The Fundraising Effectiveness Project released its third quarter Quarterly Fundraising Report and there are some disturbing trends that we all need to pay attention to. The headlines are pretty startling:
- The amount of donations received from the 8,023 organizations represented in this report is down -4% and
- The number of donors is down -5% through September of 2017 (compared to the prior year.)
In the third quarter, we experienced an unusual number of disasters from Hurricanes Harvey, Irma, Jose, and Maria, as well as earthquakes and wildfires. Looking at our own clients that are directly related to the recovery effort, it would appear that donors in the U.S. responded as expected, with a flood of donations to relief organizations. One of our relief clients saw a 335% increase in the number of new donors within a matter of weeks. Naturally, I expected to see a corresponding lift in overall donations and donors for the third quarter.
In actuality, there was a just small bump in donations between the second and third quarters across the sector. Donations through June were -6% below the prior year and now land at -4% through September. This was NOT the huge swing I was expecting. Could this mean that the large increases in donations that flooded to emergency relief organizations were mostly donations that would have gone to other organizations? Many of our organizations experienced declines in fundraising during this time period, making the year end that much more important this year.
The other disturbing trend is the decline in donors. The number of new donors that gave from January to September in 2017 is 14% lower than it was in 2016. In addition, of those new donors from 2016, across all nonprofits in this report, we are down -33% in the number of new donors retaining in 2017. This spells trouble for the nonprofit sector as a whole.
The good news is that the number of existing donors that gave through the third quarter is up 18% for retained and 13% for reactivated. Non-profits must beware though, because these metrics are lagging indicators. The repeat retention rate is at 45% compared to 48% the year prior. This can only happen when there is a larger pool of donors in 2016 than in 2015. Thus a lower retention rate, but a higher number of retained donors. Think of a roller coaster going up a big hill. The elevation continues to increase as the speed declines. Let’s just hope that this is more of a bump than a cliff.
To further examine the effects of these trends and what they could mean for your organization, join me and Jon Biedermann (DonorPerfect) this Thursday, November 16th, as we take a deep dive into the report. Join the free webinar.
The Fundraising Effectiveness Project was established by the Association of Fundraising Professionals (AFP) and the Center on Nonprofits and Philanthropy at the Urban Institute in 2006, and has been publishing yearly surveys of non-profit organizations since 2008. While the early years only reported on several hundred organizations, the Growth in Giving Initiative has grown to 15,281 organizations thanks to the donor software firms: Bloomerang, ClearView, DonorPerfect, eTapestry, and NeonCRM. Compiling the largest dataset of its kind, of anonymized individual donations.