It was the same story, different day, for fundraising during the first quarter of 2024. Giving was up (4.1%) compared to the first quarter of 2023, but the number of donors and retention both declined again, 1.3% and 3% respectively.

Micro donors, those who give $100 or less and make up 59.3% of all donors, had the sharpest decline at 10.4%. That is twice the percentage decline of the next largest group, donors who give $101 to $500, which was 5.2% and making up 28.1% of all donors.

The drop in micro donors accounts for nearly three-quarters of the topline decrease in donors.

Those are some of the numbers reported today by the Fundraising Effectiveness Project (FEP) and presented by the Foundation for Philanthropy at the Association of Fundraising Professionals and by GivingTuesday. The data comes from and the project is supported by nine constituent relationship management (CRM) platforms.

Data is limited to organizations with three or more years of data, with $5,000 to $25 million received in the prior year via the Growth in Giving database. Data is weighted across size of organization as determined by amount fundraised. Participating organization can fluctuate from year to year.

Political and election fundraising is not one of the cause areas that is tracked, and political and election fundraising might sneak in, but FEP is not going to specifically capture it.

“There appear to be two diverging trends: We are losing broad support from a large number of small-dollar donors, while the international and foreign affairs segment is gaining ground with these very same donors,” Ben Miller, chair of the FEP, and senior vice president of Data Science at Bonterra said via a statement. “This indicates that the numbers do not reflect a decline in donor generosity, but rather a need for our sector to adapt and figure out new ways to unlock that generosity more effectively.”

There was a significant decline in new and new retained donors (10.3% and 12.1% year-over-year respectively). Researchers suggested it shows continued challenges in acquiring and maintaining growth in first-time contributors. Repeat retained donors, constituting 50.4% of all donors, had a 6.5% decline, contributing to nearly 40% of the topline decrease in total donors. Report authors said this indicates a need to enhance ongoing engagement with regular supporters.

While initial results showed a 3.9% decrease in fundraising dollars, after adjusting for delays in data reporting researchers estimate fundraising dollars to have increase 4.1% compared to last year. This estimated increase in fundraising dollars indicates a potential reversal of the downward trend that began in 2020. Breaking from the previous two years, fundraising dollars had a slow start at the beginning of the year, while picking up momentum in February and March.

Despite the negative trend, dollar amounts have stabilized compared to 2023, with dollars donated by new donors decreasing by only 1.9% during the first quarter of 2024 compared to 34.4% in the same quarter last year. Donors who give seven or more times represent 6.3% of total dollars but positively influence the topline change in dollars by just 0.2%, demonstrating the increasing importance of frequent donors in overall growth.

According to Woodrow Rosenbaum, chief data officer of GivingTuesday, “each donor is only counted as a unique donor per recipient organization. If one individual donates to two separate organizations, the donor will be counted twice. We recognize this as a limitation of our data and methodology, but do not think it happens at a broad enough scale to affect trends.”

Unlike the two years prior where retention rates start high in January and taper off, donor retention in the first quarter of 2024 has been relatively stable and hovers around negative 3%. The good news there is that supersize donors – those who gave at least $50,000, experienced the smallest drop in retention rate, while the largest decrease in retention was concentrated among small, midsize and major donors.

“While stabilizing metrics provide us with subtle reasons for optimism, we are still seeing persistent variability in donor engagement that is indicative of need for adapted fundraising strategies” according to Woodrow Rosenbaum, chief data officer of GivingTuesday. “Our Q1 FEP data shows that significant challenges still remain for potential recovery in the sector. Developing tactics to encourage donor retention and broader solicitation will be essential in 2024.”

Rosenbaum told The NonProfit Times, “We admit that at this point, future data will tell more of the story about how durable this trend is. We think that the magnitude of the shift shows reasons for optimism, especially given the rapid declines we were observing in previous quarters.”

Rosenbaum said: “Unless we see broader engagement of different people by the nonprofit sector, we will continue to see this over dependency on large donors. We know that small, grassroots givers are less responsive to economic factors compared to large donors, but they need to be a priority for engagement and invited to participate. Other data we’re collecting indicates that people are still inherently generous and willing to support organizations and causes that matter in their communities.”

See the full report here … https://acrobat.adobe.com/id/urn:aaid:sc:AP:cb49ffde-0980-403b-9237-702b44331c9e

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Source From Non Profit Times