We’ve all been feeling the effects of inflation in our everyday lives. Just this week, in fact, I had a bit of sticker shock at the grocery store recently when I noticed the cost of 12 eggs had reached $4. That same dozen would have cost half as much about a year ago.
And for those members of our communities who are struggling to make ends meet, inflation has been especially devastating. The cost of essentials like food, housing, energy and transportation have gone up—way up—this year.
Nonprofit organizations across the country are helping to fill the gap by providing meals, shelter and more to those in need. But they’re also struggling both with the cost of goods and with support from donors whose dollars aren’t stretching as far.
It’s tough to grasp just how much of an impact inflation has made until you dig into the numbers. Cathy Folkes and our data team did just that: evaluated inflation data across the U.S. as well as our clients’ data to understand how this is affecting nonprofit fundraising.
The results were eye-opening, and I’m sharing them here with you. The big story is that inflation hits differently depending on where you are located. Not every nonprofit is in the same boat—or even the same storm.
Through June 2022, Inflation is up 13% across the US
First, we looked at the U.S. Congress Joint Economic Committee (JEC) State Inflation Tracker. The June report shows that prices increased 13.3 percent from January 2021 to June 2022.
That works out to an extra $718 of spending per month for the average American. If those numbers hold for 12 months, it will cost the average household an extra $8,618 a year.
But the bigger takeaway is that the impact of inflation very much depends on where you live. I mentioned earlier that a dozen eggs cost me $4. One of my colleagues shared that 12 eggs cost $6 where she lives. Another said they were around $2.50 where he lives.
On a broader scale, the government data also shows a wide range of inflation impact. West Virginians are feeling an extra cost of $560 per month, for example, while those who live nearby in Washington, D.C., are seeing $1,020 per month in higher prices. Texans have felt a $755 monthly increase, but just across the Red River in Oklahoma the inflation impact is $600 per month.
These differences can be found all over the U.S. And, over time, they add up to thousands of dollars more.
Nonprofits feel the impact of inflation
But how is inflation affecting nonprofits’ fundraising efforts?
To answer this question, we studied the data through June 2022 for more than 30 million donors at 10 of our large clients across the U.S. (excluding gifts over $10,000). These nonprofit organizations represent a range of areas, including health, social services, faith, animal welfare, relief and development, and more.
The data shows that male donors have decreased their percentage of giving by more than 3 percent.
Breaking this down by household income is quite interesting—though not shocking when you think about it. From January through June of this year compared to the same period last year, the biggest drop-off (-49%) comes from donors who make less than $30,000 annually. Those with less to give are, understandably, affected greatly by inflation.
The next biggest decline, however, is from donors who make more than $1.5 million. This could be related to the pandemic—these donors may feel a bit “tapped out” after elevated giving during the last two years.
Yet those donors who make between $500,001 and $1.5 million per year have nearly doubled their giving this year. Perhaps organizations should focus more of their efforts here.
Finally, we examined how the impact of inflation differed for charitable giving across the U.S. And there are some key differences in direct mail giving and digital giving.
Washington, D.C., which had the highest overall inflation impact on households, saw some of the lowest impact on giving (50th in digital and 49th in direct mail). On the other end of the spectrum, Maine ranked 49th in overall inflation impact yet saw a heavy impact on fundraising (fourth in direct mail and first in digital).
Just like the government data on inflation in general, we can see variances all over the U.S. in how inflation is impacting fundraising.
In the map below, our team has compiled the government data from the JEC and our client data from more than 30 million donors to break down how donors in each state have been affected:
Like I said earlier, not every nonprofit is in the same boat—or even the same storm.
Knowledge is power—and you having this information is your first step to thinking about it strategically. It could be that your fundraising is localized into an area more heavily impacted. It could be that you should consider your segmentation, use of dynamic gift arrays versus static ones, or another application.
It could also be that this information helps you explain your existing, unaltered strategy to your board. In fact, my colleague George Zhang has shared a few thoughts on what to do in this environment of inflation. Check it out here.
Inflation is real. Real impact. And there’s real power in understanding it.