Retaining Staff and Donors Key for Aussie NFPs

Australian and New Zealand Not for Profits have rated retaining donors and retaining staff as their highest priority in terms of organisational performance in a global State of the Industry survey.

The survey was conducted in partnership with L’Association Française des Fundraisers, the Fundraising Institute of New Zealand (FINZ), the German Fundraising Association, Philanthropy Centro Studi, and the Resource Alliance.

A majority of survey respondents from NFP organisations in Australia and New Zealand expect their organisation’s total income, income from charitable giving, and expenses to increase in 2010 and 2011. Most expect demand for the organisation’s services to increase, but 30 percent say their staffing levels will remain static in 2010 in spite of the increased demand. while sixty percent expect their staffing levels to increase in 2011.

The survey found that individual and corporate donations were cited by the largest percentage of survey participants as sources of increased funding in 2010. When asked to rate the importance of various business practices related to management and fundraising, Australian and NZ participants chose maintaining relationships with supporters and retaining current donors as most important. 

Retaining donors and retaining staff were ranked highest in terms of organisational performance. The largest gap between importance and performance is in the area of recruiting new donors. Nearly 70 percent expect to increase organisational investment in donor recruitment in the coming year.

In Australia, the top drivers of donations are direct mail, special events, one-on-one solicitation of major donors, and planned gifts/bequests, all of which are predicted by most respondents to produce increased revenue in 2010. Direct mail and special events are the most frequently cited ways of reaching out to new potential donors, followed by online donations.

Many survey participants use online tools in their communication and fundraising efforts. Websites are most frequently used to market the organisation and educate the public about the organisation’s mission. The second most frequently cited use of the organisational website is for communicating with supporters. Mail and email are the most frequently used methods of communicating with constituents. The top driver of online donations is email to current donors, followed by direct mail promotion of online giving.

Organisations also use online tools for online payments and electronic newsletters. About half use social networking tools (Facebook, Twitter, etc.), and a third plan to use social networking tools in the future, but social networking is not a top driver of online donations.

Findings from the 2010 survey suggest that technology is becoming increasingly important to Not for Profit organisations in implementing their marketing and fundraising activities effectively. More than half of survey respondents have a technology budget, a branding/marketing strategy, employees who work remotely, and a data services budget. When asked to rate the importance of various technology systems, respondents indicated that having a unified database that contains all information on donors and other supporters is the most important technology system, followed by consolidated reporting of operational results.

About half of respondent organisations receive requests from donors for reports on how donations are spent, and 61 percent receive requests to have contributions restricted for a particular purpose. For the organisations that report increasing requests for gift restrictions, more than 40 percent are having trouble obtaining funds for general operating support. Strategies for counteracting negative effects of increased gift restrictions include specifically soliciting unrestricted gifts and seeking additional grants and non-grant revenue.

Respondent organisations have clearly been focusing on practices to ensure accountability and good stewardship. Nearly all survey participants report their organisations have audited financial statements, and most report they communicate proactively on the impact of programs and how donations were spent. A majority also have policies and practices to protect donor privacy and an audit committee.

Four global trends that emerged from the data include:

1. New fundraising and communication channels, although growing, are not replacing traditional channels. Most organizations continue to leverage traditional channels, even while they are increasingly using new interactive channels. This use of new channels is placing a tremendous strain on organizations because revenue has not risen significantly in aggregate and yet costs for each communication channel have risen. This situation creates a demand for more integrated communication tools and database platforms.
    
2. ROI and organizational effectiveness are under scrutiny and more important than ever, Baby boomers, which have entered their prime giving years in the United States, are not as trusting of government and institutions to solve problems and want to see greater evidence. However, this trend is clearly not just a United States phenomenon. Donors worldwide want to see evidence that their money is being spent well and that NFPs are being run as efficiently as possible.
    
3. There is a new focus on the total supporter journey vs. traditional “donor management.” In light of an increased focus on donor retention coupled with increasing costs for acquisition, constituent relationship management (CRM) is transitioning from transactional fundraising to a relationship-focused supporter journey. To have a constituent-centric focus, NFPs need to consolidate data on supporters and eliminate silos so everyone in the organization has the same view of the many ways supporters interact with their organization. Technology is essential for helping them track the supporter journey, from service recipient to volunteer to event participant to donor.
    
4. Fundraising is emerging as a widely-recognized profession around the globe. The vast majority of NFPs around the world are expecting to increase their investment in fundraising staff, according to the SONI survey. It is clear that fundraising is no longer someone’s “part-time” responsibility. Techniques and data are becoming more complex, and the rate of change is increasing. What was once mostly art is rapidly becoming science, requiring new tools and techniques, partnerships, and better skilled staff.