Charitable Giving Index: Fundraising Growth Slows

Blackbaud, Inc. (Nasdaq: BLKB) today released a fundraising trends report based on monthly findings from The Blackbaud Index and featuring commentary from Association for Healthcare Philanthropy (AHP) and American Health Assistance Foundation (AHAF) on the newly released specialty index focused on healthcare organizations.

• The report is available for download at www.blackbaud.com/blackbaudindex.

Chuck Longfield, Blackbaud’s chief scientist and creator of The Blackbaud Index noted that although overall fundraising grew by a healthy 6.8% during June through August versus the same period last year, the Index showed growth slowing in July and now August.

"Not surprisingly, it appears that our country’s continuing economic problems are once again weighing on donors’ checkbooks,” said Longfield. "Our data illustrates the challenges most nonprofits are likely facing as they try to achieve sustainable, consistent growth.”

The Blackbaud Index of Charitable Giving and The Blackbaud Index of Online Giving are updated on the 15th of each month (or the next business day) and are based on a three-month moving average of year-over-year percent changes in US-based charitable giving. They represent the most comprehensive and timely sources of charitable giving available. To subscribe to monthly email or text alerts or to read more about the methodology, visit www.blackbaud.com/blackbaudindex.

The Blackbaud Index of Charitable Giving

The Blackbaud Index of Charitable Giving reports that overall charitable revenue grew 6.8% for the three months ending August 2011, as compared to the same period in 2010. This trend is based on $2.3 billion in 12 months’ revenue from 1,276 nonprofit organizations.

Blackbaud also releases additional data and analysis that reports on organizations by size. The Index found that three-month overall charitable revenue for small organizations (prior year revenue of < $1 million) increased 19.3% in August, while overall charitable revenue at medium organizations (prior year revenue of $1 – 10 million) decreased .3%, and overall charitable revenue at large organizations (prior year revenue > $10 million) increased 6.4%.

The Blackbaud Index of Online Giving

The Blackbaud Index of Online Giving reports that online revenue increased by 6.1% for the three months ending August 2011, as compared to the same period in 2010. This trend is based on $426 million in 12 months’ online revenue from 1780 organizations.

The Index found that three-month online revenue for small organizations (prior year revenue of < $1 million) decreased .6% in August, while online revenue at medium organizations (prior year revenue of $1 – 10 million) decreased 3.3%, and online revenue at large organizations (prior year revenue > $10 million) increased 17%.

NEW: The Blackbaud Index – Healthcare

Blackbaud introduced a new specialty index this month, focused on the healthcare sub-sector, which will be updated monthly going forward. These organizations are defined by Giving USA as organizations providing care, such as clinics and hospitals. They also include health-related research facilities, disease specific organizations for research or patient/family support, mental health services and research, and health policy centers. Blackbaud used these organizations’ National Taxonomy of Exempt Entities (NTEE) codes as reported on their 990 tax returns for grouping purposes.

"We wish we had better news to report: fundraising in the healthcare sector shows a decline over the same period in the prior year,” said Longfield. "This overall decline ended a string of six consecutive periods where healthcare fundraising had been expanding.”

The Blackbaud Index of Charitable Giving reports that healthcare organizations had an overall charitable revenue decrease of 5.5% for the three months ending August 2011, as compared to the same period in 2010. This trend is based on $440 million in 12 month revenue from 184 organizations.

The Blackbaud Index of Online Giving reports that healthcare organizations had an online revenue increase of 3.1% for the three months ending August 2011, as compared to the same period in 2010. This trend is based on $205 million in 12 month revenue from 472 organizations.

• For historical charts, visit www.blackbaud.com/blackbaudindex.

AHP’s McGinly said that healthcare development organizations have learned from experience what was working for them and are accepting the fact that ROI is going to go down. One of the key things that he credits successful fundraising shops with is maintaining the level of staff they had and even increasing it to better position themselves for the challenging fundraising environment they are experiencing.

"The size of staff directly correlates with fundraising success,” he said. "The one consistent thing that I’ve seen over the years is the more resources and staff an organization devotes to the fundraising enterprise, the more the organization is able to raise in philanthropic support. You have to have the right people and programs in place to make an impact. It’s a whole system of fundraising activities – from annual giving and special events to major and planned giving – that have to be working in concert.”

As for the future, AHAF’s Stacy Haller sees donor trends that are affecting not only healthcare organizations, but the sector at large. "People are dipping into retirement plans and accessing funds that were intended for charitable purposes,” she said. "This is a change and will not only impact us, but all charities. There is no ‘business as usual,’ all charities will need to adapt to survive. Change can be a good thing as we continue to raise funds to achieve our mission, while realistically adapting to this new world order.”

Visit www.blackbaud.com/blackbaudindex for further data on The Blackbaud Index and additional industry subsets, for monthly updates on the 15^th (or next business day) or to subscribe to email or text alerts, to view a video about benchmarking and metrics, and to download the latest report. Please share your feedback at bbindex@blackbaud.com.

About Blackbaud

Blackbaud is the leading global provider of software and services designed specifically for nonprofit organizations, enabling them to improve operational efficiency, build strong relationships, and raise more money to support their missions. Approximately 24,000 organizations — including The American Red Cross, Cancer Research UK, Earthjustice, International Fund for Animal Welfare, Lincoln Center, The Salvation Army, The Taft School, Tulsa Community Foundation, Ursinus College, the WGBH Educational Foundation, and Yale University — use one or more Blackbaud products and services for fundraising, constituent relationship management, financial management, website management, direct marketing, education administration, ticketing, business intelligence, prospect research, consulting, and analytics. Since 1981, Blackbaud’s sole focus and expertise has been partnering with nonprofits and providing them the solutions they need to make a difference in their local communities and worldwide. Headquartered in the United States, Blackbaud also has operations in Australia, Canada, Hong Kong, the Netherlands, and the United Kingdom. For more information, visit www.blackbaud.com.

Forward-looking Statements

Except for historical information, all of the statements, expectations, and assumptions contained in this news release are forward-looking statements that involve a number of risks and uncertainties. Although Blackbaud attempts to be accurate in making these forward-looking statements, it is possible that future circumstances might differ from the assumptions on which such statements are based. In addition, other important factors that could cause results to differ materially include the following: general economic risks; uncertainty regarding increased business and renewals from existing customers; continued success in sales growth; management of integration of acquired companies and other risks associated with acquisitions; risks associated with successful implementation of multiple integrated software products; the ability to attract and retain key personnel; risks related to our dividend policy and share repurchase program, including potential limitations on our ability to grow and the possibility that we might discontinue payment of dividends; risks relating to restrictions imposed by the credit facility; risks associated with management of growth; lengthy sales and implementation cycles, particularly in larger organization; technological changes that make our products and services less competitive; and the other risk factors set forth from time to time in the SEC filings for Blackbaud, copies of which are available free of charge at the SEC’s website at www.sec.gov or upon request from Blackbaud's investor relations department. All Blackbaud product names appearing herein are trademarks or registered trademarks of Blackbaud, Inc.