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Charitable Giving in 2021 Increased 2.7% over Unprecedented 2020 Levels

7 Apr 2022 by GivingTuesday

New Retained Donors up 26%, Despite Overall 5.7% Drop in Number of Donors

Buoyed by large donors, as well as donors who were acquired by an organization in 2020, and continued their support in 2021, overall charitable giving increased by 2.7 in 2021, according to the Fundraising Effectiveness Project’s (FEP) Fourth Quarter Fundraising Report.

The Fundraising Effectiveness Project (FEP) is a collaboration among fundraising data providers, researchers, analysts, associations, and consultants to empower the sector to track and evaluate trends in giving. The project offers one of the only views of the current year’s fundraising data in aggregate to provide the most recent trends for guiding nonprofit fundraising and donor engagement. The FEP releases quarterly findings on those giving trends, released both via downloadable reports at afpfep.org and in a free online dashboard. 

FEP Q4 2021 Report Key Takeaways

  • While giving in 2021 has not seen the explosive growth of 2020, overall dollars donated rose 3.5% in 2021. That’s significant, since giving levels were anomalously high in 2020, but also needs to be understood within the environment of rising inflation.
  • Comparisons to 2019 are provided to help contextualize trends, given the anomalous nature of 2020 for the charitable sector. Results show donor levels are nearly flat but dollars have increased 11% when comparing against 2019.
  • Although the number of donors is down, donor retention among new donors (those who gave to an organization for the first time in 2020) is very strong, up 26%. This is in contrast to the overall number of donors, which could not keep pace with 2020, and is down 5.7%.
  • Overall, donor numbers are down largely due to weak acquisition of new donors in 2021 and diminished recapture of lapsed donors, especially in the small-donor segment.

While giving increased in 2021, the number of donors declined by 5.7%, primarily due to charities having challenges in finding new donors and inspiring “lapsed” donors—those who have given in one year but haven’t given since—to give again.

On the other hand, new donors who gave to a charity for the first time in 2020 and gave again to the same charity in 2021, increased by an extraordinary 26%. 

“We saw such incredible growth in 2020 in overall giving and the number of donors—10.6% and 7.3%–because of the pandemic that 2021 was never going to approach,” said Mike Geiger, MBA, CPA, president and CEO of the Association of Fundraising Professionals. “Nevertheless, that giving continued to grow in 2021 reflects well on the generosity of the American people. What we’re seeing is a large increase in new retained donors – those who gave to a particular organization for the first time in 2020 and then continued giving to that organization in 2021 – which might indicate that donors who supported pandemic-related causes in 2020 kept doing that in 2021. At the same time, the overall number of donors dropped in 2021, especially newly acquired donors, which may be a sign that many people were uneasy about their economic situation with the ongoing pandemic.”

Geiger and other FEP leaders counseled that since 2020 was such an outlier, comparing results between 2019 and 2021 would be more helpful to charities looking for trends and strategies. Such a comparison shows that overall giving increased by 11% from 2019 to 2021, while the overall number of donors dropped by less than 1%.

“These last two years have been particularly volatile in the philanthropic sector, and we can be grateful that fundraising dollars continued to rise throughout that volatility,” said Woodrow Rosenbaum, chief data officer of GivingTuesday. “Of course, maintaining a healthy philanthropic environment requires participation at all levels. We’re concerned that donors, especially smaller-gift donors, decreased in 2021. But at the same time, GivingTuesday saw a 6% increase in donors in 2021, which demonstrates that even in this environment, it is still possible to motivate people to give, but we have to invest in engaging donors to keep them involved.” 

As nonprofits enter Q2 of 2022 and plan their fundraising strategies for this year, the FEP Fourth Quarter Fundraising Report shows opportunities that charities can leverage to inspire more giving in 2022 while mitigating risk in a continued period of uncertainty. One example is that donors who participate more frequently are sticking around but giving less money, whereas one-time donors are not sticking with a charity but are still driving revenue growth. This trend presents an opportunity to leverage the dependability and good will of committed donors and grow their capacity to contribute moving forward. 

“As we move into the second quarter of 2022, the big takeaway from this report is that we have a huge opportunity with donors acquired during 2020 who are continuing support and are ready to give,” said Doug Schoenberg, CEO for DonorPerfect Fundraising Software.  “Nonprofits need to harness that energy, communicate effectively with those donors, and invite them to be part of the community. At the same time, we’ll need to double-down on donors who may have drifted away and give them compelling reasons to come back and participate in giving.”

Access the FEP Dashboard here.

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