Who are the best fundraisers in The Netherlands?
Last week the Central Bureau Fundraising (CBF) in The Netherlands released their 2010 overview of fundraising (read it in Dutch or the English Google translation). Most news about these figures is about general market trends, or growth compared to last year, but never ever really gives you an insight you can work with as a fundraiser. But it’s always interesting to have a closer look, because we can learn more from these figures.
I’m always particularly interested in the organizations that are showing growth figures over a longer period of time, because it shows consistent good performance.
I focused my little analysis on the top 50 fundraising organizations in 2010. In 2006 they raised €760M and in 2010 the same group of organizations raised €936M. This group consists of charities that all raise more than €5M.
By far the biggest charity in The Netherlands is the Cancer Society (KWF) raising €103M in 2010. The distant number 2 is Unicef raising approximately half of that. The Top 10 Fundraising organizations in The Netherlands in 2010 (gross income) looks like this:
This is just to see who is raising the most, but is not saying anything about who is actually doing good in fundraising. So, the next thing we do is take a look who has grown the most compared to last year:
It’s obviously interesting to see who has grown the most last year. But a one-off legacy or a big emergency can easily give you a fabulous result in a single year. So what we want to do is take a look at the last 4 or 5 years, to see the growth trend per organization. So let’s look at a key metric that is much more interesting: the CAGR.
The Compound Annual Growth Rate “…is the year-over-year growth rate of an investment over a specified period of time. It’s an imaginary number that describes the rate at which an investment would have grown if it grew at a steady rate. You can think of CAGR as a way to smooth out the returns.” (source) Basically it gives us an idea which organization is getting good results in their fundraising over a longer period of time.
Let’s take the Cancer Society as an example: in 2006 they raised €69M and in 2010 they raised €103M. This means that the average annual growth rate is 10.6%. If you grow €69M with 10.6% 4 years in a row, you will end up with their 2010 result, €103M. Got it?
If we do this calculation for the entire top 50 we get a list of which organization has grown the most in the period 2006 – 2010. Out of the 50 charities, there are 21 charities that have grown more than the average CAGR of 5.4%. And 13 of those have double digit growth, which I personally find very impressive. Take a look at your own fundraising results and try to grow annually at least 10% four years in a row…
Both Compassion Nederland and KiKa realized explosive growth rates, growing from a low €4M to a high €10M in this period! But obviously two thumbs up for everyone in this list, absolutely great results!
If you want to take it a step further I suggest you make the same calculation, but then exclude the income from legacies, which are also available on the CBF website. I did that exercise (for the top 20 only) and then you’ll see the following double digit CAGRs…
All these non-legacy income CAGRs are higher than the total income CAGRs. For all 5 this means that the total income growth in the past years was mainly caused by non-legacy income and not by their legacy income, which could be considered a healthy development.
The CBF mentioned in their press release that legacy income for charities, apart from some fluctuations, in the period 2001 – 2010 has remained more or less the same. But that doesn’t mean that in specific segments we can see growth. E.g. the current top 10 organizations receiving income from legacies grew from €100M to €119M… (Or does that account for the approximately 20% inflation over the past 10 years?)
It would be great to go into more detail of specific income categories, but the categories used by the CBF (apart from legacies) are too general to make any fair conclusions, in my opinion.
But our homework doesn’t stop here.
The BIG question is: how did the above 13 charities get to these results???
I am sure there are many answers, which have everything to do with the right investments in financial and human resources, increased donor recruitment, starting up new fundraising activities, re-shaping of donor communication, massive public fundraising campaigns and events, the best internal program and people management and a great focus on key metrics like first-year attrition, donor numbers and loyalty…
Definitly not all of this information is available in annual reports, but we can also learn a lot from monitoring what they are actually doing in their contact with (potential) donors. So, I don’t suggest everybody starts calling Frits, Ellen, Margot, Lars, Lilian or Will, some of the great fundraisers who have worked on these successful programs, but I do suggest you become a donor and e-subscriber of their organizations and follow them more closely than you have done ever before…
And please leave your own insights, questions or comments below!
PS. Dutch readers can also check Walter‘s blog post about the CBF figures.
Gijsbert van der Meulen · December 15, 2011 at 14:35
Another well written article and I agree with you that structural growth is a proper indicator of an organization that is simply doing the right things. I therefore look at success as setting up an organization in such a way that a positive result is the logical consequence of conscious, controllable and reproducible activities.
What I think is missing in your article are the costs involved in acquiring these revenues. As you will probably know, I have quite a few years of experience in generating thousands of donors, in different ways, for various charities. And unfortunately, it takes a lot of money for charities to raise donors through telemarketing or street marketing. So to determine who the best fundraiser is things like creativity and cost efficiency should be included. Though I know that it is impossible to deduct from the CBF figures.
Anyway…. should we set up an annual election for the best fundraiser?
Reinier Spruit · December 16, 2011 at 09:37
Thanks for your comment.
Actually, Fundraising Cost can be downloaded from the CBF website as well. I agree with you that investments have a significant influence on the growth of the fundraising income, but I also have to agree with Maarten (below), that investment is only one of the variables in this equation. However, it is one more that (like income) is quantitative, so is easier to include in such an analyse. The other variables (people, decisions, structure, board, etc.) are in the qualitative area that are more difficult to come by and more difficult to analyse, but have an equal part to play in the outcome of your fundraising result.
Next time I’ll see if I can find a strong correlation between the cost and income side, although from practical experience, if used wisely, every fundraiser already knows the answer…
David Heyer · December 15, 2011 at 15:36
Great post Rein!
You’re the best!
Reinier Spruit · December 16, 2011 at 09:38
Thanks David! In January I expect another great storytelling blog post from you!
maarten de vries · December 15, 2011 at 16:04
An annual election of the best fundraiser is not possible on the basis of these figures. The figures indicate the success of the fundraising organisation. Picking order seldom is a good indication for fundraising succes, as the article clearly shows. The top 10 remain stable. Remarkable are the double digit growth rates. Alpe d Huez certainly was one the key components of the growth rate of KWF.
Costs is a factor in their success, but I doubt whether it is the really boosting one. Doing the right things on the right moment heavily depends on the skill and the experience of the crew and the boldness of its leader.
Reinier Spruit · December 16, 2011 at 09:50
Thanks Maarten, I agree with you, as pointed out in my reply on Gijbert’s comment above.
About KWF’s result. For sure Alpe d’HuZes has had great impact on their result, but than again, I see that most charities often have one or two areas where they get their growth from. If you would treat Alpe d’HuZes as a seperate fundraising entity, they would clearly be number 1 in this long-term growth overview, going from 350K in 2006 to 10M in 2010 (and even 20M in 2011!). With a staggering 131% CAGR over 2006-2010…
However, looking at KWF again, if that income is deducted from KWF’s total income in this period they would still have a 7.9% CAGR in this period, which is above the 5.4% average and I still find very impressive given the scale of the organization.
Thanks again for your comment!
Fraser Green · December 15, 2011 at 22:19
awesome post – thanks!
Reinier Spruit · December 16, 2011 at 09:50
Sean Triner · December 15, 2011 at 22:47
Great stuff, thank you, even for us foreigners. Can you tell me though, for context, how has the Dutch economy (actually) been doing during these growth years and how have been been feeling the economy is and was doing?
Sean Triner · December 15, 2011 at 22:48
Sorry, typo should say ‘how have people been feeling the economy is and was doing?’
Reinier Spruit · December 16, 2011 at 09:58
Good question and it looks like Mitch has already given you some info. There is some more information available about specific “donor trust” done by WWAV (http://www.wwav.nl/userdata/heart_of_the_donor.pdf), but it’s in Dutch I’m afraid. But look at page 20 for the graph combining consumer and donor trust according to their research.
All the best!
Mitch Hinz, WWF · December 16, 2011 at 03:43
Reinier, excellent article. Glad to see that Ronald McDonald House, now headed in fundraising by my good friend Marc van den Tweel, is making the top growth list. OTOH, WWF still is still in the top performers overall, which shows how strong our brand is in the Netherlands.
Sean, excellent question, especially the qualification, which points out that people’s *expectations* about the economy can be more important than economic performance itself. (Those of us with economic degrees know that inflation is, in fact, *caused* by people’s expectations of rising prices, and nothing more).
Here’s a good chart on NL’s growth: http://www.tradingeconomics.com/netherlands/gdp-growth
As you can see, 2009 was a very tough year. But as you’ve said publicly many times, Sean, and I’ve always agreed with you, individual fundraising is (usually) counter-cyclical.
I moved to the Netherlands in June of 2009. By 2010 the GDP was growing again.
Coincidence? ;-). Kidding of course.
Reinier Spruit · December 16, 2011 at 10:01
Thanks Mitch! Also for the financial expertise input!
Looking forward to your next blog entry,
(perhaps about the correlation between your presence in a country and the entire economy? :-) )
Luca Schippa · December 16, 2011 at 12:05
Excellent article Reinier!
My only doubt is about the CAGR as an average growth indicator:
it doesn’t always resolve the issue of having, as Reinier says, one exceptional year due to a legacy income.
In fact, if we calculate, the CAGR 2006-2010, and one organization had the “lucky strike” happening in either of those 2 years, the result will be affected!
A solution is to look also at other indicators besides the CAGR, for example also calculating the median percentage growth in the period (it’s a rougher but more robust indicator).
Reinier Spruit · December 16, 2011 at 14:49
Absolutely right Luca! Looking at both indicators would even better and if the difference is too big, it’s time to check the annual figures to see where the outlier is. Which seems like good advice anyway :-)
Muhwezi Henry · December 17, 2011 at 09:35
Good blog, I wonder how these organisations have managed to fundraiser to this level. May be I will request one of you ,here to help me train me in fundraising to scale up our project activities: See some of our fundraising pages besides other ways we employ. I really need your help in better fundraising skills: http://www.betterplace.org/en/projects/4436-easing-pain-for-people-living-with-hiv-and-aids
globalgiving page: http://www.globalgiving.org/projects/christmas-gifts-for-100-orphans-in-masaka/
Reinier Spruit · December 17, 2011 at 13:21
Sorry, I can’t help you directly. But I do advice you to keep coming back to this blog and other fundraising websites to keep learning from the experience from other fundraisers. I am convinced there is a ton of FREE information out there that can help you raise more funds for your noble work.
I wish you all the best!
PS. Just made a small donation to your 100 orphans project and so should everyone else who sees this message!
David Heyer · December 19, 2011 at 15:54
I propose another way of measuring success/efficiency.
You could benchmark between comparable organizations in a certain segment (health/international aid/culture) and see what the annual income is per organization and with how many fte’s this income is generated.
You can compare your organization with other organizations in the same segment. But is would be wise to limit your search to same segment orgs with comparable annual income. For instance ($ 1,0-3,0 million) and ($ 3,0-$7,5 million) and($7,5-$15 million).
Reinier Spruit · December 20, 2011 at 10:33
Thanks for your comment! I think what you referring to is part of the “more homework” everybody needs to do to find out what makes some organizations better fundraisers than others.
A couple of years ago I focused my “home work” on staff and team structure, which had very interesting results. Some organisations raise the same amount of funds with twice the size in fundraising team than others. Does that mean that they are not efficient? Or are the others leaving money on the table?
Back to our homework…
Reinier · March 19, 2012 at 22:04
The follow up post is published today!
For our English readers:
The 5 fastest growers and their recipe for success
Voor onze Nederlandse lezers:
De 5 snelste groeiers en het recept van hun succes
Stephanie Moraille · October 9, 2014 at 00:33
Hello Reiner, I am the founder of an organization in the US and would like to implement in the NL eventually. What is the process?
TRESFORD CHOMBA · February 28, 2016 at 13:38
We want the appointment of fundraisers for African Nations Poverty Fund and World Healthcare and Education Organisation