Mike’s Monday Message: Takeaways from Q1 2024 FEP

Last week, the AFP Foundation for Philanthropy and GivingTuesday released the Q1 2024 Fundraising Effectiveness (FEP) report — a quarterly report tracking giving trends in the U.S.  

For the last year and a half, these reports haven’t provided the best news. Since Q4 of 2022, we’ve seen consistent declines in most of our key metrics, as our industry, and our donors, struggled to find the new normal post-pandemic. 

Though this quarter’s report still highlights some well-known areas of concern, there is one major bright spot — a 4.1% increase in dollars raised. After 5 straight quarters of decline, seeing growth in this metric is certainly cause for cautious optimism. 

Here’s a few things we can do to keep this momentum and address some of the other metrics that are still trending down. 

Continue to Steward Major Donors While Engaging Other Giving Levels
Though we are seeing growth in “dollars raised” this quarter, this growth is driven primarily by large/mega donors. Meanwhile, micro donors ($1-$100), constituting 59% of all donors, showed the biggest relative drop (-10%) in donor numbers in Q1 of 2024, while the other size categories saw more modest decreases ranging from -5% to -0.8%. 

This reliance on major donors is a trend that we saw in 2021 and early 2022, as large donations kept “dollars raised” elevated despite the total number of donors declining. It is when this trend reversed, and there was a decline in gifts from major donors, that we began to experience the dollar declines reported throughout 2023. 

So, it is crucial that we continue to engage this demographic that is driving growth, while keeping in mind that this dependence on major gifts is not sustainable, and recognizing we need to simultaneously be making an effort to engage smaller donors. 

One of the ways that AFP is addressing this issue is through our advocacy efforts. This week is AFP Chapter Lobby Week, a week in which we encourage U.S. chapters to meet with their congresspeople to discuss key issues impacting the nonprofit sector. One of the priorities for these meetings is advocating for passage of the Charitable Act, legislation that would allow Americans who do not itemize their taxes to claim a deduction for their charitable gifts, providing a much-needed giving incentive for small donors. You can help us in these efforts by meeting with your representatives and sharing the impact that an increase in giving would have on your community. 

Promote Monthly Giving 
Donors who gave 7 or more times (see infographic below) represented 6% of total dollars but positively influenced the topline change by 0.2%, demonstrating the increasing importance of frequent donors in overall growth. Monthly giving programs can be an effective way to encourage consistent philanthropy and build lasting relationships with your donors. Here are some resources you can use to enhance or start a monthly giving program at your organization. 

• Complimentary On-Demand Webinar: Spring into Monthly Giving
• Micro-Learning Video: Characteristics of Monthly Donors
• Article: Building a Recurring Giving Program: 4 Steps for Nonprofits

Focus on Relationship Building with New Donors
The new donor retention rate dropped by -7% in Q1 of 2024 (see infographic below). Similarly, only 7% of new donors were retained year-to-date, underscoring the difficulty in keeping first-time contributors engaged. Here are some resources to help you cultivate relationships and address donor churn at your organization. 

• AFP Deep Dive: Make It Meaningful: Creating Donor Experiences that Inspire Generosity and Loyalty
• Article: Donor Retention: How to Sustain Relationships Year After Year
• AFP Deep Dive: Donor Retention: A Self-Assessment Workshop

As always, please feel free to reach out to me with any questions or concerns. You can reach me via email at mike.geiger@afpglobal.org or on X at @AFPMikeGeiger. I’d love to hear from you. 

Mike Geiger, MBA, CPA