The fundraising knowledge by way of September of this 12 months reveals that nonprofits proceed to lift extra {dollars} from fewer donors. Particularly, the variety of {dollars} donated 12 months over 12 months by way of the third quarter grew barely, however the variety of donors remains to be lagging behind, with sharp drops within the variety of small-dollar donors. Moreover, donor retention continues its four-year decline.
The Fundraising Effectiveness Undertaking (FEP) releases quarterly studies from knowledge collected from 10 suppliers, with knowledge evaluation and extra help from Bonterra. The newest report consists of 4.4 million donors who gave $6.4 billion to greater than 12,000 organizations that raised between $5,000 and $25 million.
“I hope that, as a growth skilled, you look ahead to the quarterly outcomes and use them to measure your progress, discover inspiration and enhance your efforts to draw new donors, retain present ones and strengthen your fundraising outcomes,” Lori Gusdorf, govt vp of the AFP Basis for Philanthropy, mentioned in an announcement. “Analysis empowers us to do higher, and this FEP knowledge needs to be one of many go-to sources you incorporate into your technique to realize this success.”
Whereas the variety of donors dropped 5.3% year-over-year by way of the third quarter, {dollars} raised in the identical timeframe grew solely 0.9% — slowing the expansion in {dollars} earlier within the 12 months. The steep decline in donors within the third quarter is just not new. The time main as much as year-end giving final 12 months noticed an analogous dip earlier than drastically bettering — whereas remaining detrimental — within the fourth quarter.
Per years previous, donors declined within the third quarter. | Credit score: Quarterly Fundraising Report: Q3 2024 by Fundraising Effectiveness Undertaking
Listed here are three areas the place nonprofits should focus in 2025, based mostly on the newest FEP knowledge.
1. Prioritize Small-Greenback Donor Acquisition
Because the economic system recovers, bigger donors might rebound extra shortly, however concentrating on smaller donors is a crucial tactic to maintain your fundraising program well-rounded. Researchers inspired nonprofits to enhance small-donor acquisition of their fundraising methods.
The information reveals that small-dollar donors, who skilled a 12.4% year-over-year drop by way of the third quarter, are one of many predominant drivers of the general dip. Accounting for greater than half of whole donors, these gifting $100 or much less are accountable for two-thirds of the loss in donors within the third quarter. Donors who gave extra additionally skilled declines, however their year-over-year losses had been a lot decrease.
Micro donors — these gifting $100 or much less — skilled a 12.4% year-over-year drop by way of the third quarter. | Credit score: Quarterly Fundraising Report: Q3 2024 by Fundraising Effectiveness Undertaking
Equally, although the small-dollar donor solely contributes 1.8% of whole {dollars}, these donors decreased their whole giving by 12.6% — the biggest drop for any measurement donor.
When it got here to a donor’s life cycle, all segments had been down. Intently mirroring 2023 by way of the third quarter, the numbers for donors acquired this 12 months and people acquired final 12 months that had been retained confirmed the biggest declines. Nevertheless, on the identical time final 12 months, the drops had been a lot deeper, which is encouraging, in line with the report. On the financial facet, these donors additionally noticed the largest declines.
New donors had a 11.5% year-over-year drop. Since they comprise 37.5% of donors, the loss in acquisition is the opposite massive contributor to the decline in small-dollar donors.
2. Enhance Retention Throughout All Donor Segments
Although simpler mentioned than carried out, nonprofits ought to concentrate on donor retention within the new 12 months.
Donor retention dropped 4.6% by way of the third quarter, with the bottom level (5.6%) occurring in September. This 12 months marks the fourth straight 12 months that retention has decreased within the third quarter. Nevertheless, the third quarter of 2024 additionally marks a reversal, as third-quarter retention price reductions had been changing into much less extreme till this 12 months. Researchers attributed this to a problem in re-engaging donors within the third quarter.
Donor retention charges point out that nonprofits had issue re-engaging donors within the third quarter this 12 months. | Credit score: Quarterly Fundraising Report: Q3 2024 by Fundraising Effectiveness Undertaking
Donors who had been retained for 2 or extra years had the bottom year-over-year lower, with a 7.8% drop. Nevertheless, they make up 40.1% of the donor base, in order that small dip had a big effect, accounting for one-third of the donor decline. The drop in {dollars} given by repeat retained donors additionally had the smallest discount — tied at a 4.9% drop with recaptured donors — however repeat retained donors alone had been accountable for greater than half of the entire decline in {dollars} raised. This group’s retention price additionally declined 4.6%, whereas new donors’ retention price fell 9%.
Whereas greater than half of donors giving greater than $5,000 have been retained, nonprofits have struggled to retain donors who give much less, with retention charges dropping 6% to 7% relying on the reward measurement.
3. Encourage First-Time Donors to Change into Sustainers
The significance of touchdown a second reward holds true, as one-time donors had a 18.6% retention price. Nevertheless, that price jumped to 38.1% with two presents, 61.2% with three to 6 presents and 84.3% with seven or extra presents.
For the reason that second quarter, nonprofits slowed the year-over-year churn on sustainers making seven or extra presents. These loyal donors’ year-over-year dip rose 8.2 share factors, however stays at a 6.2% year-over-year decline. In the identical timeframe, this group grew from 3% to 10.9% of whole donors.
On the alternative finish of reward frequency, the variety of one-time donors declined 10.4%. Per the second-quarter comparability, one-time donors had been accountable for 75% of the general donor discount 12 months over 12 months for the third quarter.
The variety of one-time donors declined 10.4% 12 months over 12 months. | Credit score: Quarterly Fundraising Report: Q3 2024 by Fundraising Effectiveness Undertaking
Nevertheless, on the subject of the {dollars} sustainers give, researchers suspect there may be better stability attributable to smaller declines than seen for {dollars} given by one-time donors, who contribute virtually half of whole {dollars} raised and had a 6.2% year-over-year drop.
“The continued decline in donor numbers and retention indicators an pressing want for strategic recalibration,” Woodrow Rosenbaum, chief knowledge officer of GivingTuesday, mentioned in an announcement. “Our Q3 FEP knowledge underscores the vital significance of partaking and retaining small donors, who kind the spine of sustainable giving. Specializing in progressive methods to activate new donors and deepen present relationships shall be pivotal in addressing these challenges and fostering a stronger, extra resilient sector in 2025.”
