RubinBrown What Not-For-Profit Organizations Should Expect in 2015

In addition to funding shortfalls, almost 50% of organizations are challenged by payment delays, 27% of organizations report spending upwards of 100 hours per month managing government awards which includes burdensome reporting requirements and more than 50% of organizations report an average indirect cost rate of less than 10%. The good news is the UGG raises the minimum indirect cost rate that can be requested to at least 10% for all federal fund recipients. Donor Loyalty Organizations are also experiencing challenges maintaining donor loyalty. According to the “2014 Fundraising Effectiveness Support Report” issued by the Association of Fundraising Professionals and the Center on Nonprofits and Philanthropy at the Urban Institute ( RubinBrown.com/2014-FEP ), over the last nine years, donor and gift/ dollar retention rates have been consistently weak, averaging below 50%. Some positive momentum in the last year has been noted, with median donor retention rates increasing from 39% in 2012 to 43% in 2013 and the median gift/dollar retention rates increasing from 40% in 2012 to 46% in 2013. Although organizations have experienced an overall positive dollar gain with regard to overall fundraising dollars raised, every $100 gain in 2013 was offset by $92 in losses due to gift attribution. In addition, for every 100 donors gained in 2013, 102 donors were lost through attrition. This illustrates the challenge organizations face in responding to a changing donor demographic and achieving donor engagement. Just saying social media is the answer is no longer enough. Organizations need to segment their messages and strategize communications across multiple channels and devices as well as look at messaging targeted at specific generations and demographics. Corporate Giving Corporate support has been a strong component of the fundraising strategy of many not-for-profit organizations. Led by a coalition of CEOs, the Committee Encouraging Corporate Philanthropy (CECP) publishes an annual evaluation of trends in corporate societal engagement. In their “Giving in Numbers 2014 Edition” ( RubinBrown.com/2014-CECP ), there were some positive trends noted. Notably, 64% of corporations increased their total contributions from 2010 to 2013, which is understandable given the overall business growth during that period. A total of $17.55 billion was given by corporations in 2013, up from $17.30 billion contributed in 2012 and $16.30 billion in 2011. Certain segments within the not-for-profit sector are favored by corporations in terms of dollars given including health and social services (27% of corporate dollars), education (higher – 12% and K-12 – 16% of corporate dollars) and community and economic development (14% of corporate dollars). However, when looking at the overall ~15% increase in corporate support over the past four years, it is interesting to note that cash contributions by corporations have only grown about 4% while non- cash contributions (including both pro-bono services and donated goods/products) have grown almost 23%. In addition, corporations are being conservative regarding their expected giving in the upcoming year with 13% expecting a decrease in giving and 48% expecting no change. It is also worth noting that corporate giving has been historically skewed with the occurrence of major national and local events such as Superstorm Sandy in 2012 and the Ferguson unrest in late 2014.

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