2014 where the net fundraising growth will come from online expansion while traditional fundraising year-over-year results hover very near to the funding from a year earlier. Can you see the same?
_________________________________________________________________________________

For nonprofit, nonprofit fundraising, CSR business and other news, connect with us on Twitter, Facebook, Linkedin, Google+ and Pinterest or subscribe to our RSS feed.

Miratel Solutions is a Toronto call centre, eBusiness, and letter shop mail house specializing in professional fundraising services including telephone fundraising, online fundraising, lottery services, donation caging, donation processing and other donor management services. We are committed to our CSR business values in all contact centre services