Donor Fatigue Hits Charity Fundraising
23 April 2007 at 1:22 pm
Analysis of the 2006 financial data of around 270 charities listed by Givewell shows that while the Not for Profit sector is in good shape financially, donor fatigue may have set in.
The report shows that while Total Income of the sample increased in line with the inflation rate of 3%, Gross Fundraising Revenue actually declined by 5%.
Contributions from all levels of government increased by 6%, which is consistent with prior Givewell analysis that indicates a sustained increase in government funding over the last 9 years.
Charity balance sheets are also healthier. The survey shows that there has been a decline in the dollar amount of Surplus (-24%) held by charities but their Net Assets and Investments have increased in value by 6% and 11% respectively.
However, when comparing the latest 2006 figures with 2004 figures, the story is healthier.
Due to the Asian Tsunami which occurred on 26 December 2004, the ‘tsunami factor’ resulted in significant increases in fundraising revenue in response to the tsunami appeals, and these large fundraising figures reported in 2005 have implications for the 2006 growth figures.
For example, despite the decline in fundraising income of 5% from 2005 to 2006, fundraising income across the sector has actually increased by 27% over the two year period from 2004 to 2006.
Similarly, the increase in total income for the period from 2004-2006 shows a healthy growth of 15% compared with the smaller growth of 2% for 2005-2006.
Overall, the survey concludes that the charities sector continues to grow at a higher rate than the economy, wages or inflation. However, if donor fatigue continues to develop fundraising growth could come under pressure.
However organisers of the Royal Children’s Hospital Good Friday Appeal in Victoria over Easter showed no signs of donor fatigue.
Through year long fundraising that culminates with a tele-thon and radio-thon across the state on Good Friday, the Appeal raised $11.8 million – $1.5 million more than 2006.
Appeal Director, Christine Unsworth says this comes at a time when the state is in the grip of a drought and farmers and communities are still recovering from devastating bushfires in the first few months of 2007. Country Victoria alone raised $2.35 million.