Donations Aren’t Keeping Pace with NPO Growth

Historic coinsIn its December 6, 2012 issue, the Chronicle of Philanthropy reported that, “the nonprofit world continues to grow both in number of organizations and in its share of the U. S. work force” but “fundraising isn’t keeping pace”–and the gap is especially wide for those working in arts, culture, and humanities (that includes historic sites and house museums).  If you felt that you’ve been spinning your wheels in the last few years, you can now confirm it with some national statistics.

In the last decade (2000-2010), the number of charities that focused on arts, culture, and humanities grew at 45% but the rise in revenue was only 26%–the bottom of the eight fields studied.  Compare that to health-related charities, whose number grew at 22.4% but their revenues rose by 96.6%.  At the top of the revenue growth for the decade were charities that focused on international and foreign affairs (a whopping 141.2%!) and nonprofits that focused on the environment and animals found they had the most competition with the number of organizations growing at 82.5%.

Overall, there are just over one million non-profit organizations registered with the IRS in 2012, of which 10% are foundations.  Non-profits represent 11% of the U.S. workforce (that’s 13.7 million people, a 18% growth from 2000) and account for 6% of the U.S. gross domestic product, however, both cash donations and in-kind gifts have fallen by 12% and 33% respectively over the last decade (yikes!).

If there’s a bright spot, online donations continue to grow.  In the last year it increased by about 10%, not just in overall value (in the third quarter of 2012, $181 million was donated online) but also in the size of the average gift (from $98 to $107).  Surprisingly, most people give online during the week and during the hours of 10 am to 4 pm–not weekends or evenings–and provide work email addresses (not free e-mail services like AOL, Gmail, Hotmail, or Yahoo) give more generously, so prioritize your online appeals accordingly.  If you are not accepting donations online, you are “leaving money on the table” and need to quickly adopt PayPal,  Google Checkout, or another payment service.  Each year you fail to do this, you’ll fall farther behind.  And remember, the last five days of December are the most generous of the year, so be sure you remind your supporters that you welcome year-end gifts, that you’ve made it easy and convenient to donate, and that you thank them within one week.

One thought on “Donations Aren’t Keeping Pace with NPO Growth

  1. Gretchen Jennings

    Hi, Max, an interesting post, and I think it is confirmed in the discussion in the latest Exhibitionist museum journal on Museums and the Economy. If you don’t mind posting a plug, I wanted to let your readers know about this latest issue, “Navigating a Changing Economy: The New Normal for Museums?” Also as you know your updated look at embezzlement and non profits is in the same issue. Those interested can subscribe directly to get Exhibitionst and don’t any longer have to be a member of NAME or AAM. Just go to AAM website. Thanks, Gretchen

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