Nonprofit Revenues Up, But Slower Than Before the Recession. Now What?

May 24, 2016
By Jack Padovano, Owner & Lead Consultant - IPM Advancement

Last week, I read a recent Chronicle of Philanthropy report citing that revenues at nonprofits rose nearly 2.7 percent in 2014, the fastest rate of growth since the recession. The data comes from an analysis of organizations’ tax filings by the Urban Institute’s National Center for Charitable Statistics, or NCCS.

The Chronicle article states that while the increase is “slow but steady” it still does not come close to matching the pace seen in the years prior to the 2008-9 economic slowdown.

In a nutshell, the report suggests that 2014 was a strong year for many public charities, with nearly half seeing “a slight or large increase in gross receipts” and more than one-third experiencing “more than a 10 percent increase over the previous year.”

This is Good News, Right?

Slowly, but surely, nonprofits are indeed joining a sort of “recession recovery” club. Americans donated an estimated $358 billion to charities in 2014, up approximately seven percent over the previous year and actually “surpassing the inflation-adjusted pre-recession high,” according to a recent Giving USA report.

However, here’s my advice: I encourage overly optimistic organizations to exercise caution as many nonprofits are not quite out of the woods yet. In fact, industry experts indicate that nonprofit giving will not get back to pre-recession levels until at least 2018.

Keeping Up

As a result of this very gradual progression, nonprofits must seriously reevaluate how they ask supporters for money. Of course there are the tried-and-true methods—appealing to new prospects, direct mail, grant seeking and hosting annual fundraising events—but there are also some worthy methods that many nonprofits may not have previously considered.

Why not try to look beyond the typical channels of generating interest, exploring the possibility of adding a new, innovative dimension to your fundraising efforts. Here are some factors to consider before forging ahead with an outside-the-box idea:

1. Find unique pilot programs at other nonprofits that have been successful and truly connect with their stakeholders. Talk to their board members, volunteers and staff members about how they did it, and what lessons were learned.
2. All of your organization’s stakeholders must be involved in any experimentation, including board members.
3. Always get feedback on a new project. Start small and test, and test again.
4. Keep in mind: buy-in for your new innovation or project must come from the top.
5. Remember, the money needs to be there first. So think like an investor — that way, if the program fails, you’re not caught in a problem situation.

IPM Advancement has the experience and full fundraising production capabilities to take every nonprofit donor appeal, membership and advocacy project from concept to completion. We produce all types of nonprofit fundraising appeals, prospecting mailers and donor communications.