Does Size Matter? What the Blackbaud Index Reveals.
Posted on Wed, Jun 16, 2010
Yesterday Blackbaud introduced the Index of Charitable Giving - a broad-based index that reports nonprofit revenue trends on a monthly basis displayed through The NonProfit Times.
According to the Index, overall revenue increased by 12.1 percent in April 2010 for the 3 months ending April 2010 as compared to the same period in 2009.
Thanfully the Index is showing non-profits of all sizes are recovering from the recession. However, smaller and larger organizations are recovering faster than medium size organizations.
The side-by-side graphs depicted below break out revenue trends by organization size.
Blue outline: Small organizations (classified by the Index as less than $1 million in revenue)
Red outline: Medium organizations (classified by the Index as $1 million - $10 million in revenue)
Green outline: Large organizations (classified by the Index as $10 million or more in renvenue)
What does all this mean? According to Blackbaud, 'The big takeaway here is that smaller organizations had more significant declines between July 2008 and April 2009, and as such, they are doing better on a relative basis right now. Larger organizations had declines for all of 2009 but are now pulling out of it, led by relief organizations and Haiti-related giving. And mid-size organizations fared fairly well through 2008 and early 2009 but had more significant declines later in 2009.'
The Agitators, Tom Beford and Roger Craver, offer some insight into these trends:
- Small organizations are far less likely to have structural sources of income - monthly giving, endowment income, planned gifts-than larger organizations and therefore their income is more susceptible to the vagaries of the economy.
- As for the faster recovery by small organization we suspect that because "smaller" organizations tend to be ‘local' in nature and therefore delivering on meeting community needs like hunger, housing, and other human services, that donors focus more on them in tough times. Thus, giving to them increases and leads this group out of the recession.
- As a general rule "Large" organizations have a far broader and deeper range of income sources. Monthly giving programs, well developed planned gift and endowment programs, as well as corporate and foundation grants. Because the Index reports virtually all sources of income we would expect this group to be slower heading into the trough and a bit slower than small organizations coming out of it - a bigger boat to lift.
- The ‘puzzler' for us is why ‘mid-sized' organizations show the greatest proportional decline going into the recession and the slowest recovery. If our explanations about the ‘small' and ‘large' group is on target, we'd expect the ‘mid-size' groups to be, well, right in the middle.
- We suspect that the accelerated emergence of "large" groups from the recession is due to the inclusion in the Index of some the big relief groups and Haiti-related giving to them.
How does your organization's performance compare to the Index?
Caity
PS - A big thank you to Chuck Longfield and the entire Blackbaud team who continue to provide invaluable data and analysis to the nonprofit community.