We have now completed two cycles of our Fundraising Vital Signs surveys, in which we ask readers of The Agitator to share their prognostications regarding the fundraising outlook for the balance of 2008 (see Survey 1 results here).

Our overall response profile remains the same: three-of-four respondents work in a nonprofit organization; the other respondents work for a fundraising agency or as independent fundraising consultants. Respondents are nicely representative of the full range of nonprofits, from advocacy groups, social/human services and arts & culture, to medical/health, education and humanitarian assistance. Thanks to respondents one and all.

Here is an overview of the latest responses. Keep in mind these responses are directional only.

Key findings

In every respect, the latest responses are gloomier in outlook than our first report.

• 62% of responding nonprofits (vs 32% in Survey 1) expect their last quarter 2008 returns to be down by 10% or more, compared to actual returns for the same period in 2007;
• 19% of nonprofits (vs 27% in Survey 1) expect their last quarter 2008 returns to be down by less than 10%;
• Thus, 81% now expect a poorer year-end than in 2007, whereas 58% so indicated a few weeks ago.
• This dour expectation has spread through all sectors … we detect no meaningful distinctions, whereas in Survey 1 animal welfare and faith-based groups were showing a bit more optimism.

For the entire year, 71% of nonprofits now see their overall returns being down from 2007, versus 48% expecting a downturn in Survey 1.

As for member/donor growth, 27% of responding nonprofits project that they will have fewer donors/members at the end of 2008 than they had at year-end 2007; 49% say about the same; and 25% say they will have more. Advisers are just a bit more cautious. These figures are unchanged from Survey 1.

Agencies/consultants continue to be more pessimistic than their nonprofit clients. Most striking is the fall-off they see in renewal programs and prospecting — 75% of advisers see a downturn in renewals (vs 47% on client side), and 88% see a downturn in prospecting (vs 74% on client side).

For all respondents, the most stable fundraising program continues to be monthly giving — 73% of nonprofits expect these programs to perform on par with or better than last year, whereas 53% would say this about their renewals (their 2nd best performing program).

Finally, we asked repeat respondents participating on our Vital Signs Panel whether they had become more optimistic or more pessimistic in the last few weeks — 38% said more pessimistic; 25% said more optimistic (I’d like to meet them!); 38% said about the same.

Here are some of their comments:

• I’m feeling about the same for the balance of 2008 but I am more pessimistic about 2009. I think we’re in for a long slow and probably bumpy climb out of this hole.
• Slightly more optimistic… renewal returns appear to be holding up.
• I am more concerned than I was two weeks ago. I think retail spending is more indicative of philanthropic activity than most other indicators. While market fluctuations can’t really prove anything about a donor’s personal outlook on their economic prospects, I believe that consumer spending does. From my perspective, the recent downturn in consumer spending translates to reduced giving.
• Slightly more optimistic – response rates seem to be recovering somewhat, though average gifts continue to be lower.

What to do?

Everyone has gotten the message about NOT backing away from asking current donors and members for contributions! Whereas 50% of nonprofits reported they were "soliciting our house file more aggressively" in Survey 1, by round two fully 70% are doing so. Both advisers (81%) and clients (76%) consistently report that they have adjusted messaging to reflect the economic environment. And more advisers (20%) and clients (24%) indicate that they are cutting back on prospecting.

To close, here is a flavoring of the verbatim comments offered by respondents:

• An unexpected windfall kept our donations on track to meet budgetary needs but concerns are for 2009.
• Most donors are telling us that they will give, but to wait until December.
• Adding friendraising and fundraising events.
• Following up with prior donors who have not given yet.
• One cultural organization sent an appeal on September 12 that seven weeks later on Nov, 4 had a response rate of 6.93% and a $53 average gift. They have had 5 returns since. The mailing just died. Based on their previous history and the first seven weeks, I would have expected at least an 8.5% response rate.
• Worsening conditions.

We plan to do another Vital Signs update or two in December. We hope you will participate.

Tom

P.S. These results and recommended action steps will be discussed TODAY Friday, November 21^st in a special Editors TeleBriefing at 2-3pm EST. Free registration here for the TeleBriefing.