2005 State of the Nonprofit Industry More than 1,000 Nonprofit Professionals Share How Their Organizations Performed in Three Key Areas
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1 Blackbaud survey finds that nprofit budgets and demand for services are increasing, but recruiting and retaining dors remains a challenge State of the Nonprofit Industry More than 1,000 Nonprofit Professionals Share How Their Organizations Performed in Three Key Areas about the survey Blackbaud has conducted its State of the Nonprofit Industry (SONI) Survey annually for the past two years to gather and provide an overview of information that can help nprofits better benchmark their operations. The 2005 survey focused on a series of timely issues critical to today s nprofits; it was structured to capture data in three main areas: 1. General operations (including staffing, budgets, and organizational challenges) 2. Use of the Internet 3. Accountability and stewardship The survey was widely distributed throughout the nprofit community and directly to Blackbaud clients via industry newsletters and targeted s. One thousand twenty-eight respondents participated. (Because the survey was distributed and administered online, it is important to te this sampling bias.) results General Operations Nonprofit professionals have many roles and responsibilities from staffing and fundraising to meeting the demand for services. Many nprofits report that their biggest challenge is recruiting and retaining dors, and the industry s most pressing issues are competition among nprofits, negative publicity, and achieving accountability. 61% report that their organizations budgets increased from 2004 to % said demand for their services increased from 2004 to % expected their staffing levels to increase in 2005; 56% expected staffing levels to remain the same. 87% conduct special events either frequently or periodically. 84% conduct one-on-one solicitations with major dors. 82% pursue matching gifts. 78% employ direct marketing to raise funds. 74% report that their most common method of communicating with dors is by regular mail. Internet Techlogy Strategies Effective Internet solutions have become a necessity for all types of organizations. Respondents reported that the Internet is a fundraising tool that can help them achieve various strategic goals that other tools and methods cant. In fact, many organizations have found that young dors and first-time dors are more likely to give online.
2 90% consider the Internet to be critical to helping them achieve their objectives 96% say that is an important fundraising tool. 90% say that online fundraising is necessary to their success 89% say that electronic newsletters are an important fundraising tool. 41% of organizations that have Web sites report they are effective at meeting their strategic Internet goals. Accountability and Stewardship Nonprofits find that they are facing increased standards of accountability to dors and the general public. To overcome this challenge, many organizations are adopting a more aggressive approach toward financial management. 31% are experiencing an increase in dors requesting information about how their contributions were spent. Almost half are experiencing an increase in dors requesting that their gifts be restricted for a certain purpose. 45% are specifically soliciting unrestricted gifts. 70% have an audit committee. 95% have audited financial statements. 78% proactively communicate with dors on how donations were spent. Comparisons to Last Year s The 2005 State of the Nonprofit Industry Survey results contained several similarities to the 2004 results, and there were also some interesting comparisons in terms of funding sources and boards: 72% are facing an increase in the demand for services this year, and 61% are seeing an increase in budget; 75% saw an increase in demand last year, and 59% saw an increase in budget. Funding sources: 61% saw increases in individual donations this year; 57% did last year. 26% saw increases in bequests this year; 31% did last year. 40% saw increases in corporate donations this year; 34% did last year. 37% saw increases in foundation grants this year; 32% did last year. 67% reported that their board members believe techlogy is a critical success factor; 56% did last year. 65% think their boards are effective in leading and managing their organizations; 52% did last year.
3 How do you expect your organization s staffing level to change in 2005? 8% 36% increase stay the same decrease 56% 1008 total respondents How are the following roles represented in your organization? full-time position part of someone s job part-time position volunteer position outsourced Major Gifts Officer 25% 54% 2% 2% 1% 15% 1010 Prospect Researcher 11% 57% 3% 3% 5% 21% 1004 Planned Giving Officer 14% 52% 3% 2% 2% 27% 1004 Endowment Manager 7% 48% 2% 3% 8% 31% 997 Internet Manager / Webmaster 20% 43% 4% 6% 20% 7% 1011 Data / Systems Analyst 43% 3% 2% 9% 13% 1005 Marketing Coordinator 32% 45% 4% 2% 3% 12% 1011 N/A response total How did your organization s overall budget change for the current fiscal year when compared to last year? 17% 22% 61% increased stayed the same decreased 980 total respondents
4 How did your organization s funding from each source change when compared to last year? increased stayed the same decreased funding from this source response total Individual Donations (t including bequests) 61% 22% 14% 3% 984 United Way 12% 19% 11% 58% 930 Corporate Donations 40% 34% 17% 9% 954 Government Grants 22% 22% 16% 40% 941 Foundation Grants 37% 33% 17% 13% 951 Fees for Program Services 34% 28% 8% 923 Investments 44% 28% 13% 15% 836 Memberships 19% 15% 7% 59% 934 Special Events 48% 23% 12% 18% 963 Bequests 26% 28% 12% 34% 865 Retail Sales 13% 11% 5% 71% 899 For-Profit Business Ventures 5% 4% 2% 89% 882 Over the past year, how has the demand for the services that support your mission changed? 3% 25% increased stayed the same decreased 72% 980 total respondents Which best describes your organization s use of the following fundraising methods? use frequently use periodically don t use yet but plan to use formerly used but stopped have never used response total Direct Marketing 45% 33% 5% 2% 15% 903 Recurring Giving (i.e. automatically deducted from bank accounts at regular intervals) 19% 22% 19% 1% 39% 912 Special Events 44% 43% 3% 2% 7% 930 One-on-one Solicitation of Major Dors 52% 32% 1% 5% 935 Planned Giving 22% 36% 24% 1% 17% 917 Online Donations 23% 32% 24% 1% 20% 937 Product Sales 18% 19% 5% 5% 53% 888 Matching Gifts 28% 55% 5% 1% 11% 924
5 How are the ways your organization communicates with dors changing? increasing change decreasing n/a response total Phone 41% 48% 6% 5% % 15% 0% 6% 911 Face-to-face 35% 2% 3% 907 Mail 35% 52% 11% 2% 909 Web Postings 62% 22% 0% 16% 884 How much do you agree with the following statements regarding your organization s board members? strongly agree Agree neutral disagree strongly disagree response total Our board members are committed to helping provide strategic direction for the organization. 43% 39% 13% 4% 1% 941 Our board members believe techlogy is a critical success factor. 21% 46% 28% 5% 1% 940 Our board members believe in offering competitive pay and benefit packages to recruit and retain staff. 19% 43% 27% 9% 2% 939 Our board is effective in governing the organization. 24% 41% 25% 8% 2% 942 What are your organization s biggest challenges? (totals more than 100% because respondents chose 3) 100% 90% 80% 70% 50% 40% 20% 0% 89% 46% 35% 29% 24% 13% Recruiting New Dors Retaining Current Dors Board Effectiveness Competition with Other Nonprofits Keeping Pace with Techlogy Accountability to Dors Accountability to Regulatory Bodies 938 total respondents Does your organization have the following? working on it response total High Speed Internet Connections (t phone line) 94% 2% 4% 939 A Written Online Strategy 27% 26% 47% 861 Employees Who Work Remotely 44% 8% 48% 928 A Techlogy Budget 68% 22% 902 A Written Techlogy Plan 32% 25% 42% 813
6 Do you consider the Internet to be a critical tool in running your organization? 90% 885 total respondents How effective is your Web site at meeting your organization s strategic Internet goals? 4% 19% 28% Very Effective Somewhat Effective Adequate Somewhat Ineffective Not Effective at All We Don't Have a Web Site 0% 5% 15% 20% 25% 35% 926 total respondents To what extent do you agree with the following statement? It is important to synchronize online information updates with our primary fundraising or constituent relationship management (CRM) database. 50% 40% 20% 0% 49% 29% 19% 872 total respondents 2% 1% Strongly Agree Somewhat Agree Neutral Somewhat Disagree Strongly Disagree
7 Does your organization actively raise funds online? 70% 65% 50% 40% 20% 0% 35% 881 total respondents Do you think that your dors trust that their donations to your organization will be spent appropriately? 2% 98% 903 total respondents Do you feel that the public trusts nprofits in general? 16% 84% 902 total respondents
8 Has your organization seen an increased demand from dors asking to be updated on how their contributions were spent? 31% 69% 903 total respondents Has your organization seen an increased demand from dors asking that their contributions be restricted for a certain purpose? 52% 48% 857 total respondents How is this move toward increased restricted gifts affecting your organization? (totals more than 100% because respondents could choose more than one) 50% 40% 20% 0% 49% 45% 33% 410 total respondents 25% 14% 7% We are having trouble getting funds for general operating purposes We are specifically soliciting unrestricted gifts We are looking to other n-grant revenue sources to fund operating expenses We are seeking additional foundation grants to fund operating expenses No effect on our organization We are seeking additional government grants to fund general operating expenses We have had to limit the number of initiatives for which we accept restricted gifts
9 For each of the following practices, please indicate the action your organization has taken. implemented more than 1 year ago implemented within the past year plan to implement plans to implement response total Audited Financial Statements 89% 5% 3% 2% 862 Formed Audit Committee 58% 12% 20% 770 Established Whistle-Blower Procedures 21% 11% 15% 53% 610 Purchased Directors and Officers (D&O) Insurance 77% 3% 5% 15% 612 Communicated Proactively to Dors on How Donations Were Spent 67% 11% 13% 9% 830 for more information Toll-free: solutions@blackbaud.com Web: Blackbaud, Inc Daniel Island Drive Charleston, SC November 2005
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