2006 State of the Nonprofit Industry Survey Results



2006 State of the Nonprofit Industry Survey Results

CHARLESTON, S.C. — Blackbaud has conducted its State of the Nonprofit Industry Survey annually for the past three years to gather and provide an overview of information that can help nonprofits better benchmark their operations. The 2006 survey focused on a series of timely issues critical to today’s nonprofits; 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 non-profit community and directly to Blackbaud clients via industry newsletters and targeted emails. Seven hundred eighty-five respondents participated. The survey was distributed and administered online, so it is important to note this sampling bias.

Fifty survey respondents were from religious organizations, including ministries, churches, dioceses and other religiously focused nonprofits. Approximately 20% of these religious organizations have total annual revenues of less than $1 million, and almost two-thirds claim total revenues between $1 million and $10 million. This analysis provides a report about the results from religious organizations and comparisons with the more than 700 responses received from non-religious organizations.

Results

General Operations

Religious organizations, like other nonprofits, report increases in budgets, staffing, and demand for services.

  • 69% report that demand for their organizations’ services increased from 2005 to 2006, and 6% reported a decrease (versus 72% reporting an increase and only 4% a decrease in the non-religious sector)
  • 44% expected their staffing level to increase from 2005 to 2006 (the same percentage as reported by the rest of the sector)
  • 57% said their budgets increased from 2005 to 2006 (vs. 66% for the rest of the sector)

In terms of functional areas, religious organizations are more likely to have paid employees who handle major gifts or planned giving than the remainder of the sector. They are less likely than other nonprofits to devote resources to endowments, marketing, and grants writing. A greater percentage of religious respondents reported having employees who work remotely.

  • ?? 90% have employees who handle major gifts (vs. 82% for remainder of sector)
  • 76% have employees who are in charge of planned giving (vs. 70%)
  • 60% have employees who work remotely (vs. 47%)

Religious nonprofits report that a larger portion of income comes from individual donations than other nonprofits report.

They are also likely to have fewer funding sources. Religious organizations are much more likely than other nonprofits to use recurring giving, online donations, and planned giving. They are less likely to focus on special events and product sales.

  • 79% use recurring giving (vs. 47% of non-religious respondents)
  • 80% accept online donations (vs. 59%)
  • 73% use planned giving methods (vs. 55%)

In terms of pressing issues for the non-profit sector as a whole, religious organizations rated accountability to donors much more highly than did non-religious respondents. The need to show impact and measure outcomes rated very highly as well, although not as highly as with the non-religious group.

  • 70% reported that accountability to donors is one of the most pressing issues facing the nonprofit sector (vs. 58% for other respondents)
  • 70% said that the need to show impact and measure outcomes is one of the most pressing issues (vs. 81%)

Use of the Internet

The Internet appears to be very important to religious nonprofits, with 94% saying that it is a critical tool in running their organizations. Even with the emphasis on the Internet, only 12% of religious respondents said their sites are very effective, indicating an opportunity for improvement.

Given the importance of individual donations, online fundraising is crucial for this group. They are much more likely to actively raise funds online than non-religious organizations. Religious groups receive a higher average gift from online (84% $50+) than offline (78% $50+), in contrast to non-religious respondents. Not surprisingly, the largest gifts are still made offline, which corresponds to the remainder of the market. Religious organizations rated middle-aged and high-income donors as more likely to donate online than did the other organizations.

Religious organizations primarily use their websites to educate the public about the mission, market the organization, and communicate with constituents. They are more likely than other nonprofits to use their websites to raise funds and create an online community.

  • 96% say online fundraising is very or somewhat important to their organization (vs. 87% of others)
  • 8% said online auctions are important (vs. 27%)
  • 38% said online polls/surveys are important (vs. 58%)
  • 68% said their web-sites are somewhat effective
  • 66% use their Web sites to raise funds (vs. 58%)
  • 32% use their Web sites to create an online community (vs. 26%)
  • 56% actively raise funds online (vs. 41%)
  • 63% said middle-aged donors are more likely to give online rather than offline (vs. 26%)
  • 37% said high-income donors are more likely to give online rather than offline (vs. 18%)

Accountability and Stewardship

All religious respondents say that donors trust that donations to their organizations will be spent appropriately, but 18% do not think the public trusts nonprofits in general. Although donors trust that donations will be spent appropriately, 38% are asking how donations are spent, which is a higher than the rest of the market at 31%.

More than 40% are seeing an increase in restricted gifts. Because religious organizations are less reliant on other funding sources such as government grants and foundation grants, they may be feeling more impact of restricted gifts. Of those that have noticed an increase in restricted gifts, 63% say they are having trouble getting funds for general operating purposes and 53% are specifically soliciting unrestricted gifts.

Religious organizations are similarly confident as rest of the market about adhering to donor intent, but a little less sure about the strength of their internal controls. They tend to be behind the rest of the sector in implementing audited financial statements, forming audit committees, and establishing whistle-blower procedures.

  • 18% of religious organizations do not think the public trusts nonprofits in general (same as non-religious group)
  • 38% indicate an increased demand from donors asking to be updated on how their contributions were spent (vs. 31%)
  • 43% are seeing an increase in restricted gifts (similar to rest of sector)
  • 64% are very confident in their organization’s internal controls (vs. 79%)
  • 87% have audited financial statements (vs. 95%)
  • 56% have formed an audit committee (vs. 75%)
  • 23% have whistle-blower procedures (47%)

To view the survey results in a downaload, printable PDF, log on to the Blackbaud website.


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