ontents About the Survey... 1

about the survey s Not-for-Profit organisations are often on the front lines in providing societal benefits -- social services, healthcare, arts and culture, and many more. Not-for-profits may be criticized, however, for not investing enough in building their capacity to effectively perform and sustain the services they provide. Not-for-profit leaders are frequently required to manage upstream, against countless obstacles inadequate budgets, staff shortages, volunteers and staff with good intentions but little management experience, outdated equipment and software. There is increasing interest in the not-for-profit sector in improving governance, planning, and fundraising, and investing in training and equipment to enhance organisational performance. Authors, educators and researchers have explored ways to draw on management techniques used by successful for-profits to help not-for-profit organisations become more effective and more accountable to their constituents and the general public. Blackbaud has conducted its Asia Pacific State of the Not-for-Profit Industry Survey annually for the past five years. The study asks not-for-profit leaders to report on some of the management strategies they re using, and the degree to which they anticipate changes in their organisations this year and next. Included in the study are questions about: General operations (including staffing, budgets, and organisational challenges) Fundraising Technology and Internet usage Accountability and stewardship The survey report provides an overview of information that can help not-for-profits assess their operations and compare their performance with that of other not-for-profit organisations. methodology Invitations to participate in this online survey were widely distributed throughout the not-for-profit community in Australia and New Zealand and directly to Blackbaud customers in these areas via industry newsletters and targeted emails. Responses were accepted for approximately one month in June and July 2010. One hundred seventy-six individuals participated in the survey. Because this was a convenience sample rather than a random sample of the entire not-for-profit community, results may not be statistically representative of all not-for-profits in these countries. However because of the large number of responses, the results provide a useful basis for analysis and benchmarking. Data on trends from year to year are provided for some topics, but it should be noted that the population sampled was not the same each year. 1

con ontents About the Survey... 1 Methodology... 1 About Blackbaud... 4 Key Findings... 5 General Operations... 5 Fundraising... 5 Technology and Internet Usage... 5 Accountability and Stewardship... 5 The State of the Not-for-Profit Industry in 2010: How Organisations Are Dealing with Key Issues... 7 General Operations... 7 Expected Staffing Changes This Year vs. Next Year... 7 Expected Change in Demand for Organisation's Services This Year vs. Next Year... 8 Expected Change in Total Income This Year vs. Next Year... 9 Expected Change in Charitable Income This Year vs. Next Year... 10 Expected Change in Total Expenditures This Year vs. Next Year... 11 Percentage of Respondents Expecting an Increase, by General Operations Category... 12 Funding Sources in 2010... 16 Percentage of Those Receiving Revenue from Each Source Who Expect a 2010 Funding Increase from that Source 17 Percentage of Respondents Expecting Funding Sources to Increase or Stay the Same, 2009-2010... 18 Rating of Importance vs. Performance for Business Practices... 19 Fundraising... 20 Top Drivers of Donations... 20 Donor Acquisition Activities in 2010... 21 Fundraising Methods Used to Drive Donations, 2010... 22 Percentage of Those Receiving Revenue from Each Fundraising Method Who Expect a 2010 Funding Increase from that Method.. 23 Projected Change in Investment in Fundraising in 2010... 25 Most Commonly Used Donor Communication Methods... 26 Technology and Branding Practices... 27 Technology and Internet Usage... 28 2 Rating of Importance vs. Performance for Organisation's Technology Systems... 29 Importance of Communication with Donors and Supporters via Web and Email... 30 Importance of Website Activities to Respondent Organisations... 31 Use of Online Tools by Respondent Organisations... 33 Effectiveness of Organisation's Website in Meeting Strategic Internet Goals... 34 Primary Groups of People Who Visit Respondent Organisation's Website... 35 Management of Organisation's Website... 36 Functional Areas with Primary Responsibility for Website Content and Direction... 37 Percentage of Respondent Organisations that Actively Raise Funds Online... 38

Top Drivers of Online Donations Last Year and This Year... 39 Accountability and Stewardship... 40 Percentage of Organisations Whose Donors Ask to Be Updated on How Their Contributions Were Spent... 40 Percentage of Organisations Whose Donors Ask that Their Contributions Be Restricted... 41 Effects of Increased Restricted Gifts on Respondent Organisations... 42 Accountability and Stewardship Practices of Respondent Organisations... 44 Demographics of Respondents... 45 Respondent Organisations by Country... 45 Respondent Organisations by Industry... 46 Respondents by Revenue Size in Last Fiscal Year... 47 Respondents by Charitable Contributions in Last Fiscal Year... 48 Functional Area of Survey Respondents... 49 3

about blackbaud Blackbaud is the leading global provider of software and services designed specifically for not-for-profit organisations, enabling them to improve operational efficiency, build strong relationships, and raise more money to support their missions. Approximately 22,000 organisations including University of Arizona Foundation, American Red Cross, Cancer Research UK, The Taft School, Lincoln Center, In Touch Ministries, Tulsa Community Foundation, Ursinus College, Earthjustice, International Fund for Animal Welfare, and the WGBH Educational Foundation 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 not-for-profits 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. about the fundraising institute of new zealand (FINZ) The Fundraising Institute of New Zealand (FINZ) is the professional body for those employed in or involved with fundraising, sponsorship and events in the not-for-profit sector. Our aim is to promote and uphold professional and ethical fundraising and encourage the development of philanthropy in New Zealand. The Fundraising Institute of New Zealand serves: Organisations working to provide services and raise funds in the charitable and not for profit sector. Fundraisers and volunteers employed to assist charitable organisations to achieve their mission. The public of New Zealand who donate funds and obtain services from charitable organisations. For more information, visit www.finz.org.nz. 4

key findings f General Operations A majority of survey respondents from not-for-profit organisations in Australia and New Zealand expect their organisation s total income, income from charitable giving, and expenses to increase in 2010 and 2011. Most expect demand for the organisation s services to increase, but 30 percent say their staffing levels will remain static in 2010 in spite of the increased demand. Sixty percent expect their staffing levels to increase in 2011. Fundraising Individual and corporate donations were cited by the largest percentage of survey participants as sources of increased funding in 2010. When asked to rate the importance of various business practices related to management and fundraising, participants chose maintaining relationships with supporters and retaining current donors as most important. Retaining donors and retaining staff were ranked highest in terms of organisational performance. The largest gap between importance and performance is in the area of recruiting new donors. Nearly 70 percent expect to increase organisational investment in donor recruitment in the coming year. The top drivers of donations are direct mail, special events, one-on-one solicitation of major donors, and planned gifts/bequests, all of which are predicted by most respondents to produce increased revenue in 2010. Direct mail and special events are the most frequently cited ways of reaching out to new potential donors, followed by online donations. Technology and Internet Usage Many survey participants use online tools in their communication and fundraising efforts. Websites are most frequently used to market the organisation and educate the public about the organisation s mission. The second most frequently cited use of the organisational website is for communicating with supporters. Mail and email are the most frequently used methods of communicating with constituents. The top driver of online donations is email to current donors, followed by direct mail promotion of online giving. Organisations also use online tools for online payments and electronic newsletters. About half use social networking tools (Facebook, Twitter, etc.), and a third plan to use social networking tools in the future, but social networking is not a top driver of online donations. Findings from the 2010 survey suggest that technology is becoming increasingly important to not-for-profit organisations in implementing their marketing and fundraising activities effectively. More than half of survey respondents have a technology budget, a branding/marketing strategy, employees who work remotely, and a data services budget. When asked to rate the importance of various technology systems, respondents indicated that having a unified database that contains all information on donors and other supporters is the most important technology system, followed by consolidated reporting of operational results. Accountability and Stewardship About half of respondent organisations receive requests from donors for reports on how donations are spent, and 61 percent receive requests to have contributions restricted for a particular purpose. For the organisations that report increasing requests for gift restrictions, more than 40 percent are having trouble obtaining funds for general operating support. Strategies for counteracting negative effects of increased gift restrictions include specifically soliciting unrestricted gifts and seeking additional grants and non-grant revenue. 5

Respondent organisations have clearly been focusing on practices to ensure accountability and good stewardship. Nearly all survey participants report their organisations have audited financial statements, and most report they communicate proactively on the impact of programs and how donations were spent. A majority also have policies and practices to protect donor privacy and an audit committee. 6

the sta s tate te of the not-fo or-profit rofit industry in 2010: how organisation rganisations s are deal ling with key issues i General Operations Respondents were asked about anticipated changes in overall staffing levels, demand for their organisations services, revenue, expenses, and income from charitable donations. Staffing: Most expect levels to increase slightly this year but increase more next year. Forty-eight percent of respondents expect staffing levels to stay the same this year, and 41 percent expect staffing levels to increase. The picture changes next year, however. Sixty percent expect staffing levels to increase, 36 percent expect staffing levels to remain static, and only 4 percent expect staffing levels to decrease. Projections for increases in staffing levels declined from 55 percent expecting an increase in 2008 to only 41 percent in 2010. However, 60 percent are expecting an increase in 2011. Expected Staffing Changes This Year vs. Next Year N=169 Percentage of Respondents 60% 50% 40% 30% 20% 10% 0% 4% 2% Increase more than 30% 7% 5% Increase 16%-30% This Year 4% 7% Next Year 2% 5% 30% 53% Increase 1%-15% 48% 36% Stay the same 10% 4% Decrease 1%-15% 0% 0% 1% 0% Decrease 16%-30% Decrease more than 30% 30% 48% 10% 0% 1% 53% 36% 4% 0% 0% 7

Demand for Services: Most expect a slight increase this year and next. The majority (more than 80 percent) of respondents reported they expect demand for their organisation s services to increase this year and next year. Only 15 percent expect demand to stay the same in each year, and 2 percent expect a decrease this year only. Projected demand has remained approximately the same during the years the study has been conducted. Expected Change in Demand for Organisation's Services This Year vs. Next Year N=167 Percentage of Respondents 70% 60% 50% 40% 30% 20% 10% 0% 12% 8% Increase more than 30% 23% 17% Increase 16%-30% This Year 12% 23% Next Year 8% 17% 48% 60% Increase 1%-15% 15% 15% Stay the same 2% 0% 0% 0% Decrease 1%-15% Decrease 16%-30% 48% 15% 2% 0% 60% 15% 0% 0% 0% 0% Decrease more than 30% 0% 0% 8

Total Income: Most expect increases this year and next. More than 70 percent of respondents expect total income to increase this year. Sixteen percent expect income to stay the same, and 14 percent expect a decrease. Next year,, however, nearly 82 percent expect income to increase, 15 percent expect income to remain static, and only 3 percent expect a decrease. During the years the study has been conducted, projections for increases in total income varied from year to year. Seventy-one percent expected an increase in 2008, vs. 55 percent in 2009 and 70 percent in 2010. Expected Change in Total Income This Year vs. Next Year N=168 Percentage of Respondents 70% 60% 50% 40% 30% 20% 10% 0% 5% 5% Increase more than 30% This Year 5% Next Year 5% 15% 13% Increase 16%-30% 52% 62% Increase 1%-15% 16% 15% Stay the same 13% Decrease 1%-15% 13% 52% 16% 13% 15% 62% 15% 3% 3% 1% 0% 0% 0% Decrease 16%-30% Decrease more than 30% 1% 0% 0% 0% 9

Charitable Income: Most expect increases this year and next. Respondents to the survey are optimistic about charitable income this year and next year. Approximately 65 percent expect income to increase this year, while 18 percent anticipate charitable income will remain the same, and only 17 percent expect a decrease. The percentage who expect an increase in charitable income next year rises to 80 percent, while 20 percent expect charitable income to remain the same, and only 2 percent expect it to decrease. During the years the study has been conducted, projections for increases in charitable income have varied from year to year. Sixty-three percent expected an increase in 2008, vs. 55 percent in 2009 and 64 percent in 2010. Expected Change in Charitable Income This Year vs. Next Year N=166 Percentage of Respondents 70% 60% 50% 40% 30% 20% 10% 0% 5% 4% Increase more than 30% 15% 11% Increase 16%-30% This Year 5% 11% Next Year 4% 15% 48% 59% Increase 1%-15% 18% 20% Stay the same 16% 2% Decrease 1%-15% 1% 0% Decrease 16%-30% 48% 18% 16% 1% 59% 20% 2% 0% 0% 0% Decrease more than 30% 0% 0% 10

Total Expenditures: Most expect increases each year comparable to those in charitable income. Respondents expect total expenditures for their not-for-profits to increase this year and next year. Approximately 67 percent expect expenditures to increase this year, while 23 percent anticipate expenditures will remain the same, and only 10 percent expect a decrease. The percentage who expect an increase in expenditures next year rises to 77 percent, while 18 percent expect expenditures to remain the same, and only 5 percent expect a decrease. Projections for total expenditures have varied during the years the study has been conducted, from 79 percent expecting an increase in 2008, to 60 percent in 2009, to 67 percent in 2010. Expected Change in Total Expenditures This Year vs. Next Year N=166 Percentage of Respondents 70% 60% 50% 40% 30% 20% 10% 0% 5% 3% Increase more than 30% 11% 9% Increase 16%-30% This Year 5% 11% Next Year 3% 9% 51% 65% Increase 1%-15% 23% 18% Stay the same 9% 4% Decrease 1%-15% Decrease 16%-30% 51% 23% 9% 1% 65% 18% 4% 1% 1% 1% 1% 0% Decrease more than 30% 1% 0% 11

General Operations: Respondents are optimistic about projections. In summary, respondents are optimistic about general operations categories this year and next year, with 41-83 percent expecting increases in 2010, and 60-85 percent expecting increases in 2011. Percentage of Respondents Expecting an Increase, by General Operations Category N=169 90% 80% Percentage of Respondents 70% 60% 50% 40% 30% 20% 10% 0% Overall staffing level Demand for your organisation's services Total income Income from charitable donations Total expenditures 2010 41% 83% 70% 65% 67% 2011 60% 85% 82% 78% 77% 12

Job Assignments: In most organisations, fundraisers wear many hats. Respondents were asked how a variety of job functions are represented in their organisation. Most respondents reported that specific fundraising-related job functions such as stewardship, direct mail, endowments, major giving and prospect research are performed in combination as components of an individual s job and not considered a full-time position in themselves. A larger percentage reported that functions such as accounting, marketing, and data/computer systems are full-time. The telemarketing and data/computer systems functions are the most likely to be outsourced. Fifty-six percent reported that telemarketing is not applicable to their organisation. Other functions reported as not applicable include endowments (33 percent), face to face fundraising (29 percent), and stewardship (21 percent). 13

Assignment of Fundraising and Other Responsibilities N=172 Full-time position Part of someone's job Part-time position Volunteer position Outsourced Online Fundraising Recurring giving Special Events 6% 8% 16% 75% 71% 67% Telemarketing 7% 15% Face to Face Fundraising 10% 46% Donor Care (data hygiene) Stewardship Direct Mail Grant Writing 14% 12% 15% 11% 67% 62% 67% 61% Accounting 55% 20% Marketing Data/Computer Systems 32% 31% 45% 53% Online Marketing 11% 72% Endowments 5% 54% Planned Gifts/Bequests Prospect Research Major Gifts 4% 13% 16% 69% 59% 62% 0% 10% 20% 30% 40% 50% 60% 70% 80% Percentage of Respondents 90% 100% 14

Job Function Full-time position Part of someone's job Part-time position Volunteer position Outsourced N/A Major Gifts 16% 62% 3% 3% 1% 16% Prospect Research 4% 69% 5% 4% 5% 14% Planned Gifts/Bequests 13% 59% 8% 3% 0% 17% Endowments 5% 54% 4% 2% 1% 33% Online Marketing 11% 72% 5% 5% 3% 5% Data/Computer Systems 31% 45% 4% 4% 15% 2% Marketing 32% 53% 5% 5% 2% 3% Accounting 55% 20% 12% 5% 6% 2% Grant Writing 11% 61% 12% 4% 3% 10% Direct Mail 15% 67% 2% 4% 2% 11% Stewardship 12% 62% 2% 3% 1% 21% Donor Care (data hygiene) 14% 67% 6% 3% 2% 9% Face to Face Fundraising 10% 46% 3% 6% 6% 29% Telemarketing 7% 15% 2% 2% 18% 56% Special Events 16% 67% 6% 6% 1% 4% Recurring giving 8% 71% 6% 4% 1% 11% Online Fundraising 6% 75% 2% 3% 1% 12% 15

Funding: Respondents receive funding from a variety of sources. Funding sources cited most often are total individual donations (98 percent), individual donations from major giving (92 percent), investments (89 percent), corporate donations (88 percent), individual donations from committed giving (86 percent), individual donations from planned giving/bequests (86 percent) and foundation grants (85 percent). Sources least frequently cited are for-profit business ventures (37 percent), online events (50 percent), memberships (53 percent) and retail sales (54 percent). Funding Sources in 2010 N=155 Individual donations - total Individual donations from major giving Investments Corporate donations Individual donations from committed giving (direct debit) Individual donations from planned gifts and bequests Foundation grants Special events Government grants Individual donations from payroll giving 98% 92% 89% 88% 86% 86% 85% 81% 80% 75% Fees for program services 65% Retail sales Memberships Online events 54% 53% 50% For-profit business ventures 37% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% %100% Percentage of Respondents 16

Funding: Virtually all expect all types of funding to increase in 2010. When asked about expected changes in funding sources, respondents reported the sources most likely to increase in 2010 are total individual donations (72 percent), individual donations from major gifts (58 percent), individual donations from committed giving (direct debit) (52 percent) ), and corporate donations (52 percent). Percentage of Those Receiving Revenue from Each Source Who Expect a 2010 Funding Increase from that Source N=155 Individual donations - total 72% Individual donations from major giving 58% Investments 35% Corporate donations Individual donations from committed giving (direct debit) Individual donations from planned gifts and bequests 42% 52% 52% Foundation grants 47% Special events Government grants Individual donations from payroll giving Fees for program services 38% 38% 33% 35% Retail sales Memberships 21% 22% Online events 32% For-profit business ventures 17% 0% 10% 20% 30% 40% 50% 60% 70% 80% Percentage of Respondents 17

The following chart illustrates changes in projections since the 2009 survey. Seventy-seven percent of respondents predicted individual donations would increase or stay the same in 2009; 88 percent did in 2010. Whereas 81 percent predicted that planned giving and bequests would increase or stay the same in 2009, only 72 percent did so in 2010. Corporate donations were expected to increase or stay the same by 63 percent of respondents in 2009, and 79 percent in 2010. And government grants were expected to increase or stay the same by 68 percent in 2009, and 74 percent in 2010. Predictions for individual donations from committed giving are about the same for both years. Percentage of Respondents Expecting Funding Sources to Increase or Stay the Same, 2009-2010 2009 Increase or Stay the Same 2010 Increase or Stay the Same Percentage of Respondents 77% 88% 81% 72% 85% 83% 63% 79% 68% 74% Individual donations - total Individual donations from planned gifts and bequests Individual donations from committed giving (direct debit) Corporate donations Government grants 18

Business Practices: Most see a gap between importance and performance except in relation to competing with other not-for-profits. Respondents were asked to rate the importance of various business practices on a scale of 1-10 where 1 is not important at all and 10 is extremely important. Then they were asked to rate their organisation s performance related to those practices. The following chart shows average ratings of both importance and performance, and the gap between the two scores. In general, respondents rated their performance 1-3 points lower than importance, except in the case of competition with other not-forprofits, an area where they rated performance higher than importance. Areas with the highest average importance rating are managing relationships with supporters (9.2) and retaining current donors (9.1). Areas with the highest performance ratings are retaining staff (7.2) and retaining current donors (7.0). The largest gaps are in recruiting new donors (3.0) and managing relationships with supporters (2.4). Rating of Importance vs. Performance for Business Practices N=161 Average Importance Average Org Rating Gap Recruiting new donors Retaining current donors Competing with other not-for-profits -0.6 Retaining staff Showing impact of organisation's activities Ensuring operational efficiencies Managing relationships with supporters Maintaining organisational data Utilising social media 1.1 3.0 2.1 2.1 1.9 2.4 2.0 2.1 5.7 7.0 5.3 5.9 7.2 6.5 6.7 6.9 6.7 6.8 4.7 8.7 9.1 8.3 8.7 8.6 9.2 8.7-2.0 0.0 2.0 4.0 6.0 8.0 Rating 10.0 19

Fundraising Several questions on the survey asked for information about fundraising, including top drivers of donations, methods for reaching out to new potential donors, expected changes in contributions from a variety of fundraising activities, expected changes in the organisation s financial investment in fundraising, methods of communicating with donors, and technology and branding practices that affect fundraising. Fundraising Drivers: Direct mail is seen as most important; special events, planned giving bequests and one-on-one solicitation are next. When asked to rank the fundraising efforts that are the top drivers of donations to the organisation, respondents give direct mail, special events, one-on-one solicitations of major donors, and planned gifts/bequests the highest overall ratings. These results correlate with the job functions chart on page 14, which indicates that direct mail, special events, and major gifts are more likely than some other fundraising activities to be full-time positions or part of an individual s full-time position. In the 2008 and 2009 studies, direct mail was the top driver of donations, followed by recurring giving, bequests and one-onone solicitation of major donors. The lowest ranked fundraising activities are door-to-door collections, SMS (text messaging), and social networking (Facebook, Twitter, etc.). Top Drivers of Donations N=146 Direct mail Special events One-on on-one one solicitation of major donors 20

Donor Acquisition: Special events and direct mail are most frequently used; online donations and major donor cultivation are next. Respondents were asked to describe methods used to reach out to new potential donors. The most frequently used methods are direct mail (70 percent), special events (67 percent), online donations (57 percent), and major donor cultivation (51 percent). These results are consistent with findings on the job functions chart on page 14, whichh indicates that direct mail, special events, online marketing, and major gifts are more likely than some other fundraising activities to be full-time positions or part of an individual s full-time position. The methods used least frequently are SMS (text messaging) (2 percent) and telemarketing (19 percent). Seven percent indicated they use other methods, including DRTV, face-to-face meetings and memorials to attract new potential donors. Donor Acquisition Activities in 2010 N=148 Direct mail Special events 67% 70% Online donations Major donor cultivation 51% 57% Community fundraising Face-to-face fundraising Email Planned gifts/bequests Social Networking (Twitter, Facebook, etc.) 45% 43% 37% 35% 32% Telemarketing/ Phone-a-thons 19% Other 7% SMS (Text Messaging) 2% 0% 10% 20% 30% 40% 50% 60% 70% 80% Percentage of Respondents 21

Fundraising Methods: Respondents use a variety of methods to drive donations. The fundraising methods cited most frequently by respondents are major donor cultivation (90 percent), recurring giving (i.e. automatic donations at regular intervals) (89 percent), and direct mail for single gifts (87 percent) ). Methods least frequently used are door-to-door collections (23 percent) and SMS (text messaging) (25 percent). Fundraising Methods Used to Drive Donations, 2010 N=141 Major donor cultivation Website donations Recurring giving Special events Direct mail for single gifts Planned gifts/bequests Email Face-to-face fundraising Social Networking (Twitter, Facebook, etc.) Matching gifts Telemarketing/Phone-a-thons 90% 89% 87% 84% 83% 82% 69% 67% 55% 55% 43% SMS (Text messaging) Door-to-door collections 25% 23% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Percentage of Respondents 22

Contributions: All forms of giving are expected to increase in 2010. The majority of respondents are optimistic about changes in contributions in 2010. Sixty-seven percent expect website donations to increase. Other methods projected to produce increased contributions are major donor cultivation (66 percent), recurring giving (65 percent), and direct mail for single gifts (59 percent). Results from previous years have been similar, although the percentage who predicted an increase from major donor cultivation in 2009 dipped to 48 percent, possibly reflecting the economic downturn. The 2010 results are consistent with findings on the job functions chart on page 14, which indicates that online marketing, major gifts, recurring giving, and direct mail are more likely than some other fundraising activities to be full-time positions or part of an individual s full-time job. Results are also consistent with findings on the importance of communication with donors and supporters via the web (see chart on page 30), and the importance of website activities to the organisation (see chart on page 31). Percentage of Those Receiving Revenue from Each Fundraising Method Who Expect a 2010 Funding Increase from that Method N=141 Major donor cultivation Website donations Recurring giving Special events Direct mail for single gifts Planned gifts/bequests Email Face-to-face fundraising Social Networking (Twitter, Facebook, etc.) Matching gifts Telemarketing/Phone-a-thons SMS (Text messaging) Door-to-door collections 5% 5% 19% 20% 29% 48% 46% 41% 45% 66% 67% 65% 59% 0% 10% 20% 30% 40% 50% 60% 70% 80% Percentage of Respondents 23

Investment: Most expect new donor recruitment, donor retention, and data enrichment investments to grow in 2010, no change in fundraising staff investment. Reflecting organisations changing fundraising strategies, respondents report significant changes in projected investment in fundraising. Increases are most frequently projected for recruiting new donors (68 percent), retaining current donors (57 percent), and data enrichment (56 percent). Results were similar in the 2009 study, except the percentage predicting increases for data enrichment has increased significantly from 30 percent in 2009 to 56 percent in 2010. Similar to the findings in 2009, about half (53 percent) expect investment in fundraising staff to remain static in 2010. Other areas in which static investment is projected include direct mail (39 percent in 2010; up from 51 percent in 2009), retaining current donors (37 percent in 2010, down from 44 percent in 2009), fundraising/direct marketing consulting (34 percent in 2010, down from 40 percent in 2009), data enrichment (31 percent), and social networking (30 percent). Static investment is projected more frequently than increases in the areas of fundraising staff (53 percent), fundraising/direct marketing consulting (34 percent), telemarketing (27 percent), SMS (text messaging) (17 percent), and door-to-door collections (14 percent). A small percentage project decreases in investment in fundraising, primarily in the areas of fundraising or direct marketing consulting (6 percent), fundraising staff (6 percent), and direct mail (4 percent). 24

Projected Change in Investment in Fundraising in 2010 N=145 Increase No change Decrease Recruiting new donors 68% 24% 1% Retaining current donors 57% 37% 2% Data enrichment 56% 31% 0% Direct mail 46% 39% 4% Social Networking (Twitter, Facebook, etc.) 40% 30% 0% Fundraising staff 37% 53% 6% Face-to-face fundraising 31% 27% 3% Fundraising/direct marketing consulting 28% 34% 6% Telemarketing 20% 27% 2% SMS (Text messaging) 12% 17% 1% Door-to-door collections 3% 14% 1% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Percentage of Respondents 25

Donor Communications: Mail and email are the most commonly used; personal meetings and phone are next. When asked to rank the donor communication methods most commonly used by their organisation, respondents give mail and email the highest overall ratings. The lowest ranked donor communication methods are SMS (text messaging), social networking (Facebook, Twitter, etc.), and call campaigns. Most Commonly Used Donor Communication Methods N=147 Mail Email Phone 26

Technology and Branding: Most organisations have a technology budget and a branding/marketing strategy; fewer than half have a written strategy or plan. More than half of respondent organisations are employing technology and branding practices that affect organisational management and fundraising, including technology budgeting (68 percent, up from 60 percent in 2009), a branding/marketing strategy (66 percent), employees who work remotely (58 percent), and budgeting for data servicess (58 percent). Business practices most commonly reported as in-development are written online strategies (36 percent), branding/marketing strategy (28 percent), and a written technology plan (22 percent). Some organisations report they have no plans to implement a written technology plan (42 percent) or a written online strategy (39 percent). Technology and Branding Practices N=137 Yes In development No A technology budget 68% 13% 19% A branding/marketing strategy 66% 28% 7% Employees who work remotely 58% 4% 38% A data services budget 58% 11% 31% A technology training budget 47% 16% 37% A written technology plan 36% 22% 42% A written online strategy 24% 36% 39% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Percentage of Respondents 27

Technology and Internet Usage In this section of the survey, respondents were asked questions related to technology systems, use of the organisation s website, and use of online tools. Technology Systems: Most rate their importance higher than their performance. In the first question, respondents were asked to rate the importance of various technology systems. Then they were asked to rate their organisation s performance related to those systems on a scale of 1-10 where 1 is not important at all and 10 is extremely important. The following chart shows average ratings of both importance and performance, and the gap between the two scores. In general, respondents rate performance 1-3 points lower than importance. Areas with the highest average importance rating are having a unified database (9.1) and consolidated reporting of operational results (8.4). These are also the areas in which respondents rate their organisation s performance the highest (6.5 and 6.3, respectively). The largest gaps between perceived importance and organisational performance are in real-time integration of online marketing and fundraising with the donor management database (2.7) and having a unified database (2.6). 28

Rating of Importance vs. Performance for Organisation's Technology Systems N=139 Average Importance Average Org Rating Gap Real-time integration of online marketing and online fundraising with donor management database 2.7 4.4 7.1 7.3 Real-time integration of systems rather than an interface with periodic data transfers 5.4 1.9 Consolidated reporting of operational results 6.3 8.4 2.1 6.1 Databases that can be accessed remotely by employees in other geographies 5.1 1.1 9.1 A unified database that contains all information on donors and other supporters 6.5 2.6 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 Rating 29

Donor Communication: Virtually all rate communicating via the Web and email as important. On a scale of 1-10, where 1 is not importantt at all and 10 is extremely important, 83 percent of respondents report that communicating with donors and other supporters is important to their organisation (rating 7-10 in the scale of importance). Only 6 percent report that communicating with donors and supporters via web or email is unimportant or slightly important (1-3 on the scale of importance). The percentage reporting web and email communication with donors as very important or important has increased steadily during the years the study has been conducted, from 64 percent in 2007 to 83 percent in 2010. Importance of Communication with Donors and Supporters via Web and Email N=139 35% 30% 30% Percentage of Respondents 25% 20% 15% 10% 5% 0% 1% 3% 2% 3% 4% 5% 17% 19% 17% 10 - Extremely important 9 8 7 6 5 4 3 2 1 - Not important at all 30

Website Activities: All rate websites important, especially for marketing and educating the public about the organisation s mission. Respondents reported that their websites are very important to their organisations, with average ratings of website activities ranging in importance from 6.6 to 8.8 on a 1-10 scale where 1 is not important at all and 10 is extremely important. Respondents indicated the most important website activity is marketing the organisation and educating the public about the organisation s mission (8.8 average rating), followed by communicating with supporters (7.9), raising funds (7.9), acquiring new donors and supporters (7.8), promoting campaigns (7.3), and serving program recipients (6.6). Importance of Website Activities to Respondent Organisations N=140 Market your organisation/educate the public about your organisation's mission 8.88 Communicate with supporters (e.g. hyperlink to targeted web pages) 7.9 Raise funds 7.9 Acquire new supporters/donors 7.8 Promote campaigning 7.3 Serve program recipients (beneficiaries) 6.6 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 Rating Average 10.0 31

Online Tools: Organisations use email, online payments, fundraising, and electronic newsletters the most; volunteer management and discussion groups the least. Use of various online tools is common among respondent organisations. Online tools are most frequently used for email (81 percent), followed by online payments (79 percent), fundraising (73 percent), and electronic newsletters (71 percent). Online tools most frequently reported as in the planning stage are polls and surveys (50 percent), weblogs (43 percent), and supporter profile updates (43 percent). A number of respondents indicated their organisations have no plans to use certain online tools, including retail (selling goods) (45 percent), volunteer management (37 percent), discussion groups/message boards (37 percent), and advocacy (35 percent). Reported usage of online tools for all purposes except advocacy has increased during the years of the study. The largest increases have been in use of social media (increasing from 24 percent in 2008 to 54 percent in 2010), electronic newsletters (increasing from 58 percent in 2008 to 71 percent in 2010), and event registration (increasing from 35 percent in 2008 to 46 percent in 2010). 32

Use of Online Tools by Respondent Organisations N=136 Yes No, but plan to No, and do not plan to Email 81% 15% 4% Online payments 79% 18% 4% Fundraising 73% 24% 4% Electronic newsletters 71% 26% 4% Website analytics 67% 23% 9% Search engine optimisation 60% 26% 13% Social networking 54% 32% 14% Campaigning 46% 33% 21% Event registration 46% 28% 26% Retail (sell goods online) 41% 14% 45% "Sponsor me" or group fundraising 38% 33% 29% Advocacy 36% 29% 35% Member acquisition and management 35% 35% 30% Supporter profile updates 26% 43% 31% Polls/surveys 26% 50% 25% Weblogs (blogs) 25% 43% 32% Volunteer management 25% 38% 37% Discussion groups/message boards 23% 40% 37% 0% 10% 20% 30% 40% 50% 60% 70% Percentage of Respondents 80% 90% 100% 33

Website Effectiveness: Forty-three percent rated their website very effective in meeting their strategic Internet goals. Respondents were asked to rate the effectiveness of their organisation s website in meeting organisational strategic Internet goals. Twenty percent rated the website very effective (8 or higher on a scale of 1-10 where 1 is not effective at all and 10 is extremely effective). Effectiveness of Organisation's Website in Meeting Strategic Internet Goals N=139 25% 22% 23% 20% Percentage of Respondents 15% 10% 5% 4% 4% 9% 6% 12% 14% 5% 1% 0% 10 - Extremely effective 9 8 7 6 5 4 3 2 1 - Not effective at all 34

Website Visitors: Supporters are the most frequent visitors; program recipients and volunteers are next. According to respondents, the primary groups of people who visit their website are supporters (80 percent of respondents), volunteers (52 percent), program recipients (45 percent), and members (41 percent). Alumni visitors are relevant only to respondents from education organisations; the percentage of alumni vs. other visitors may be higher in that segment. Primary Groups of People Who Visit Respondent Organisation's Website N=139 Supporters (donations) 80% Volunteers 52% Programme recipients 45% Members 41% Fundraisers 32% Alumni 22% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Percentage of Respondents 35

Website Management: More than two-thirds of organisations manage their website in-house. Most respondents (68 percent) report that their organisation s website is managed in-house. Twenty-three percent report the organisation s website is managed by a third-party provider. Among the 9 percent who indicatedd neither of these options, most report that the website is managed jointly by in-house staff and a third-party provider. Management of Organisation's Website N=139 Other 9% By a thirdprovider 23% party In-house 68% 36

Website Content and Direction: Most assign responsibility to marketing/communications/public relations departments. When asked which functional area has primary responsibility for managing website content and direction, 52 percent of respondents indicated this is a marketing/communications/public relations function. Twenty-one percent reported it is an executive function. A smaller percentage reported that content and direction are managed by fundraising/development (15 percent), or technology services (8 percent).. In 2009 there was shift from the technology services team to the marketing/communications/public relations team as the group with primary responsibility for website content and direction. In 2010, the marketing staff continue to be the primary caretakers of website content and direction. Functional Areas with Primary Responsibility for Website Content and Direction N=139 Membership 0% Other 4% Technology services 8% Fundraising/ Development 15% Marketing/ Communications /Public Relations 52% Executive 21% 37

Online Fundraising: Nearly two-thirds of organisations actively raise funds online. The majority of respondent organisations (64 percent) actively raise funds online. Percentage of Respondent Organisations that Actively Raise Funds Online N=143 Do not actively raise funds online 36% Actively raise funds online 64% 38

Online Donation Drivers: Email to current donors is rated top driver by far. Last year 58 percent of respondents indicated that their top driver of online donations was email to current donors, followed by direct mail promotions (40 percent). This year respondents anticipate a similar pattern with 53 percent indicating email to current donors will be the top driver of online donations, and 35 percent predicting direct mail promotions will be the top driver. Email to potential new donors is predicted to be a top driver by a greater percentage this year than last year (30 percent this year vs. 21 percent last year). Another top driver activity that respondents expect to increase over last year is social networking (Facebook, Twitter, etc.) (16 percent this year vs. 6 percent last year). Top Drivers of Online Donations Last Year and This Year N=87 39

Accountability and Stewardship This section of the survey focused on questions about whether donors expect to be updated on how their contributions are spent, whether they are asking that their contributions be restricted for a particular purpose, and how increases in gift restrictions are affecting the organisation. There is also a question on steps the organisation has taken or plans to take to ensure accountability and good stewardship. Use of Contributions: Half of respondents say their donors ask to be updated; half do not. As the following chart illustrates, half of respondents report their donors ask to be updated on how their contributions are spent. This is a significant increase. In previous years of the study (2005-2009), just over a third of organisations reported that donors asked to be updated on how contributions were spent. Percentage of Organisations Whose Donors Ask to Be Updated on How Their Contributions Were Spent N=127 Donors do not ask to be updated 50% Donors ask to be updated 50% 40

Use of Contributions: More than half of respondents indicate their donors ask to restrict their contributions for a certain purpose. More than half (61 percent) of respondents indicate that donors ask that their contribution be restricted for a certain purpose. In previous years of the study, there has been considerable variance in the percentage of organisations reporting that donors asked to be updated on how contributions were spent: 45 percent in 2005, decreasing to about a third in the years 2007-2009, and increasing to 61 percent in 2010. Percentage of Organisations Whose Donors Ask that Their Contributions Be Restricted N=132 Donors do not restrict contributions 39% Donors restrict contributions 61% 41

Effects of Restricted Gift Growth: Forty-three percent of organisations that have been affected by requests for restricted gifts report trouble soliciting unrestricted gifts. For the organisations that reported an increasing number of restricted gifts, 43 percent reported their organisations are having trouble getting funds for general operating support. Thirty-five percent said the increased restricted gifts have had no effect on the organisation. Strategies being employed to counteract negative effects of increasing numbers of restricted gifts include specifically soliciting unrestricted gifts (29 percent of respondents), seeking additional foundation grants for operating expenses (28 percent), seeking other non-grant revenue sources for operating expenses (25 percent), seeking additional government grants (22 percent), and limiting the number of initiatives for which restricted grants are accepted (8 percent). Effects of Increased Restricted Gifts on Respondent Organisations N=79 Trouble getting funds for general operating purposes 43% No effect on our organisation 35% Specifically soliciting unrestricted gifts Seeking foundation grants for operating expenses Seeking non-grant revenue sources for operating expenses Seeking government grants forgeneral operating expenses 29% 28% 25% 22% Limit initiatives for which we accept restricted gifts 8% Other 4% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Percentage of Respondents 42

Accountability and Stewardship Practices: Nearly all have financial audits; only about half have other recommended practices in place. As the following chart illustrates, respondent organisations have clearly been focusing on practices to ensure accountability and good stewardship. Ninety-eight percent of respondents report their organisations have audited financial statements. Other practices in place include communicating proactively on the impact of programs (79 percent), instituting or updating formal privacy policies for donor information (87 percent), communicating proactively to donors on how donations were spent (72 percent), instituting or updating formal privacy policies for website and online data capture (70 percent), having an audit committee (68 percent), and instituting or updating staff confidentiality agreements to ensure secure donor data (62 percent). The lowest percentage (57 percent) reported having a formal policy and plan to meet PCI. However, 40 percent say their organisation plans to implement a policy and plan. Other practices organisations have plans to implement are staff confidentiality agreements to secure donor data (26 percent), privacy policies for website and online data capture (25 percent), and active communication with donors on how donations were spent (22 percent). A small percentage of organisations have no plans to implement certain practices, including forming an audit committee (22 percent), and instituting or updating staff confidentiality agreements to ensure secure donor data (13 percent). 43

Accountability and Stewardship Practices of Respondent Organisations N=129 Implemented more than 1 year ago Plan to implement Implemented within the past year Instituted/updated formal privacy policies for website and online data capture 47% 23% 25% Formed audit committee 57% 11% 10% Instituted formal policy and plan to meet PCI 31% 26% 40% Instituted/updated staff confidentiality agreements to ensure secure donor data 50% 11% 26% Instituted/updated formal privacy policies for donor information 59% 18% 18% Communicated proactively on the impact of programs 60% 19% 16% Communicated proactively to donors on how donations were spent 54% 18% 22% Audited financial statements 89% 9%1% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90%100% Percentage of Respondents 44

demographics of respo ndents Nationality: More than half of respondents are from the Australia. Fifty-nine percent of respondents to the Asia Pacific survey are from Australia, and 41 percent are from New Zealand. Respondent Organisations by Country N=176 New Zealand 41% Australia 59% 45

Industries: Healthcare and social services have the most respondents. Twenty-three percent of respondents are in the healthcare industry (hospital, hospice, research, healthcare foundations). Eleven percent are from higher education institutions, 8 percent from social service organisations, 7 percent from community and youth organisations (YMCA, sport clubs), 7 percent from international organisations, 6 percent from religious organisations (churches, mission groups, religious centers), and 5 percent from environmental organisations. Three percent are from schools (primary, secondary, school foundations), 4 percent from animal-related organisations (other than aquariums and zoos), and 3 percent from arts and cultural organisations (museums, ballet, symphony). Less than 2 percent are from private foundations, public foundations, or aquariums and zoos, respectively. Respondent Organisations by Industry N=135 Animal-related 4% Other 18% Aquarium or zoo 1% Arts and culturall 3% Community and youth 7% Environmental 5% Social service 8% School 3% Foundation (private) 2% Foundation (public) 1% Religious 6% International 7% Higher education 11% Healthcare 24% 46