Taget Analytics | donorCentrics™ Index of Direct Marketing Fundraising 2014 Results
April 07, 2015 - by By Helen Flannery, Paige Grainger, Rob Harris, and Carol Rhine
Q4 2014 Summary
Revenue for the index grew slightly in 2014, increasing a median 1.5% from 2013. 58% of the organizations in the index had revenue increases and 42% had revenue declines over the year. This year, five years after the end of the 2007-2009 recession, overall index revenue has re-attained pre-recessionary levels; however, 2014 revenue still lags 2007 revenue when dollar amounts are adjusted for inflation.
Index donors declined a median 2.7% from 2013 to 2014, continuing a trend that predates the recession. Donor populations have been shrinking for more than eight years; the index has not experienced positive year-to-year donor growth since the Gulf Coast hurricanes in the third quarter of 2005. Only 37% of the organizations in the index had positive donor growth in 2014.
Declines in overall donor numbers have been driven primarily by declines in new donor acquisition. In 2014, new donor acquisition for the index as a whole stabilized, decreasing only 0.6% from 2013. 46% of the organizations had new donor population increases over the period. New donor acquisition did vary quite a bit by sector, however.
In spite of continued overall donor declines, revenue has been able to hold relatively steady because of increases in revenue per donor.
Revenue per donor amounts increased a median 4.0% from 2013 to 2014, on top of a 4.2% increase the year before. These increases were widespread; 84% of the organizations had positive revenue per donor growth in 2014.
Revenue per donor shifts can be largely influenced by the mix of donors across different loyalty segments, since long-term donors typically contribute larger amounts than new donors. The increases in revenue per donor that we are seeing in the index may be driven by changes in organizational strategy, as organizations work to maximize net revenue by focusing efforts on higher value donors, bringing in fewer donors each year but acquiring them at higher gift amounts than previous years.
The overall pattern seen in the index as a whole, of increases in revenue per donor generally compensating for donor declines and resulting in flat or slightly growing revenue, held true for most of the industry sectors in the index in 2014.
Five of the eight sectors in the index experienced year-over-year increases in revenue in 2014. Only three of the eight sectors experienced increases in donors. All eight sectors had some degree of increase in revenue per donor over the year.
In 2014, the animal welfare and environmental sectors were the only two sectors to experience increases in both donors and revenue. Both sectors have now had two consecutive years of increasing revenue.
The arts and culture, health and human services sectors all matched overall index trends in 2014: moderate increases in revenue together with more significant decreases in donors. For all three sectors, widespread increases in revenue per donor helped to compensate for donor declines.
The religion sector remained essentially flat in both revenue and donor growth in 2014, following strong increases in both the previous year. The sector had essentially flat revenue per donor growth as well.
In 2014 the international relief sector had declines in both revenue and donors. However, this sector saw a large spike in giving following Typhoon Haiyan in the Philippines in the fourth quarter of 2013. The declines the sector is now experiencing are more likely a return to normal giving patterns than a real cause for concern; the sector has had quite robust performance over the long term.
The societal benefit sector had the steepest declines in donors of any sector in the index in 2014, and had modest declines in revenue as well. This sector experienced significant revenue and donor increases in the 2012 election year, however, and, as with the relief sector, current performance may be more of a reversion to normal giving patterns than real declines.