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AFP's 2005 State of Fundraising Survey Results
By Andy Levy-Ajzenkopf
July 24, 2006
On July 10, 2006, the Association of Fundraising Professionals (AFP) published the results of their yearly State of Fundraising Survey. Now in its fifth year, this AFP-sponsored study uses e-mail to solicit its member organizations in the U.S. and Canada to look back on their fundraising goals for the preceding year and determine whether they performed better or worse than before. We'll leave the U.S. results aside (they had a poorer showing than Canada anyway). The good news is the 2005 report heaps praise upon Canadian fundraisers. The bad news is that the future may not be so rosy for Canadian charities seeking funds in the future.
Positive percentages
Despite concerns that donor fatigue in the last two years (particularly after natural disasters like Hurricane Katrina and the Southeast Asia tsunami) could have affected fundraising in 2005, Canadian charities performed well. Approximately 64% of Canadian respondents showed more success in their fundraising endeavours in 2005 than in 2004. It's the statistic that gets some of the most play in the survey; highlighting how well Canadian charities are fundraising. A major factor contributing to this success was the effectiveness of direct mail campaigns. Almost 78% of charities cited this as a major technique to secure funds, and nearly 58% of respondents said they raised more money via direct mail in 2005; up from 46% in 2004.
Michael Nilsen, director of public affairs with AFP in Washington D.C. lauds this result. "The direct mail [fundraising category] jumped about 12 points," he says. "That's probably why so many [Canadian] organizations were able to meet their goals. That's real strong growth." While Nilsen believes this is to be commended, he is concerned about the lack of growth and drop-off in other, potentially more important methods of fundraising in Canada.
Negative curve
"If you look at [fundraising] categories like special events, online fundraising and telefundraising, there's a fair amount of drop-off in Canadian success depending on technique," says Nilsen. He does caution that these are all fairly new methods of fundraising and many charities are still adapting to new technologies to get their messages out. However, the 2005 numbers for these categories are low. For example, only 28% of Canadian respondents even use teleservices to fundraise. Meanwhile, success rates from special event and online fundraising are down from 2004, by 4.7% and 10% respectively. AFP is keeping a close eye on these categories.
"What disturbs me is that [drop-offs] are often a harbinger of things to come. When those categories go down what you're seeing are the smaller gifts and donors declining," he says. "Those categories indicate [success] in ability to reach out to new people and re-upping their general gifts. If those things go down, that, to me, is a bad sign." It's a situation that AFP will monitor keenly.
Who or what is to blame?
Nilsen believes much of the decline in these categories can be directly attributed to the economy. According to the survey, Canada showed steady growth in fundraising across categories over the last three years. But things may be slowing down and public purse strings may be tightening. "Perhaps people don't feel like they have the extra money to give to a special event as opposed to paying for groceries or buying a gift for their child," ponders Nilsen. "You have to wonder what this will mean for 2006."
Canadian members have their own theory of why there may have been less success in certain areas of fundraising than hoped for in 2005: competition. The survey showed that approximately 50% of respondents cited "increased competition for the charitable dollar" as one of the top three challenges in their organization. Nilsen acknowledges that there has been a marked increase in the number of charitable organizations in both the U.S. and Canada, but insists it isn't the stumbling block many make it out to be. In fact, for him it is a positive development.
"I tend to cringe when organizations say the sky is falling because of competition," he says, pointing to the 64% success rate cited by AFP's Canadian members as proof. "It seems to me the more charities you have the more people are interested in the future strength and fabric of their society. I think [competition] will always be an issue." This is why Nilsen believes an organization's success for the future will rely much more on marketing, branding and creating unique niches for individual organizations to offset competition.
Survey problems
A major concern in the survey was the low response rate by AFP members. One of the earliest numbers given in the report is 9.3%. This is the overall percentage of members who actually sent in answers. It begs the question of whether the survey accurately reflects real fundraising successes/failures in the charitable sector. Of the nearly 2,500 Canadian AFP members who were asked to respond, only 209 filled in the questionnaire (in the U.S. only 303 of 3,000 members responded). The relatively tiny number was off-putting to AFP executives, but Nilsen and his colleagues stand by their results.
"The response rate was not too hot [but] given the numbers involved we feel pretty comfortable with it," he states. "AFP talked to a number of statisticians. They tell us that the report is [between] 92% and 95% accurate. There may be some discrepancies here and there, but I feel comfortable with the answers we've got." That said, Nilsen mentions that AFP is looking at ways to make these results even more reliable. One of the plans on the table is to track the same organizations who responded this time around to get "more precise numbers".
Optimism for 2006
Despite the percentage dips, obstacles, statistical anomalies and economic uncertainty, the survey concludes on an optimistic note for Canada. It claims that Canadian fundraisers are "more buoyant" about 2006 than their neighbours south of the border. Almost three-quarterss (71%) of Canadian charities expect to amass more funds this year, while only 10% think they will garner less. Only time, and the 2006 State of Fundraising Survey, will tell.
Andy Levy-Ajzenkopf is president of WordLaunch professional writing services in Toronto. He can be reached at andy@wordlaunch.com