Charitable giving increased by 2.7% in the fourth quarter of 2021 thanks to first-time donors in 2020 who continued to support those organizations in 2021.

The Fundraising Effectiveness Project (FEP), a collaboration among fundraising providers, researchers, analysts, associations and consultants, released its Fourth Quarter Fundraising Report via the Association of Fundraising Professionals (AFP) at www.afpfep.org. A free, online dashboard is also available at http://data.givingtuesday.org/fep-report

New donors who gave to charity for the first time in 2020 and gave again to the same charity in 2021 increased by 26%. The number of donors declined by 5.7% primarily due to charities having challenges in finding new donors and inspiring “lapsed” donors — those who have given in one year but haven’t given since — to give again.

Major donors ($5,000 to $50,000) were the only category of donors to increase, at 1.9% year-over-year, and comprised 2.2% of total donors. The largest proportion of donors, at 55.6%, micro-donors (less than $100) declined by 9%, and small donors ($101 to $500) declined by 6.8% while comprising 28.5% of all donors.

Retention was lower with the least active donors while large and highly committed donors are sticking around as small, infrequent, and new donors are being left behind, according to the report.

Last year’s giving was never going to approach the incredible growth in the first year of the pandemic in 2021, when overall giving was up 10.6% and donors increased 7.3%, according to Mike Geiger, MBA, CPA, president and CEO of Arlington, Va.-based AFP. “What we’re seeing is a large increase in retained donors – those who gave to a particular organization for the first time in 2020 and then continued giving to that organization in 2021 – which might indicate that donors who supported pandemic-related causes in 2020 kept doing that in 2021,” he said via a statement. 

That the overall number of donors declined in 2021, newly acquired donors in particular, might be a sign that people were uneasy about their economic situation with the ongoing pandemic, Geiger argued.

Since 2020 was an outlier with the pandemic, a comparison between 2019 and 2021 shows that overall giving increased by 11% and overall donors declined by less than 1%. “These last two years have been particularly volatile in the philanthropic sector and we can be grateful that fundraising dollars continued to rise throughout that volatility,” Woodrow Rosenbaum, chief data office for GivingTuesday.

Rosenbaum advocates that it’s still possible to motivate people to give, but it requires investments in engaging donors to keep them involved, pointing to GivingTuesday, which saw an increase of 6% in donors despite a decline in donors overall in 2021, but especially smaller-gift donors.

“The big takeaway from this report is that we have a huge opportunity with donors acquired during 2020 who are continuing support and are ready to give,” said Doug Schoenberg, CEO for DonorPerfect Fundraising Software. “Nonprofits need to harness that energy, communicate effectively with those donors, and invite them to be part of the community. At the same time, we’ll need to double-down on donors who may have drifted away and give them compelling reasons to come back and participate in giving,” he said via a statement.

The data analysis includes giving details from 9,618 nonprofits based in the United States, as a subset of the FEP. The database of organizations is made up of those that raise between $5,000 and $25 million. In 2021, the FEP implemented several changes to its methodology to better represent the “typical” experience of nonprofits and “granular trends in donation patterns.”

The FEP and the Growth in Giving database are both administered by the AFP 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”: 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, visit www.afpfep.org