Donors Drop by 7% but Dollars Up 6.2%, Buoyed by Major Donors

Donors Drop by 7% but Dollars Up 6.2%, Buoyed by Major Donors

U.S. charitable giving increased significantly in Q2 2022, but gains were accompanied by a continuing steep decline in donor acquisition and retention, particularly among new and newly retained donors, according to the Fundraising Effectiveness Project’s (FEP) Second Quarter Fundraising Report.

The Fundraising Effectiveness Project (FEP) is a collaboration among fundraising data providers, researchers, analysts, associations, and consultants to empower the sector to track and evaluate trends in giving. The project offers one of the only views of the current year’s fundraising data in aggregate to provide the most recent trends for guiding nonprofit fundraising and donor engagement. The FEP releases quarterly findings on those giving trends, released both via downloadable reports at https://afpglobal.org/fepreports and in a free online dashboard.

FEP Q2 2022 Report Key Takeaways

• Q2 giving data shows donor counts down steeply, driven by declines in small (sub $500) donor segments, as well as in new donor acquisition and retention. On the other hand, recaptured donors and newly retained donors, which had both dropped in Q1, rose moderately and stabilized in Q2.
   
• At the same time, dollars are up, largely due to increased giving by major donors, although this increase of 6.2% (estimated for late data) is nonetheless lower than the Q2 inflation rate of approximately 8.5%
   
• Despite decreasing overall donor counts, fundraising is up thanks to increasing recapture rates (people who donated sometime in the past, but not last year). That segment may include COVID donors being recaptured or the return of pre-COVID donors who paused their giving during the pandemic.
   

With new and newly retained donor counts dropping steeply for the 4th consecutive quarter, along with the high organizational dropout rate during this same period, the COVID era in the charitable giving sector continues to unfold in complex and challenging ways.

“It is clear that donor retention is a major challenge for fundraisers across the sector,” says Tim Sarrantonio, Director of Corporate Brand for Neon One. “The universality of the pandemic crisis led to the emergence of many new donors, especially in the smaller donor segments. However with a 7.4% drop in retention last year followed by a further drop of 5.2% through Q2 2022, the need for more effective retention tactics is becoming more and more obvious."

“With so much volatility in donor acquisition and retention now would be an excellent time to invest in broad grassroots engagement,” according to Woodrow Rosenbaum, Chief Data Officer at Giving Tuesday. “This is an important way to create resilience within the sector—and within individual organizations—in order to weather economic storms.”

“The increase in fundraising dollars can be largely attributed to recaptured donors—those who contributed again after not doing so last year,” Lori Gusdorf, CAE, Executive Vice President of the  AFP Foundation for Philanthropy, explains. “This underlines the importance of employing targeted strategies for retaining this key donor segment, especially in times of economic volatility, when donors are more frequently evaluating their financial commitments. Organizations could reap considerable benefits by ensuring they stay relevant for this group through consistent solicitation and outreach activities.”

The release of the FEP Q2 Report coincides with the release of a new filtering tool on the FEP Dashboard. Users may now find top level percentage changes in dollars, donors, and retention by cycling through organizational categories (e.g. Religion, Health, Education, Human Services, Foreign Affairs, etc.). The FEP Dashboard continues to evolve, with new features being added regularly to enhance searchability and usefulness.

The Fundraising Effectiveness Project 
 
The Fundraising Effectiveness Project publishes quarterly and annual reports that examine key fundraising metrics, serving as a benchmark for nonprofit executives, development staff and researchers. The Fundraising Effectiveness Project and the Growth in Giving database are both administered by the Association of Fundraising Professionals Foundation for Philanthropy and The GivingTuesday Data Commons.

The Growth in Giving database is the world’s largest public record of donation activity, with more than 204 million donation transactions, and is continuously updated by leading fundraising software thought leaders (in alphabetical order) Bloomerang, DonorPerfect, Keela, and NeonCRM. Additional partners include the 7th Day Adventists, The Biedermann Group, DataLake Nonprofit Research, and DonorTrends (a division of EveryAction). For more information and how you or your fundraising software provider can participate, please visit https://afpglobal.org/fep.