Unless you’ve been burying your head in the ground and trying to ignore it, you’re probably aware fundraisers are having a tough time right now. But hiding from bad news doesn’t make it go away.
And you’re doing your organization more harm than good if you ignore the latest trends and continue with business as usual. The fundraising landscape is always evolving. And you can’t expect to keep doing the same things, day after day, and raise more money.
The world will grow around you and leave you behind faster than you think!
The Fundraising Effectiveness Project recently released its 2022 annual report, showing that donors, dollars, and retention rates are down for nonprofits of all sizes and industries.
This shouldn’t be a surprise if you’ve worked in nonprofit development for the past few years. However, it may bring you some comfort to learn that you’re not alone if your numbers are down.
And remember, challenges are an opportunity for growth. So now is the time to accept our current reality, connect with other fundraising professionals, and try something different.
Fewer donors gave last year.
The number of donors fell 10 percent, marking the second consecutive year with significantly decreased donor participation. Many donors who gave for the first time in 2021 did not return in 2022.
- Micro donors (less than $100) are down 14.9 percent.
- Small donors (between $101 and $500) are down 8.4 percent.
- Midsize donors (between $501 and $5,000) are down 5.2 percent.
- Major donors (between $5,001 and $50,000) are down 3.1 percent.
- Supersize donors (more than $50,000) are down 2.1 percent.
And it’s not surprising that the donors who give more and have a more established relationship with a nonprofit are likelier to stick around. After all, donors who give at a high level typically earn more and can withstand inflation’s impact while sustaining their support.
But seeing such a sharp decline in donors overall is concerning, especially at the micro level. In fact, 90 percent of the overall decrease in donors can be attributed to this group, which makes up 83.1 percent of all donors.
Nonprofits raised less money.
Fundraising dollars were down 1.7 percent in 2022 compared to 2021. But what’s surprising is that giving declined from November to December, in direct contrast with previous years.
And as another first, the report indicates that dollars raised by major and supersize donors fell by 3.6 percent and 4.6 percent, respectively, in 2022. And this is a cause for concern. These two groups account for 74.3 percent of the total dollars raised.
Micro donors who give less than $500 had the largest decrease from 2021 to 2022 once again at 13.3 percent. But these donors are only responsible for 2.7 percent of the total dollars raised!
However, organizing donors by their current status instead of giving level reveals that one group increased their giving in 2022. Recaptured donors raised 2.8 percent more in 2022 than in 2021, accounting for 12.6 percent of total dollars raised.
And new retained donors gave 21.8 percent less year over year, the biggest decrease among any donor group. So, recapturing lapsed donors and retaining current ones should be a priority for nonprofits that want to boost their fundraising.
READ MORE: What do at-risk donors want to hear?
Fundraisers struggled with donor retention.
Improving donor retention feels like it’s been a hot topic for nonprofit professionals forever. And with good reason! Fundraisers everywhere know they can spend less to raise more by improving retention.
But rates still fall year after year, and 2022 was no exception. The Fundraising Effectiveness Project estimates that retention declined by 3.5 percent between 2021 and 2022 to 42.6 percent overall.
However, there is a silver lining! Repeat donors were retained at a much higher rate than new donors and recaptured donors.
The repeat donor retention rate was 58.1 percent in 2022, which is down 5.2 percent year over year. But the new and recaptured donor retention rates fell 16.9 percent and 15.2 percent, respectively, from year to year.
So, fundraisers will want to focus on securing that second gift and moving donors into that repeat category where they will most likely be retained as soon as possible.
Where do you stand?
So, how do your numbers compare with the industry benchmarks set in the Fundraising Effectiveness Project’s 2022 report? Are there any areas where you’re significantly ahead of or behind other organizations? Or is this data eerily similar to yours?
Either way, it’s time to take action and rise to the challenge. You can’t keep raising money the same way, day after day and year after year, and expect to improve your results. In fact, you can’t even hope to stay where you’re at if you don’t adjust in the face of the adversity facing our industry.
It’s time to face the facts. Dollars, donors, and retention rates are down. And while you could blame your lack of success on “the way it is right now,” other nonprofits are innovating and looking for ways to reverse the trends and advance their missions.
The choice is yours. Will you sit back and help create your recession? Or will you find a way to rise above it?