Fundratios is the charity fundraising benchmarking project which we operate in conjunction with the Institute of Fundraising.
Fundratios 2009 - Summary Report
1. Introduction and Overview
Fundratios is designed to help all charities, both large and small, to fundraise more effectively by producing a comprehensive analysis of all aspects of fundraising. This document sets out to summarise the key findings of the study, in order for the results to be incorporated in fundraising activity.
Twenty seven charities with a total income of £2.3 billion participated in the study.
Of this, the proportion derived from voluntary income was 52% little changed from the previous year and statutory income was, as usual, the second largest source (29%).
Given the economic circumstances the charities participating in the study enjoyed a good year's fundraising, with voluntary income rising by 5.6%. Moreover this was despite a 3% fall in legacy income, whilst active fundraising rose by 10.1%, much better than last year's 3.7%. Most major activities except direct marketing enjoyed fair growth; the largest activities, committed giving and local fundraising, grew by more than 10%.
Return on investment was satisfactory at £3.19 per £1 invested in active fundraising almost identical to last year or £3.98 if legacies are included, but the return on committed giving (the largest source of voluntary income after legacies) fell yet again from £2.79 to £2.35.
2. Sources of Voluntary Income
Chart 1 shows a simplified analysis of the main sources of voluntary income. Legacies provided 35% of total voluntary income despite a fall of 3.4% on the previous year’s figures. The remaining 65% is actively fundraised, with an excellent annual growth of 10.1%.
Of the actively fundraised sources, committed giving continues to dominate. It received 18% extra investment and grew by 12.0%.
Local fundraising was the next largest single source providing 9.9% of the total voluntary income, followed by corporate at 6.7%, events and direct marketing at approximately 5% with competitions, trusts and major donor programmes each providing less than 5% of the total.
3. Revenue Growth
Other than legacies which were down by 3.4% only direct marketing suffered a fall in income (down 3.9%). The best growth came from special events and committed giving (up 18.8% and 12.0% respectively). Two large charities reported very big rises in major donor income but for most charities this was a poor year. Local fundraising has enjoyed something of a renaissance in recent years after a period of decline; it grew by 10.2%. After last year's poor growth in active fundraising this year's 10.1% in an economically difficult period is encouraging.
The following chart shows growth by activity over the past year.
4. Fundraising Expenditure
The gain in income this year was not achieved without cost. The charities in the study increased their expenditure by 15.1% in order to achieve 5.6% growth in income. Although this resulted in a lower rate of return it still produced additional net income (i.e. after deduction of fundraising expense).
Most fundraising expenditure (39%) was directed towards committed giving which had 18% more spend than in the previous year. Local fundraising took 18.5% of the budget with direct marketing and special events taking just over 11% each. The latter enjoyed the biggest rise in spend up 28.7% on the previous year.
The next table summarises the changes.
Analysis of Fundraising Expenditure
Share of Budget
% increase (decrease)
Direct marketing appeals
Major donor programmes
5. Return on Investment
Last year we noted the slow but steady decline in return on fundraising investment since the late 1990s. With 15% more spend and only 5.6% more income that trend has continued with the average return this year being £3.98 compared with £4.54 per £1 invested last year.
Paradoxically, one of the major factors responsible has been the very success of committed giving. Over the past decade it has driven up charities' revenue and, legacies apart, it is now the major source of income. However it does require continuing investment and the median return on committed giving this year was £2.35. Local fundraising, the second largest source of income had a return of £2.20. Other than legacies, with a return of £24.36, the best return was from trust fundraising (£8.81) although this is a finite market.
The return on the main fundraising activities is shown below.
6. Highlights by Activity
Corporate donations, sponsorship and payroll giving together provided 6.7% of voluntary income, averaging £1.8m per charity for the group as a whole.
Perhaps despite expectations it was a further successful year for corporate fundraising, with average growth of 12.6% in response to only 1.6% higher expenditure. Income per £1 invested was up at £4.71.
Donations provided 53.6% of corporate income. Median growth of donations was 16.4%. "Corporate Charity of the Year" status remains very valuable. This year the income from this source averaged £80,000 compared with other donations averaging £15,000.
Despite an 18% increase in the number of sponsoring companies there was a 2.0% fall in income from corporate sponsorship although the typical return was a reasonable £3.79 per £ spent.
Income from affinity cards increased to £7.00 per card, but total income fell by 2.6%.
There was satisfactory 8.9% rise in payroll giving. The average gift is £80.00 pa and with low costs (approx. £10.00 per head) net income is very satisfactory.
There was a modest rise in trusts income, averaging 3.3% with three year's average growth of 17.6%.
The return of £8.81 per £1 invested was slightly lower than last year. Average gift size was approximately £6000 and National Lottery funding provided a median 12.2% of trust income (for larger charities the median was 7.5%, for smaller charities it was 27.6%).
Major Donor Programmes
Major donor programmes have had a switchback ride in recent years, with income soaring and falling from year to year. The weighted average growth this year was an exceptional 43.1%. Unfortunately, that was due mostly to the excellent results of two large charities. The median 'growth' was in fact a fall of 20% with over half of the charities which provided detailed data suffering a fall in income. The overall return was £3.44.
Legacies remain the largest single source of income, averaging 35.1% of the voluntary income of the group (37.0% last year).
Income was down 3.4% over one year, but up 18.5% over three years and longer term growth patterns for legacy income show a steady increase ahead of inflation.
Residuary legacies of under £250,000 regularly provide some 70% of all legacy income. Their typical value this year was £34,000.
Pecuniary legacies averaged £3,500.
This year only 29% of all legacies came from known previous donors compared with half last year.
Gaming, Lotteries and Competitions
Lotteries and competitions this year provided 1.3% of voluntary income for the group as a whole, ten of the 27 charities running lotteries. For them, growth was 5.5%. Several charities stopped running lotteries so that overall income was down 3.7%.
Income per £1 invested was £2.13.
Continuing the fluctuation in special event expenditure this year saw a 29% increase after a 29% cutback last year. Income rose by 18.8% and return on investment was £2.04.
Mass participation events provided 37% of events income with a 70% margin followed by activity events (27% of income with a 58% margin), both little changed from last year.
Gala events were more profitable this year, margins averaging 70%. They provided 17.4% of events income.
Direct Marketing Appeals
This year direct marketing income fell after three years of steady growth.
Charities spent 16.4% more but income fell by 3.9%. Return on investment was £1.88 per £1 spent, the lowest rate of return of any major activity.
As noted previously, smaller charities make greater use of direct marketing than the larger ones in the study (7.6% of voluntary income c.f. 3.6%).
As usual warm direct mail provided by far the major share of income (72%), with all direct mail totalling 88% of income. Other media were used for the remaining 12% the same as last year.
Warm direct mail made £4.12 per £1 invested from a 8.0% response rate and cold mailing made a return of £0.50. There was little use made of list exchange this year but other media were used by half of the charities and was profitable (£1.49 per £1 invested).
Committed Giving and Membership
Committed giving is now the largest source of non-legacy revenue. This year it provided 25.5% of voluntary income, or excluding legacies 39% of active fundraising income.
Last year expenditure increased by 31% and this year charities spent a further 18.1%. Income rose by 12.0% so that income per £1 invested was just £2.35 - its lowest level in recent years.
Once again, face to face recruitment provided most new givers (31%) whilst the smaller charities used door to door to a similar extent (28%). Warm direct mail which tends to be cost effective provided 20%.
Not everyone could provide the detailed information on recruitment costs and attrition which we sought so the data on these aspects needs to be viewed with caution. Nonetheless the average recruitment cost of new givers this year has grown yet again to nearly twice the average annual gift. Last year we predicted declining margins on committed giving and that trend is likely to continue.
This year's House to House collections provided only 0.4% of voluntary income. Income was down 11.3% over one year, 17.9% over three years and once again charities cut their expenditure (by 13.7%).
Only four charities had house to house collections but all made a profit and three were very profitable.
Income from local fundraising has grown for the past three years and recorded a further 10.2% rise this year.
It provided 9.9% of income and made a return of £2.20 per £1 invested.
Donations and Gift Aid
Donations received, which could not be directly attributed to other fundraising activities such as membership or shops, amounted to 1.3% of voluntary income, marginally less than last year.
This year, as last, committed giving was 76% gift aided.
Direct marketing was 59% gift aided, (63% last year).
Tax recoveries from all sources provided 4.2% of voluntary income.
There was a fall of 6.0% in income from shop trading this year and the typical return was little changed at £1.24.
Sales per shop averaged £77,000 and the typical profit was unchanged at 11%.
Mail Order Trading
Mail order had another poor year with income down by 13.2%.
This hides the fact that some of the smaller charities did enjoy satisfactory growth.
It continues to make a profit (£1.23 per £1 but c.f. £1.45 last year) and response rates - to the main catalogue - improved slightly to 6.3%.
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