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Same Old Story: Donors Down, Revenue Up

The number of donors to nonprofits dropped 7% through the second quarter of this year compared to 2021, fueled by a near catastrophic drop in the number of donors who gave $500 or less.

Data from the Fundraising Effectiveness Project (FEP) showed that the number of micro donors, those who gave $100 or less and represent 57.1% of all donors, plummeted 17.4% year-over-year. Those who gave between $101 and $500 dropped 8%, roughly 28.8% of all donors.

Of the five donor categories tracked by the FEP, only the “supersize” silo didn’t decline, remaining flat. Those donors represent 0.3% of all donors. Fundraising is estimated to have increased 6.2% year-over-year. The estimate accounts for the roughly 9% of Q2 fundraising data that arrives up to a year late.

FEP is a collaboration among fundraising data providers, researchers, analysts to track and evaluate giving trends. The FEP releases quarterly findings on those giving trends, via downloadable reports at afpfep.org and in an online dashboard. The data is limited to organizations with at least three years of data, with limited growth/loss constraints. It is weighted across size and the National Taxonomy of Exempt Entities (NTEE) for organizations raising between $5,000 K and $25 million.

The data also shows:

  • Recaptured donors and newly retained donors, which had both dropped in Q1, rose moderately and stabilized in Q2;
  • Dollars are up, largely due to increased giving by major donors, although this increase of 6.2% (estimated for late data) is lower than the Q2 inflation rate of approximately 8.5%; and,
  • Despite decreasing overall donor counts, fundraising is up due to increasing recapture rates (people who donated sometime in the past, but not last year). That segment may include COVID donors being recaptured or the return of pre-COVID donors who paused their giving during the pandemic, according to the report’s authors.

With new and newly retained donor counts dropping steeply for the fourth consecutive quarter, along with the high organizational dropout rate during this same period, the COVID era in the charitable giving sector continues to unfold in complex and challenging ways, according to the report’s authors.  

The donor retention is expected to decrease 4.2% year-over year, following last year’s 7.4% decrease. The year-to-date retention of donors from last year stood at 15.8% during Q2.

A 7.4% drop in retention last year followed by a further drop of 5.2% through Q2 2022, “with so much volatility in donor acquisition and retention now would be an excellent time to invest in broad grassroots engagement,” Woodrow Rosenbaum, Chief Data Officer at GivingTuesday said via a statement. “This is an important way to create resilience within the sector — and within individual organizations – in order to weather economic storms.”

Organization size factored much more significantly into fundraising than last year and cause mattered much less in determining fundraising amounts. Religious organizations raised 10% more during the period, compared to last year and environment and animals up just 1.4%. International and foreign affairs dropped 17.1%, health was down 7.7% and human services dropped 6.1%.

The increase overall in fundraising dollars can be largely attributed to recaptured donors those who contributed again after not doing so last year, according to Lori Gusdorf, CAE, executive vice president of the AFP Foundation for Philanthropy. “This underlines the importance of employing targeted strategies for retaining this key donor segment, especially in times of economic volatility, when donors are more frequently evaluating their financial commitments.