The familiar story of charities raising more dollars from a smaller number of donors continued in the third quarter of the year, according to new data from the Fundraising Effectiveness Project, a research collaborative that examines trends in giving.
Released Thursday, the FEP report found that the amount donors gave increased slightly, almost 1 percent, while the number of donors declined 5.3 percent, compared to the same period in 2023.
“This is largely driven by the ways in which nonprofits are choosing to engage,” says Woodrow Rosenbaum, chief data officer for GivingTuesday, which partners with the Association of Fundraising Professionals Foundation for Philanthropy to put out the report. “I am concerned about the continued decrease in the size of the donor pool, particularly losses in the grassroots giver communities. That’s not sustainable long term, and we have to turn it around”
The report noted that participation by those giving $100 or less declined by 12.6 percent, and those giving $101 to $500 dropped by 7.9 percent. Even the number of the largest donors, those giving $50,000 or more, decreased 5.5 percent. Rosenbaum attributes the donor declines to nonprofits’ failing to engage with donors on a consistent basis. A different GivingTuesday poll shows that engagement with donors ticked up in the latter half of the third quarter, Rosenbuam says. He thinks that engagement led to strong GivingTuesday results this year, where nonprofits raised $3.6 billion, a 16 percent increase over last year.
“Hopefully, that means we’ll have a better fourth quarter,” Rosenbaum says. “It’s also a question of, with so much effort in the sector that is concentrated in the fourth quarter that we’re seeing this downturn in the third. It might be organizations waiting to engage existing donors in giving season instead of being more present more often.”
In addition to a decrease in the total number of donors, donor retention is also down 4.6 percent year over year, the report found. Rosenbaum says it’s important to engage with donors on a regular basis, and not just ask for money — but seek their input in a variety of activities. “They want to feel like they’re partners in your mission, not your wallet.”
Other Stats From the Third Quarter
- Education saw 2.7 percent year-over-year growth in the third quarter. However, the report notes this growth was driven by a few educational organizations, and overall, there was a median decline of 2.2 percent. The amount donors gave to the arts and humanities fell. The overall decline of 15.8 percent was driven by some large groups with particularly bad quarters, but overall, the cause area had a median fundraising decline of 2.5 percent.
- Donor retention at every giving level fell. The retention rate for people who gave $100 or less was down 6.4 percent, while retention for contributors who gave $101 to $500 fell 7 percent. The retention rate for donors who gave the largest sums, more than $50,000, fell by 4.9 percent.
- Nonprofits that raised less than $100,000, and between $250,000 and $500,000 saw their year-over-year fundraising for the third quarter increase by 21.3 percent and 2.8 percent respectively. Fundraising totals fell in the third quarter for all other organizations.
