By Holly Hall

Donations to 75 of the nation’s largest charities have fallen in the past year, adding to problems caused by a multi-year decline in the number of donors who give in response to direct-mail solicitations, online appeals, and telemarketing, according to a study released today.

In the past charities could offset the decline in the number of donors because they were succeeding in persuading individuals to give larger sums.

But that trend ended last year: Total contributions fell by a median of 3.3 percent in 2008, after increasing by approximately the same amount in 2007, for organizations in the survey, which was conducted by Target Analytics, the research division of the software company Blackbaud.

“Donor numbers have been falling in the index for at least the past three years since Hurricane Katrina, but 2008 was the first year since then that revenue declined as well,” said Rob Harris, Target’s vice president of analytic products. “The largest revenue declines were in the fourth quarter of 2008, when economic conditions were at their worst.”

Target’s most recent survey, which is conducted quarterly, provided data for calendar year 2008 and the preceding four years. For the 12 months ending in December, the survey tallied contributions to the 75 charities from 36 million donors who gave more than $2-billion in individual gifts under $5,000 and compared the results with those in preceding years.

By every fund-raising measure, charities in the survey did worse last year than in 2007. The number of new donors they were able to recruit, for example, fell by a median 6.9 percent, on top of a 4.4percent decline in 2007.

Target officials attributed the decline in new donors as a key reason behind a slump in the number of donors reported by organizations in the survey. Over the past five years, since 2003, the ability of charities in the survey to recruit new donors has declined by a median 16.7 percent, while the total number of donors reported by the organizations dropped by a median 5.2 percent.

Total contributions have also fallen. In the five year period since 2003, which included record contributions in response to the Asian tsunamis and Hurricane Katrina, gifts grew by a median of 17.5 percent. But in the most recent three years, 2005 to 2008, revenue declined by a median 1.5 percent and that decline accelerated from 2007 to 2008, when donations fell by 3.3 percent.

Not every type of charity in the survey had fund-raising declines last year. Animal welfare and international relief groups reported median increases in contributions, 5.1 percent and 1.1 percent, respectively, and the number of donors to those causes also grew by a median of 3.1 and 1.8 percent, respectively.

Among organizations facing the toughest fund-raising challenges were health organizations, which saw their contributions fall by a median 7.2 percent and the number of donors drop by 6.4 precent last year, on top of smaller percentage decreases in 2007.

The survey also examined the growth of online giving relative to other solicitation methods among 59 of the 75 charities in the survey. Last year, a median of 7 percent of contributions came from the Internet, 4 percent from telemarketing, and 77 percent from direct mail. In the past five years, Internet gifts have grown from a median of 3 percent to 7 percent of total contributions to charities in the survey.

The number of donors recruited online has also grown from a median 4 percent in 2004 to 9 percent last year. And as has been found in other surveys, online gifts, at a median of $70 last year, were higher than those made in response to direct-mail appeals ($41) or telemarketing ($46).

— Holly Hall