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Nonprofit Income Growth: How do Charities grow fast?

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Charitable Giving in the United States reached record levels in 2016 for the third year in a row (Giving USA). It grew 16% from $335 billion in 2013 to $390 billion in 2016. How many nonprofits caught the national giving wave? Why did some miss it and others exceed it?

Research Method. Over the last two years, we’ve collected over 75,000 fields of detailed organizational data so we can answer questions like these. Our latest study includes data from 164 nonprofits with annual income between $500K and $5 million in 2013. We analyzed income growth by gift size, donor growth, operating efficiency, CEO age, staff turnover, and a wide assortment of nonprofit best practices. Here are the results.


Median Nonprofit Income Growth from 2013-16: 25.2%


  • 59% of nonprofits beat the national, 3-year, 16% charitable giving growth rate
  • 20% blew away the competition by doubling annual income from 2013 to 2016

These income trends reveal the benchmarks by which you should judge charities right now. If a charity has maintained its annual income levels for the past 3 years or even grown by 15%, that charity is falling behind. You can use this table of nonprofit income quintiles to benchmark whether a nonprofit is behind, on par, or ahead of the income growth wave.

 

Growth Category

’13-’16 Income Growth Range

Median % Income Growth

Sample

Exceptional 

100%+

152%

33

Great 

45%-100%

66%

30

Good 

15%-45%

27%

35

Stagnant 

(5%)-15%

3%

34

Shrinking 

<(5%)

(21%)

32

 

 

 

 

 

 

 

 

What separates the winners from the losers?

As you would expect, the biggest factor driving exceptional income growth was donor acquisition. Nonprofits that doubled their income saw drastically more donor growth than any other group. That’s intuitive, but what surprised us is: The fastest growing nonprofits had the lowest donor retention.

 

Access to the Complete Study Results

To see how the full results defy conventional wisdom, subscribe to our Nonprofit Analytics database. You will learn how average gift size affects growth, how growth trends impact operating efficiency, how CEO age and staff turnover affect growth, and which “best practices” the fastest growing nonprofits don’t use. You will see the common pitfalls of fast growing nonprofits so you can avoid wasteful gifts to popular, but poorly managed organizations. At all 3 subscription levels, you will receive the full Nonprofit Income Growth Study today and 5 more Nonprofit Trend Reports we release every year to help our Excellence in Giving clients across the country give wisely.

 


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Tags: Nonprofit Finance, Nonprofit Fundraising, Charity


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