The charitable sector shook itself out of its rut in 2017, with year-over-year giving increasing by 4.1 percent as compared to the 1-percent growth experienced during 2016. The 4.1-percent increase among American organizations outpaced growth in Canada (1.5 percent) and the United Kingdom (2.9 percent), according to the Blackbaud Institute’s 2017 Charitable Giving Report.
The report compared giving rates to Blackbaud clients over a 24-month span, tracking more than $29.7 billion in 2017 revenue.
The giving spike played out fairly evenly across organizations of different sizes. Nonprofits with more than $10 million in annual revenue saw the largest uptick at 4.3 percent followed by small nonprofits with less than $1 million in revenue at 4.2 percent. Medium-sized organizations, those with between $1 million and $10 million in revenue, saw increases of 3.9 percent.
Steven R. MacLaughlin, vice president, data and analytics for Blackbaud and senior advisor for the Blackbaud Institute for Philanthropic Impact, attributed the sector’s ability in breaking through recent stagnation to a number of factors. The past year has been marked with by a strong economy, climbing stock market, spikes in giving to progressive causes, and a large number of natural disasters that rallied donors to action.
Year-end tax reform likely had very little to do with 2017 performance, however, MacLaughlin said. The changes happened too late in the year and likely won’t show their effects on charitable giving until the end of 2018, at the earliest. This year will be one of cautious optimism, MacLaughlin said. On one hand, nonprofits are benefitting from 2017’s positive momentum swing. On the other, fundraisers will need to keep that momentum going, hopefully, without revenue dollars coming in from a myriad of natural disasters.
MacLaughlin noted a 12.1 percent increase in online giving, up from 2016’s 7.6-percent increase, and the steady climb of mobile giving as a part of online giving — from 9 percent in 2014 to 14 percent in 2015 to 17 percent in 2016 to 21 percent in 2017. Fundraisers have been twiddling their thumbs waiting for a watershed moment in online giving and one might be boiling up among small organizations. Nonprofits with less than $1 million in revenue drew 13.9 percent of revenue from online, well ahead of medium-sized (7.7 percent) and large groups (5.6 percent).
Small nonprofits’ strong online performance makes sense, MacLaughlin said, as such organizations tend to have less diverse fundraising plans. The fact that small groups’ online revenue portion exceeds retail’s 9 percent online rate also might signal a turning point for online fundraising in general, he said, especially considering the 7.6-percent overall share of online to overall giving is an all-time high. Slow moves of the needle to more online giving will necessitate fundraising efforts that steward and engage online donors through diverse means just as if they were any other type of donor, MacLaughlin opined.
“Donors don’t self-identify [as online or offline]. It’s a channel, yet a lot of fundraisers treat donors differently by the channel they are acquired through,” he said. “Don’t confuse channel of engagement with channel of interaction . . . We often confuse engagement and transaction as the same thing.”
Small- and medium-sized organizations also made strides on #GivingTuesday, per the report. In 2012, a whopping 80 percent of #GivingTuesday dollars went to organizations with more than $10 million in revenue. That share dropped to 57 percent in 2017. Small organizations’ share in #GivingTuesday increased from 5 percent to 7 percent during the span, but medium-sized nonprofits soared up from 15 percent to 36 percent.
In addition to overall increases in overall and online giving, this year’s Charitable Giving Report included developments such as:
* The first-year retention rate stood at 31 percent for offline donors and 25 percent for online donors. For multi-year donors, the breakdown is 61 percent retention for offline and 64 percent for online. The breakdown might inspire some organizations to try to onboard offline and switch over to online, but donors do not behave that way in practice, MacLaughlin said;
* International affairs organizations saw the biggest leap in giving, increasing by 19.2 percent in 2017. Environmental (7.9 percent), medical research (4.9 percent), and faith-based (4.7 percent) nonprofits followed. K-12 education (1 percent) and arts and culture (0.1 percent) were the two subsectors to see losses in 2017;
* The median donation amount over $1,000 was $2,000 while the median donation amount under $1,000 was $20. The average online gift was $132;
* Three subsectors — medical research (11.9 percent), public-society benefit (11.8 percent), and international affairs (11.8 percent) — relied on online donations for double-digit portions of revenue. Human services (6.5 percent), higher education (7.3 percent), and faith-based (7.3 percent) nonprofits all fell below the sector average; and,
* Not surprisingly, December was the biggest giving month of the year, accounting for 18.2 percent of gifts, followed by June (8.9 percent), September (8.3 percent), and October (8.2 percent). February was the slowest month at 5.9 percent with April (6.3 percent) and July (6.8 percent) trailing close behind.