And the Trend Continues….More Dollars, Fewer Donors

The numbers indicate a continuation of the last 15 years. Dollars are up for philanthropy, but donors are down or decreasing.

As part of a midway check through 2022, the Fundraising Effectiveness Project released a study that indicates that donors under $100 dropped thus far this year by nearly 18%. And those who give between $100 and $500 dropped 8%. In addition, retention rates are dropping in donors under $500 as well as they decrease in repetitive same year giving. Also, the recapturing of former donors is diminishing, particularly those under $500 levels annually.

At the same time, overall philanthropy numbers seem to indicate potential growth in overall fundraising dollars through Q2 of 2022.  Most experts indicate that the reason overall philanthropy is up is because of major gifts, principal gifts, and mega gifts being given to nonprofits.

What does this mean? I think over the next five years, our industry is ripe for a massive change in the way we look at annual giving: those donors who give below $500 or $1000 each year.  It's getting harder and harder to identify them and more and more expensive through the mail to attract them as well as communicate with them.  The manner in which we solicit annual fund level donors doesn't make financial sense. The move to nearly an all-digital platform maybe in the works. It's much more cost effective to communicate via electronic means, e-mail and online, than it is to print and mail out mailers. In addition, the staffing model of annual giving may change as it may not be worth the return on investment if the number of donors and dollars coming in below $500 or $1000 continues to decrease. It would be a dramatic shift.

We will have to become more flexible in the way we look at this. It can't be status quo. And it may mean hard decisions for both professionals and donors who are used to one way of business when the future may require a completely different model of giving and donor acquisition below $1000.