5 Takeaways From the Latest Fundraising Effectiveness Project Report

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5 Takeaways From the Latest Fundraising Effectiveness Project Report

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Amanda L. Cole

The number of individual donors keeps falling as the total amount of giving rises. The struggles remain to retain donors and turn one-time donors into repeat donors. These are some of the top observations from the “Quarterly Fundraising Report” by the Fundraising Effectiveness Project, which released 2022’s third-quarter results last week.

“The challenge as I see it is to understand what separates high-performing organizations from those that struggled in this data,” Lori Gusdorf, CAE, executive vice president of the AFP Foundation for Philanthropy, said in a statement. “What did they do that differentiated them from those that saw significant declines in giving? With so much volatility in the market, this needs to be much more clearly understood.”

Here are the biggest takeaways from the latest report, which shows year-over-year trends by comparing the first three quarters — Jan. 1 through Sept. 30 — of 2021 versus 2022.

1. Number of Donors Falls 7.1%

The number of total donors has dropped for four of the past five quarters, according to the Fundraising Effectiveness Project, continuing the trend of fewer people giving to charity. In the most recent report, total donors are down 7.1% year over year. Last year also lags behind 2020’s number of donors.

Related story: Giving USA: Charitable Giving in 2021 Outpaced 2020 But Not Inflation

Donors who contributed less than $500 made up the majority of total donors — nearly 85%. Large decreases in those donor levels contributed to the fall, with 15.4% fewer micro donors — those who contribute less than $100 — and 7.8% fewer small donors — those who contribute between $101 and $500. Approximately 96% of the decrease in the number of donors was due to declines in those giving less than $500.

Lower donor acquisition rates also contributed to this decline, with donors acquired in 2021 and 2022 experiencing decreases in donor counts of 19.2% and 24.7%, respectively. Meanwhile, repeat retained donors, which accounted for 40% of all donors, only decreased by 2%.

2. Total Donation Dollars Continue to Trend Upward to 4.7%

Though the number of donors has dwindled, the amount of total donations continues to steadily rise, with a 4.7% increase year over year. Major donors only make up about 2% of total donors, but they account for a quarter (25.4%) of total donation dollars and supersize donors make up nearly half (49%) of total donation dollars, but they are less than a percent (0.3%) of total donors.

Meanwhile, just as the number of micro- and small-dollar donors have decreased, the amounts they are giving overall have decreased as well. Donations less than $100 resulted in 13.2% fewer total dollars, while donations from $101 to $500 totaled 7% fewer total dollars. When combined, donations less than $500 equaled only 9.3% of total donations.

Though this trend is largely attributed to major and supersize donors giving larger gifts, the Fundraising Effectiveness Project noted that recaptured donors also have impacted that figure. Year over year, there were 7.1% more recaptured donors, identified as those who were recaptured after not giving for at least the previous calendar year, whereas acquired donors in 2021 and 2022 decreased 3.7% and 18.1%, respectively.

3. Donor Retention Dropped 3.1%

Though it’s an improvement over 2021’s 7.4% drop, overall retention rates continue to decline 3.1% in 2022, per the report. The retention rate for donors acquired in the previous year dropped nearly 15% year over year. Recaptured donors had a similar decrease, while repeat donors — those who gave last year but were not acquired last year — declined 5.4%. Repeat donors also make up about 42% of total donors.

Retention rates were down across all donor levels, though micro donors, the largest segment, drove the downturn with a decrease of 5.6%.

“There will always be ups and downs in the market, which is why resilience is what it’s all about,” Woodrow Rosenbaum, chief data officer at Giving Tuesday, said in a statement. “The decline in donor retention is a wake-up call but also a call to action. We need to focus on effective tools and tactics that will help individual organizations flip this script, so they can build sustainable futures by more effectively attracting and retaining all donors, not only focusing on large donor stewardship. That’s something we should all be focused on in 2023.”

4. 70% of Donors Only Give Once

The importance of stewarding donors to give again and create donor loyalty for your cause can’t be overstated. The report noted that those giving one gift made up nearly 70% of donors and decreased 12.7%. On the other hand, those giving seven or more donations consisted of less than 9.8% of total donors, but had the smallest decrease in number of donors at 1.9%. Other donation frequencies saw similar declines to one-time gifts.

When looking at dollars, one-time donors comprised 58.1% of total dollars and gave slightly more (1.4%) year over year. Other levels saw decreases, around 5% or 6%. And retention rates were down across all giving frequencies, with one-time donors’ 18.6% year-over-year retention rate down 4% — the highest of all giving frequencies.

5. The Number of Organizations Reporting Data Decreased

This report analyzed data from more than 8,000 organizations that raised $6.1 billion from 11.2 million donors through Sept. 30, 2022. Though that is a healthy sample, the number is 10.4% smaller than anticipated. This figure exceeds pre-pandemic rates.

“This is concerning in part because it may signal a lack of adequate resources or closures among organizations, but also because the more data available the more accurate and relevant the insights generated will be,” according to the Fundraising Effectiveness Project’s press release.

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