Tuesday, December 18, 2007

Do we want to get on this treadmill?

If not, how do we avoid it?
For most of the early 2000s, Senft says, the group was only able to replace most of the donors who walked out the door. “We pretty much broke even,” she says. Late last year, though, the nonprofit had to make a tough decision: spend more money to make money, or risk falling behind. The Wildlife Federation ended up spending some $2 million more on fundraising than the previous year, according to its tax return, sending out 20 million donor letters and nearly as many e-mails.

It worked — but just barely, bringing in 50,000 more members, says Senft, and bumping up donations and membership fees by 6 percent. “We were able to get ahead of the curve because our acquisition was so aggressive,” she adds. “But we didn’t gain ground until this year.”

Call it the donor drain. Raising money for a cause these days has become much like trying to walk up a “down” escalator while it is accelerating. It’s getting tougher just to break even and much easier to fall behind. “The problem is not that [charities are] not getting new money; the problem is that they’re losing an enormous amount of money,” says Bill Levis, the author of a new pilot survey by the Urban Institute that documents the trend.

Levis’ survey shows that most nonprofits post an average gain of just 10 percent each year: they lose 52 percent of their donations, which is then offset by a 62 percent gain in new or upgraded donations. In short, says Levis, nonprofits are losing almost as much as they’re gaining, pouring a river of money into a nearly open drain.

1 comment:

HEWY said...

By non-profit I meant "Not making money off the blog". I do have a full time, part time (mostly for free) and a full-time-make-sure-the-children-do-their-homework-and-brush-their-teeth job