Fundraising, Number of Donors Plunging

No matter how you count it, by any metric you use, fundraising and the number of donors plunged during the first six months of 2019 when compared to the same period of 2018. The mystery of the disappearing donor continues.

New donors declined 9.5 percent and new retained donors dropped 8.8 percent during the comparative periods. Overall, the number of donors declined 5.8 percent with a corresponding drop in revenue of 7.3 percent.

A harrowing number is that at mid-year revenue was only 41.06 percent of the total raised during all of 2018 from only 48.97 percent of donors, according to the data.

The recaptured donor category is doing the best with only a 1.1-percent drop year-over-year, perhaps showing that fundraisers are focusing on reactivating rather than acquiring donors.

That is data compiled by the Fundraising Effectiveness Project (FEP) from databases that consist of 4,456 nonprofits where fundraisers brought in a collective $4.76 billion during 2018. Nonprofits included in the quarterly report raised at least $5,000 from 25 or more donors in each of the past six years. The FEP is a project of the Association of Fundraising Professionals (AFP) and the Urban Institute.

Revenue from gifts of $1,000 or more are down 8.2 percent while mid-range gifts, from $250 to $999, have fallen 3.5 percent, the data shows.

“What’s so alarming is that this trend has continued now for several years, and in fact has gotten worse and worse every year,” said Erik J. Daubert, ACFRE, chair of the Growth in Giving Initiative/Fundraising Effectiveness Project Work Group. “To borrow a sports analogy, we’re moving the goalposts farther back each year, and charities are having to depend significantly more on major gifts at the end of the year to cross the goal line.”

That worked in 2017 when there was an extraordinary level of major gifts during the fourth quarter, likely due to the comprehensive tax law changes. But last year, major gifts never came close to that level, leading to flat giving totals.

“We are not saying that the sky is falling, but reliance on year-end major gifts may be unsustainable,” said Jay Love, chief relationship officer and co-founder at Bloomerang, one of the three data providers for the Growth in Giving Database. The other data providers are DonorPerfect and NEONCRM. “It may not be a perfect storm for giving, but with a global trade war, fluctuating stock market and lagging economy, it certainly could be a very bad storm,” he said.

Major donors whipped out their checkbooks at the end of 2018, erasing much but not all of the declines during that year. That might not be the case this time. The data shows that major donors made up 33.6 percent of all donors during the first six months compared to 34.78 percent at the same period of 2018. That’s also down from 2017 when they comprised 35.4 percent of those giving to nonprofits but better than the 32.42 percent during 2016.

By this time in 2018, major gifts made up 37.89 percent of the category’s eventual annual total. This year it is just 34.78 percent of the 2018 total.

Here’s how the FEP defines donors:

  • Repeat Retention Rate YTD: How many donors who gave in the full prior year, excluding new donors and have given this year to date divided by the number of donors who gave in the full prior year, excluding new donors;
  • New Donor Retention Rate YTD: How many donors whose first gift was last year and have given this year to date divided by the number of donors whose first gift was last year; and,
  • Recapture Rate YTD: The percent of previously lapsed donors who have given a gift from the beginning of the year through the date noted on the top of the report.

To see all of the data, go to www.afpfep.org