Number of donors, retention rates and smaller gifts all decreased.
Giving increased by 1.6% in 2018, according to the Fundraising Effectiveness Project’s 2018 Fourth Quarter Report, with philanthropic gains being driven exclusively by donors who gave $1,000 or more.
After a sluggish first half of the year, charitable giving rebounded in the third and fourth quarters of 2018 to end with an overall increase. However, the increase was smaller than in 2017 (when giving increased by 2.0%) with other key giving indicators continuing to fall.
While total giving from gifts of $1,000 or more increased by 2.6%, revenue from smaller gifts decreased. Gifts in the $250 - $999 range dropped by 4.0%, while gifts of under $250 dropped by 4.4%. The number of donors also fell, as did retention rates (the percentage of donors who continue to give to the same organization).
“The headline may show an increase in giving, but that increase masks some serious long-term trends that are presenting huge challenges to the sustainability of fundraising and philanthropy,” said Elizabeth Boris, chair of the Growth in Giving Initiative. “Giving is increasing because of larger gifts from richer donors. Smaller and mid-level donors are slowly but surely disappearing—across the board, among all organizations. Philanthropy should not and cannot be just the domain of the wealthy, and the entire sector needs to look at how we reach out to and engage these donors.”
The Disappearing Donors
The total number of donors dropped by 4.5% from 2018 to 2017. In that total are the following groups:
- New donors to an organization, which dropped by 7.3% from 2017;
- Newly retained donors, those who have given a second time to an organization, which dropped by 14.9%;
- Recaptured donors, those who stopped giving to an organization but returned and gave again to the same organization in 2018, which dropped 1.6%; and
- Repeat retained donors, who have been giving to the same organization for at least three years, which increased by 0.2%.
The overall retention rate—the percentage of all donors making a gift to the same organization in 2017 and then again in 2018—dropped almost two percentage points to 45.5% from the 2017 rate. The repeat retention rate (the percentage of repeat donors who gave in 2017 and then again in 2018) remained fairly steady at 61%, while the new donor retention rate (donors who gave in 2017 for the first time and gave again in 2018) fell four percentage points to 20.2%.
“What’s concerning about this data are the significant decreases in the New and Newly Retained Donor Groups,” said Ben Miller, chief analytic officer at DonorTrends, which created the final report. “From past reports, we’ve seen that charities seemed to do well at acquiring new donors but retaining them was a challenge. Now we’re seeing difficulties in acquiring donors, and that could spell real trouble with fewer donors giving. Again, it’s great to see giving increasing overall, but the question remains around the long-term sustainability of the sector if these trends continue.”
“These are overall numbers for the entire sector, and despite all the challenges, giving did increase,” said Jon Biedermann, vice president at DonorPerfect, the final data provider. “What’s most important are the decisions your organization makes, its giving and fundraising strategy, and its willingness to focus on donor cultivation and stewardship." Biedermann added, “None of this research would have been possible without the fantastic collaboration of my industry colleagues, who are also my competitors. We invite other industry colleagues to join our efforts so that we can all work together to reverse these alarming trends."
Data from the FEP’s 2018 Fourth Quarter Report is based on a panel of more than 4,500 charities selected from the Growth in Giving Database of 161 million individual transactions, which includes more than $72 billion in donations and 18,348 organizations since 2005. Organizations included in the panel have raised $5,000 or more from 25 or more donors in each of the last six years. Revenue figures have been adjusted for inflation.
For more information on the 2018 Fourth Quarter Report, and to download the Report and learn about other free FEP tools to help measure fundraising effectiveness, please visit www.afpfep.org.
2 thoughts on “Total giving increased slightly in 2018, but only due to larger gifts”
Thanks for catching that, Peter.
The link at the end seems to have been cut off. Can you update the story to correct this?