2023 was a challenging year for nonprofits—including food banks.
Food banks across the country reported that the demand for services continues to soar, but unfortunately, they’re trying to meet these needs with fewer resources than in years past.
And as inflation continues to impact grocery prices, food and monetary donations are expected to take a hit during the 2023 holiday season when generosity typically increases.
With all this in mind, it’s not surprising that our Q3 benchmarks show year-over-year declines for food banks (who are also still coming off record highs during COVID). And while it may sound like the same song and dance from last year, there are a few key differences.
As we wrap up 2023, let’s review some insights from our latest benchmark report, touch on GivingTuesday results and walk through four areas of focus for food banks in the new year.
4 key insights from Q3 2023
1. Donor lifecycles are stabilizing
An influx of new donors in 2020 and 2021 led to huge fluctuations in the make-up of donor lifecycles the last few years. But things have finally begun to stabilize across all lifecycles in 2023.
2. Rate of YOY revenue decline slows
Let’s face it—we’re still dealing with year-over-year revenue declines. But that decline is starting to slow, down 6.11% after Q3 2023. Increases in donor value and retention are helping to ease this decline.
3. Acquisition percentages begin to normalize
The percentage of new donors acquired has also begun to normalize—and new donor values have increased to $213, up from $194 in 2022.
4. Core donors drive majority of total revenue
Core donors (those who give for two consecutive years or more) accounted for 72% of food bank revenue in 2023, or approximately $117 million. Core donor counts decreased by less than 1% in 2023, and retention was up approximately 4%.
Unfortunately, that 1% drop in core donor counts equates to $6.6 million in lost revenue—or 5% of the total 6.1% year-over-year decline.
About the report
We analyzed full-file data from 68 RKD food bank clients across the U.S. from Jan. 1 to Sept. 30, 2023. Trends are based on all donors and all gift types, excluding gifts of $10,000 or more.
A quick update on GivingTuesday
GivingTuesday results across the nonprofit industry were mixed, with reported revenue up only 0.6% this year and a 10% decline in the number of donors who gave.
RKD’s food bank clients saw slight declines year over year, with a 4.6% drop in day-of revenue and a 1.1% decline for the entire campaign. But it’s important to note that revenue numbers were still well above results prior to COVID-19.
You can read more about our GivingTuesday findings here.
Areas of focus as we head into 2024
2024 will be a critical year for food banks as things begin to settle down post-COVID. With donor lifecycles stabilizing, it’s time to think about the future instead of looking to the past.
How many times have you heard, “But revenue is still ahead of 2019!” We’re all guilty of saying this. As we head into the new year, it’s important that food banks embrace current trends and pivot to solutions focused on improving the future.
A few areas of focus should be:
Omnichannel donor journeys
2024 must be the year of busting through the channel silo doors. It’s not about a direct mail communication plan and media advertising funnel.
Today’s donor expects a cohesive experience across all the channels they engage with you in. Food banks should use data to build lifecycle communication plans across all audience segments (like core, monthly, mid-level etc.) that meet donors where they are with relevant and timely offers.
Resources to get you started:
- Blog: How food banks can build smarter donor journeys
- Blog: The bedrock of nonprofit fundraising: Accurate and accessible data
Digital media investment
Donor acquisition continues to become more and more challenging, and an increased number of donors are turning to digital channels as their preferred channel of giving.
Food banks should look to expand their donor base in the new year with an optimized media prospecting and lead generation funnel that complements their overall omnichannel strategy.
Resources to get you started:
- Blog: Digital frontier: Nonprofits can expand their donor base with media prospecting
- Webinar: Rebuild trust and reach new audiences at the same time
Performance audits
It’s easy to look at a decline in revenue and blame your fundraising program as a whole. But what‘s really causing your decline? Maybe direct mail is in a great spot, but digital needs some help. Perhaps your email program is healthy, but paid media investments need to be reoptimized.
By auditing each of your programs, you’ll gain a better understanding of which programs need improvement and can better plan strategic efforts to lift those channels in the new year.
Resources to get you started:
- Blog: Has your food bank reached its digital tipping point?
- Blog: 6 clues in your donor file that could spell trouble ahead
Stewardship and retention of core donors
As we saw in the Q3 charts above, core donor counts are in decline. As we close out the year and head into 2024, core donor stewardship and retention strategies will be essential to turning revenue declines around. Here are a few strategies you can implement over the next few months:
- Share impact stories to show how their gift made a difference
- Say thank you with a personal handwritten note, phone call or a video
- Schedule personal tours or a meet and greet with the CEO
- Invite core donors to volunteer and build connections without a monetary ask
Remember: A large percentage of your core donors today were new to your organization 2-3 years ago. You need to continue to build up trust with them as you foster stronger relationships.
Resources to get you started:
- Blog: Embrace then shift: Focus on trust before building relationships
- Webinar: Transform your newsletters to be donor-centric
- Podcast: Theodore Wagenaar thinks about why donors stop giving to organizations
This is by no means a comprehensive list—solutions will look slightly different for each food bank depending on where you are in your journey. If you have any questions about the strategies above or would like to discuss customized solutions for your program, please don’t hesitate to reach out!
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