Important findings from the COPPS study on SYBUNT trends

If you are a fundraiser that uses DonorPerfect or Raiser's Edge as your fundraising software database, you know the power of the SYBUNT report which can help target donors who give "Some Years But Unfortunately Not This" (year).

Most successful fundraisers know that inconsistent donors have a significantly lower lifetime value than donors who give annually. As a result, it is important to segment Annual Fund mailings to ensure too many resources aren't spent on these "occasional donors" at the expense of not soliciting committed donors enough.

It's just as important to understand the broader trends of individual donor giving and the body of research available to help fundraisers understand the big picture.

The NonProfit Times published an excellent review last week of an ongoing study conducted by the Center on Philanthropy Panel Study (COPPS) at Indiana University.

The COPPS survey talks to 8,000 families about their nonprofit giving. According to this report, "while the total percentage of households that gave was similar in all three years (67 to 69 percent), it was not always the same households - in fact, it appears that a third of U.S. households appear to shift between donating and not donating.

COPPS researchers found that 56 percent of households gave donations in each of the three years. Another three in 10 households (29 percent) contributed to charity in some but not all years studied. Just under 15 percent did not contribute at all in any of the years studied.

COPPS is conducted every two years (beginning in 2001) in conjunction with the Panel Study of Income Dynamics (PSID), a landmark recurring survey by the University of Michigan’s Institute for Social Research initiated in 1968.

It's a shame the survey results aren't made public in a more timely manner, but if you would like to read a recent report from January 2008 on the key findings from the survey conducted in 2005 (which covers giving in 2004) you can go here.

A special thanks to the NonProfit Times for publishing this critical link (which all fundraisers should bookmark) to the Center on Philanthropy for quick reference to a dozen major donor research studies.

Target publishes Q1 numbers

The folks up in Boston have published some findings for the first quarter of 2007 for nonprofit clients and there seem to be two points of focus. First:

Q1 2007 was the first quarter in almost two years in which year-over-year growth in the Target Analysis Group Quarterly Index of National Fundraising Performance was essentially unaffected by major disaster giving. All indications are that index revenue has now stabilized at typical pre-disaster levels of growth.

And second:

A longer-term trend that continues to cause concern, however, is a general decline in donor populations over the past five years. Donors declined a median 0.9% from Q1 2006 to Q1 2007.

The declines in donor numbers are mainly due to steep declines in new donor acquisitions. While index donors overall declined 0.9% from Q1 2006 YTD to Q1 2007 YTD, new donors were down 4.1% over that same period. Only 43% of the 70 organizations participating in the index this quarter had increases in new donor acquisition in Q1.

Organizations have generally been able to compensate for these donor declines so far with increases in revenue per donor so that revenue growth has been able to keep up with inflation. In previous quarters we have cautioned that if these trends continue, at some point giving amount increases alone may not sustain overall net revenue growth. With rising inflation a concern for the year ahead, it will be important to watch donor growth rates as more declines could jeopardize real revenue over the long term.

We're not sure we agree with the second point. From our experience, to say that organizations are "compensating" for lower donor numbers by increasing revenue per donor is confusing the cause and affect.

This trend could very well be an intentional move by nonprofits to focus their efforts on only acquiring and retaining more committed donors. All of the smart nonprofits seem to be using less junky premiums just to churn through members and are instead looking for higher value donors (or monthly donors) who contribute a better lifetime value.