The Fundraising Effectiveness Project just released their Quarterly Fundraising Report for Q2 of 2019. It is eye-opening, to say the least.
The report includes metrics on year-to-date nonprofit fundraising performance for the first half of 2019. It shows what is and isn’t working in giving trends. It then takes these trends and compares them to trends seen at the midpoint of last year.
Before we dive into our overall thoughts on this report, here are a few stats that stuck out to us:
- Overall revenue dropped 7.3% compared to the halfway point in 2018
- The total number of donors is down 5.8%
- The number of new donors dropped 9.5%
- Mid-level (3.5%) and major donors (8.2%) both decreased
Here are some takeaways we’ve gathered after digesting this information.
Competition is Getting Fierce
The nonprofit sector is increasing in competition, increasing the difficulty of donor retention. In fact, the report shows that both newly retained donors and repeat retained donors have seen significant drops, at 8.8% and 3.7%, respectively.
Both internal and external factors are shaping how people respond to charitable giving. The external factors are a list a mile long, including drastic fluctuations in the economy and changes in tax laws. The external factors also include our increased attention to social media — essentially, our donors are shaped by their curated news feeds that are filled with uncertainty and doubt.
Combine this with increased competition — 1.6 million nonprofits and growing, $4 million raised daily on GoFundMe, over $1 billion of new peer giving through Facebook Fundraising — and the internal factors come into play. RKD’s own research showed that, during 2018’s giving season, 1 in 5 donors gave less. And 50% of those giving less felt less connected to nonprofits.
In other words, some donors are reacting to a swelling of competition and climate of uncertainty by pulling back on when and how they give.
Donors Show More Support for Mission-Focused Organizations
In this current giving environment, organizations that leverage more of a mission-focused fundraising approach, rather than premium-based fundraising, are more likely to retain their donors. This could be due to donors feeling more bonded to a mission-based organization because they understand and appreciate the mission.
Building a donor base with mission-focused strategies helps ensure donors stay engaged, even when giving is experiencing a dip. Mission-driven donors are known to give at a higher level and are known to retain well. This generates a strong long-term net value for the organization.
Which organizations will make the cut and keep receiving donations in 2019, and which will not? Donors may choose organizations to which they feel the strongest connection and ones they have supported the longest. This could make donor acquisition an even more challenging goal for nonprofit organizations.
Possible Continuation of Year-End Trend
For many nonprofits that experienced a year-end giving decrease in 2018, the giving decrease has continued into 2019. This could be a continuation of the year-end trend we saw last December, but it does not have to be the new normal.
Organizations seem to be asking for more without working to maintain a personalized connection or build relationships with donors. Just like relationships in your own life, a lack of intentionality, listening and personalization can result in a weakening of the relationship.
What can be concluded from the most recent FEP report? We as a sector must work harder to build relationships and connections with donors of all sizes. Prioritize connection through listening, localization and data-driven strategies.
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