A week from today The Giving Institute will release the 2015 Edition of Giving USA, the annual compendium of charitable giving trends and estimates. Remember, the data reported in Giving USA lags by one year. Thus the data in the ‘2014 Edition’ is that for 2013. And the data for the ‘2015 Edition’ will be for 2014.

[You can pre-order your copy here, and you can read The NonProfit Times summary of the 2014 edition here.

The Agitator will cover this year’s report when it’s released next week. But for today I want to focus on a related post by our friend Jay Love, co-founder of the fundraising software firm Bloomerang.

Jay writes that this year’s Giving USA edition is likely to report that total charitable giving will “most likely stay the same as it was the year before: 2% of Gross Domestic Product (GDP)”.

Why is this? Why, year after year, doesn’t the needle on the dashboard move above 2%?

Here’s why, according to Jay in his post 5 Reasons Charitable Giving Will Never Exceed 2%:

1) Hesitancy To Invest In Infrastructure Prevents Major Change

Breakthroughs seldom happen without the advantage of added capacity and resources. Yet in the vast majority of small-to-mid-sized organizations, investments for capacity building and increased resources are rare.

Both internal leaders and boards seem only willing to approve “more or less the same budget as the year before! Once that budget has been handed down from on high, there are precious few staffers who can gain an exception to invest more.”

As Jay correctly notes, “How can we expect a bold jump in fundraising dollars at any nonprofit budgeting for less than a 5% increase.”

2) Blind Adherence To Legacy Fundraising Tactics

Citing The Agitator series titled Barriers to Growth published last May, Jay notes: “The nonprofit world of fundraising seems to shy away from empirical evidence and clings to concepts akin to passing age-old recipes down from one generation to another.”

Noting The Agitator’s admonition that “only by adopting very different mindsets and methods can organizations double or even quadruple their income”, Jay reminds us all of W.L. Bateman’s well-known quote: “If you keep doing what you’ve always done, you’ll keep getting what you’ve always got.” In short, blind faith in the ‘way we have always done it’ will not lead to breakthrough results.

3) A Dearth Of Proper Testing Of Fundraising Methods

Nearly every rapidly growing commercial business utilizes proper testing of just about ever factor influencing revenue generation, from simple A/B testing regarding all types of communications to highly sophisticated testing for potential game changing concepts. [See description of The Agitator’s multivariate testing tools at 18 Month’s Testing in a Day

In the nonprofit world, such testing is generally limited to larger organizations. Even there, old, traditional methods seem to hang on.

“However, when you see large jumps in annual fundraising dollars by certain organizations, it is often times due to either an emergency event or new fundraising methods/tactics being put into place based upon testing.”

“Just think how much more often that would be the case if every organization at least did basic testing!”

4) Lack Of Proper Training

Over the years, proper training of the vast majority of fundraising professionals has been scattershot at best. New folks entering the sector via small and mid-sized nonprofits do their best to cobble together training, ranging from conferences to books to webinars.

The information they receive is often conflicting.

Few seek out and achieve proper credentialing such as their CFRE or ACFRE or college-level courses. Without proper training it’s foolish to expect significant breakthroughs. “Hopefully, more boards and nonprofit leaders will demand and assist in funding such training in the future.”

5) Poor Donor Retention

How can the sector expect significant growth if nearly six out of ten donors do not give again in the next year — the national average for nearly a decade now.

The commercial sector boasts customer retention rates of 95% or even higher and first time customer retention rates of 70% or more. For most nonprofits, the first time donor retention rate often is below 30%.

“I am going to boldly say as long as the average nonprofit organization has an overall donor retention rate below 50%, the 2% of GDP barrier will not budge. Just think what an overall rise in the donor retention rate of merely 10-15% would do for overall dollars raised, if all other factors remained constant. We could see the dollars raised percentage of the GDP growing to 3 or 4% over time!”

Jay, The Agitator couldn’t agree more. And judging from the comments to your piece most folks feel the same. Simone Joyaux put it perfectly:

“Great piece, Jay. I wonder WHEN fundraisers and their organizations will FIX THIS!!??!!

“No quick fixes! Social media isn’t the answer. Neither is the ice bucket challenge. Neither is yelling at your board members if you don’t know what to yell about.

“I could rant on and on and on…. But I’m too tired right now. NO EXCUSES people. No more. Stop it. Fix it.”

So … what are you doing to fix it?

Roger