Nonprofits have a long way to go before recovering from recession

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Nonprofits continue to lose more donors than they gain and have a long way to go to recover from the recession, says a new report from the Association of Fundraising Professionals and the Urban Institute.

The “net gain in giving” for charities in 2011 was zero, according to a survey by the groups. That is, for every $100 a nonprofit gained from new donors, ramped-up diving by current donors and the return of former donors, it lost $100 through smaller gifts from current donors and the departure of those who gave in 2010.

The return to a flat level of giving is actually an improvement, however. In 2010, charities lost money – for every $100 given, they lost $105.

The last time the net gain in giving was positive was 2007, when charities gained $14.

Despite improvement in gifts versus losses, nonprofits continue to churn through donors, losing them because of economic turbulence, external causes or the lack of an effective relationship with their donors. For every 100 new donors, 107 departed, said the report.

“The widespread turnover in donors needs to be understood and addressed,” said Elizabeth Boris, the director of the Urban Institute’s Center on Nonprofits and Philanthropy. “Nonprofits have to be more strategic in how they use their fundraising resources by focusing, for instance, on retaining new and existing donors.”

On average, 75 percent of a nonprofit’s 2010 first-time donors did not make a second gift in 2011.

At the same time, 60 percent of all donors to a particular charity in 2010 did not contribute again in 2011. This donor attrition rate was also 60 percent in 2010 and 59 percent in 2009. Donor attrition was somewhat better in 2007 at 55 percent.

In Colorado Springs, some charities are feeling the pinch of fewer donors, while others are seeing an increase in donations because of the Waldo Canyon fire outreach efforts. To read about the plight of Colorado Springs charities, click here.