Just Ask Your Donors

Posted by Joan Ulmer on October 1st, 2019 in Thoughts & Commentary

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The Effective Fundraising Project (EFP), a joint program of the Urban Institute and the Association of Fundraising Professionals, has come out with its second quarterly report for 2019.  To put it bluntly, the results are discomforting. 

EFP uses a panel of 4,456 organizations for these quarterly reports.  All of these organization have raised at least $5,000 from at least 25 donors in each of the last 6 years.  In 2018, these organizations raised a total of $4,766,892,210, adjusted for inflation.  Thus, unlike so many studies that like to focus on the bigger organizations in the sector, these quarterly reports cover the gamut.  EFP has been doing these quarterly reports since 2017, and annual fundraising effectiveness reports for at least a decade. 

Overall, in the first half of 2019, nonprofits had received donations from almost 50% of the total number of donors they had in 2018, though this is a 5.8% drop from where they were this time last year.  Unfortunately, these donors have given only 41.06% of what the organizations raised in all of 2018.  In other words, slightly fewer donors gave a total of a lot fewer dollars.  But, as we know, not all of our donors act the same way.

At mid-year 2019, the number of new donors —those who were making their first ever gift to an organization—was but 41.39% of those who were new donors to an organization at the end of 2018; this number is down almost 10% compared to where things stood this time in 2018.  

Organizations did better to much better, however, in retaining donors.  “New retained donors”—those whose first gift to an organization had been in the previous year and then gave again the very next year, making the current year their second year of giving—disappeared at a slightly better rate than the success in attracting brand new donors:  these numbers dropped by 8.8%.  Where organizations appear to have done much better—and there may be a hint as to strategy going forward—was with retaining repeat donors and pulling lapsed donors back in. 

“Repeat retained donors”—donors who have been retained for at least one year after their initial year of giving (so, giving in 2019 would be the third year in a row that they gave)—dropped by only 3.7%, and organizations had kept 56.46% of these donors by mid-year.  The number of “recaptured donors”—those who had given in a previous year but not 2018– who had already given by 2019’s midpoint was down only 1.1% compared to the comparable numbers for 2018.

Sadly, the number of people giving is declining, a data point we’ve seen in other studies, but, as previously noted, so are the dollars being given.  By mid-year 2019, organizations had only received 41.06% of the total dollars raised in 2018.  There may, however, be some positive news in the story told by how donors have given.  (But I will wait until the end of the year to be definitive on this topic). 

Those donors who gave less than $250 have dropped by only .2%, while those who were in that range last year but increased their giving this year, grew by 4.41%.  In other words, donors who gave in the $250 and under range last year have decreased by .2%, but 4.41% of those who gave less than $250 in 2018 gave more than they gave in 2018, but still under $250.  The number of donors who gave between $250 and $999 in 2018 dropped by 3.5% as of mid-year 2019, but the number who were first time donors in this category rose by 42.2%.  Those who gave $1000 or more in 2018, donors who many organizations might consider major donors, dropped by 8.2% by mid-year 2019, but 1/3 of those gave $1000 or more this year are first time donors in this category.

The good news:  even though there were fewer of them, many of those donors who remained with an organization for another year increased how much they gave. 

The fact that the total number of donors is declining is no longer news; Giving USA 2019 reported that as have individual organizations.  Where this second quarter report shows some glimmer of hope is in the “success” (yes, I’m calling a smaller loss a success) of retaining donors and pulling back lapsed donors, and seeing increases in the size of those gifts.  Lapsed donors returning to the fold can say several things:  folks went elsewhere and didn’t find anything as good; it was an organization’s turn in the vortex cycle to woo its millennial donors back; there was the right messaging that spoke to people, and so many other possibilities. 

How to know what it was?  Simple:  ask your donors why they came back.  Many of the same or similar explanations can be given for why donors decided to increase their giving:  deepening loyalties; recognition of just how good the organization’s solutions are; the right pitch for the right purpose, and so on.  Again, how to know?  Ask.

The old fundraising adage that you don’t get what you don’t ask for extends not just to money; it extends to information and understanding.  In these times of increased competition among nonprofits for seemingly fewer philanthropic dollars, information proves itself to be, yet again, powerful.

The opinions expressed in Nonprofit University Blog are those of writer and do not necessarily reflect the opinion of La Salle University or any other institution or individual.