Report: Charitable Giving Nears Pre-Recession Levels

December 18, 2014       The NonProfit Times      

Charitable giving and donor retention levels increased last year, according to a new report from the Association of Fundraising Professionals (AFP), as they continued to inch near pre-recession rates.

The 2014 Fundraising Effectiveness Project (FEP) Survey Report, developed by AFP and the Urban Institute, revealed that for every $100 a charity gained in 2013, it lost $92 from lapsed donors and smaller gifts from current donors, a gain of $8. This overall gain marks the fourth consecutive year that giving has grown since 2009, the brunt of the recession’s impact on giving. That year, the net giving level was negative $19 — that is, for every $100 a charity gained, it lost $119.

“Results this year indicate that the giving climate continues to improve — good news for charities — but we still have quite a way to go before we reach the high water mark of 2007 and surpass it,” said Elizabeth Boris, director of the Center on Nonprofits and Philanthropy at the Urban Institute. “The trend toward higher net giving is encouraging as the effects of the great recession slowly recede.” 

One area which charities can see some improvement is donor retention. Despite 2013’s net giving increase of $8, nonprofits continued to lose slightly more donors than they gained. For every 100 new and returning donors, 102 departed without a gift, a net loss of two. That figure is still an improvement compared to 2012’s value of negative 5, and from the 2011 level of negative 7, which marked the worst ever reported donor retention loss since the FEP was created in 2004 – which was also the year of the best reported donor retention levels (plus 18).

Overall, the FEP revealed that charities had a 43 percent donor retention rate in 2013.

“Donor retention is one of the most important benchmarks that charitable organizations need to look at when analyzing and working to improve their fundraising effectiveness,” said Andrew Watt, president and CEO of the Association of Fundraising Professionals. “Charities are good at attracting first-time donors, but engaging them and inspiring them to continue to give throughout the years continues to be an issue.”

Other key metrics from the report include:

  • Charities raising $100,000 to $500,000 had a net gain in giving levels of 1.9 percent (an increase of 7 percent from 2012);
  • Organizations from the under $100,000 group had a net loss of -2.4 percent (an increase of 11.1 percent from 2012);
  • In 2012, the difference by organizational size was more pronounced, with organizations raising more than $500,000 seeing an average gain of 16.6 percent in their net giving levels; and,
  • Charities raising $100,000 to $500,000 experienced net losses of 5.1 percent, and nonprofits raising less than $100,000 saw net losses of $13.5 percent.

You can find out more information about the FEP at http://www.afpnet.org/