COVID-era fundraising comes to a halt as donations dwindle and donor and retention rates drop in Q1 2022
The Fundraising Effectiveness Project (FEP) is a collaboration between fundraising data providers, researchers, analysts, associations and consultants to enable the industry to track and assess fundraising trends. The project offers one of the only views of the current year’s fundraising data as a whole to provide the most recent trends to guide nonprofit fundraising and donor engagement. The FEP publishes quarterly results on those who give trends, published both via downloadable reports on www.afpfep.org and in a free online dashboard available at http://data.givingtuesday.org/fep-report.
The Q1 2022 fundraising report compares charitable giving from the first quarter of 2022 to the first quarter of 2021. The report revealed that the number of donors decreased by 5.6% and the donor retention rate, the percentage of donors who gave in 2021 and then gave again in 2022, decreased by 6.2% year over year.
“In some ways, we shouldn’t be surprised by the data,” said Mike Geiger, MBA, CPA, president and CEO of the Association of Fundraising Professionals. “Overall, charitable giving has been extremely strong in recent years – the FEP has calculated a growth rate of giving of 11% from 2019 to 2021, with the number of donors remaining essentially stable. This high level of donation growth was unlikely to continue, and these figures therefore reflect the decline in donor participation. But what is of concern is the impact of inflation, as the EFF figures are in real dollars. Thus, taking into account inflation, the 2.2% growth rate of charitable donations has less impact for organizations. »
While donations increased by 2.2% this year, led by large donors, the number of donors fell by 5.6%, mainly due to weak donor acquisition, particularly among small donors. donors. The main driver of the drop in donor retention rate (-6.2%) was the drop in retention of new donors (the percentage of donors who gave for the first time to a charity last year and gave to the same charity again this year); this decrease must also be understood in the context of incredibly high rates of new donor retention in 2021. In the report, the first quarter of 2022 is compared to the first quarter of 2021, which saw the highest ever growth in retention rates retention of new donors in the first trimester.
“While people give all the time, the majority of donations come in the last quarter of the year,” said Jon Biedermann, president of the Fundraising Effectiveness Project and president and CEO of the Biedermann Group. “But that doesn’t mean we shouldn’t worry about what the data shows or that we shouldn’t prepare for significant challenges, which some organizations are already grappling with with inflation and weakening confidence. consumers.”
FEP analysts were quick to point out that the first quarter numbers are not always indicative of what the full year will be in terms of levels of charitable giving and attendance. Data from the first quarter of 2022 on the types of charities receiving monetary donations also indicates a return to “normalization” and a reversal of COVID donation trends seen over the past two years. COVID has strongly influenced fundraising behaviors, and cause-based analysis shows that the influence of the pandemic has started to reverse.
“The areas of focus needed now are persistent, yet critical nonetheless: donor acquisition, donor retention, and expanding donor bases,” said Woodrow Rosenbaum, chief data officer at GivingTuesday. “Know all your donors, share compelling stories about the impact of their giving, and clearly demonstrate the impact on the community. Charities can continue to be resilient in 2022, but they must protect themselves from the recession through strategic fundraising efforts. We have found that organizations that build and maintain a broad base of support, including core daily donors who give at various levels, are much more resilient to economic shocks.
About the report
The FEP 2022 First Quarter Fundraising Report is available for free at www.afpfep.org, with a free online dashboard available at http://data.givingtuesday.org/fep-report.
The data analysis includes details of 9,618 US-based nonprofit organizations as part of the Fundraising Effectiveness Project. The FEP Organizations Database is made up of organizations that raise between $5,000 and $25 million.
In 2021, FEP has implemented a number of methodological changes to provide a better representation of the “typical” experience of organizations and granular trends in donation patterns.
The Fundraising Effectiveness Project
The Fundraising Effectiveness Project publishes quarterly and annual reports that examine key fundraising metrics, serving as a reference for nonprofit executives, development staff, and researchers. The Fundraising Effectiveness Project and the Growth in Giving Database are both administered by the Association of Fundraising Professionals Foundation for Philanthropy and The GivingTuesday Data Commons.
The Growth in Giving database is the world’s largest public record of donation activity, with over 204 million donation transactions, and is continuously updated by leading thought leaders in donation software. of funds (in alphabetical order) Bloomerang, DonorPerfect, Keela and NeonCRM. Other partners include Seventh-day Adventists, the Biedermann Group, DataLake Nonprofit Research and Bonterra. For more information and how you or your fundraising software provider can participate, please visit www.afpfep.org.