Drakes Bay Fundraising
A Next Generation Fundraising Company

Archive for the ‘Consumer Confidence Index’ Category

Consumer Confidence Plunges

Posted by Christopher Dann
Tuesday August 30, 2011
Categories: Consumer Confidence Index
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While it was evident consumer confidence would be rattled by the debacle that attended increasing the federal debt ceiling, by monetary crises in Europe, and by the pronouncements of  Presidential candidates, it was not expected to take the plunge it did in August, from an adjusted July 59.2 to 44.5.

This news does not bode well for fall fundraising.

Here is what the Great Recession has looked like from the vantage of consumer confidence. We think it best represents what the Great Recession looks like for the nonprofit sector, at least as far as individual giving is concerned.

This month’s index is the lowest since April ’09 when it was at 40.8.

Reminded that the Consumer Confidence Index foretells what people will be doing with their discretionary income, and that all individual giving but estate giving comes from discretionary income, the August Index tells us it’s time to hedge on estimates of year-end giving. It’s also time to plan for aggressive marketing support of fall campaigns.

Harbingers of Fundraising Trends

Posted by Christopher Dann
Tuesday July 12, 2011
Categories: Consumer Confidence Index, Fundraising
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All giving comes from discretionary income (or it doesn’t come at all!). That’s why we pay such close attention to the Consumer Confidence Index. Some academics in the past have disputed the correlation, but we’re convinced the Index gives clear insight into how consumers are likely to be spending discretionary income.

The latest Bureau of Labor Statistics Consumer Expenditure Survey offers, we think, reasonable evidence.  The CCI has been in the cellar since the Great Recession started and has stayed there since those who presumed to know declared the recession’s end. Here, then, is a selection of items from the BLS survey that we’d characterize as objects of discretionary spending, and here’s what happened to them from 2006 to 2009:

Item % Decline in Spending
Food away from home –   8.6%
Alcoholic beverages – 17.8%
Household furnishings and equipment – 17.1%
Apparel – 13.5%
Vehicle purchases – 27.0%
Reading materials – 11.7%
Cash contributions –13.4%

 

 

 

 

We’re fairly certain that for most people, the restoration of most or all those items preceding cash contributions will precede the restoration of their giving unless nonprofit organizations figure out how to compete more effectively for discretionary income. Even so, watching for the upswing of items like dining out, new car purchasing, and furniture is, we think, a good way to foresee the upswing of giving.

By now, most in our field should know that an organization’s need is irrelevant; what’s relevant is its case for support, what needs to get done and can’t get done without the renewed support of donors.

 

Things are Looking Up (We Think)

Posted by Christopher Dann
Wednesday March 2, 2011
Categories: Consumer Confidence Index
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The fiscal budget process is underway for most nonprofit organizations. Things certainly feel a lot better than they have since the fall of 2008. But we still have to hedge.

A sideways glance at the Consumer Confidence Index (CCI) brings some hope. This is an excellent indicator of what donors are going to do with money at their discretion. But dig deeper into the underlying research and you’ll see that the confidence of consumers 55 and older lags the overall index by a considerable margin. This age group has the second-most available discretionary money and represents most organizations’ core donors.

This sobering perspective continues in American Incomes – Demographics of Who Has Money (New Strategist Publications). They tracked changes in average household income by age ranges from 2000 to 2008. All age groups below 55 lost ground. But the biggest losers with a 10.7% decline were households headed by people 45 to 54. These individuals have the highest discretionary income, which makes them the greatest prospect for finding new donors.

 

Next Generation Fundraising and Drakes Bay Fundraising merged in the fall of 2013, bringing the longstanding professional acquaintances of their four principals – Tim Oleary, Carol Leister, Cindy Germain, and Christopher Dann – into a single company and combining the special resources and experiences of each to provide clients greater breadth and depth of service.

For more information about Next Generation Fundraising, click here.