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Continued Consolidation in Q3 2022: Donors Down (-7.1%) But Dollars Up (4.7%) Yet Again

12 Jan 2023 by GivingTuesday

Charitable giving increased moderately in Q3 2022, but for the 4th time in the last 5 quarters, total donors dropped significantly in Q3 2022. This suggests that while the decrease in donor numbers may undermine long-term resilience, large established donors offer some continuing stability and opportunity, according to the Fundraising Effectiveness Project’s (FEP) Third 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 Q3 2022 Report Key Takeaways

  • Q3 data shows a continued steep decline in donor counts, with a Q3 YOY drop of 7.1%, which follows a similar 7% YOY drop in Q2. New Donors (down 19.2%) and newly retained donors (down 24.7%) were responsible for the large majority of this decrease, whereas Repeat Retained donors, who represent 40% of all donors, dropped by only 2%.
  • Despite this overall decline in donors, dollars continue to rise, with a 4.7% increase in Q3 as compared to 2022. Large sustained donors are supporting donation levels while other donor categories and dropping retention (down 3.1%) suppress gains.
  • Meanwhile, although Cause played a significantly reduced role in giving in Q3, with Cause Impact down 40%, a few causes stood out. Religious giving was up 4.9% YOY, while giving to international and foreign causes decreased by 20%. Donations to public and societal benefits were also down by 7.8%. Other causes remained relatively stable.

“Too many eggs in too few baskets is never a good thing,” says Nejeed Kassam, Founder and CEO of Keela. “Even if total dollars are rising, the continuing decline in new and retained donors creates risk for both fundraisers and organizations. A focus on recurring giving is critical for mitigating that risk. And research has shown that organizations with a loyal, broad base of support, including from smaller donors, are more resilient during economic downturn.”

In addition, the difference between the median change and mean change within the 5 categories of organization based on size suggests that within each category there was a distinct set of organizations that outperformed others, with a small subset of organizations driving growth.

“The challenge as I see it is to understand what separates high-performing organizations from those that struggled in this data,” comments Lori Gusdorf, CAE, Executive Vice President of the AFP Foundation for Philanthropy. “What did they do that differentiated them from those that saw significant declines in giving? With so much volatility in the market this needs to be much more clearly understood.”

The FEP Q3 report summarizes and analyzes data from over 8,000 organizations, and yet 10.4% fewer organizations reported data than anticipated. This is concerning in part because it may signal a lack of adequate resources or closures among organizations, but also because the more data available the more accurate and relevant the insights generated will be. 

“There will always be ups and downs in the market,” says Woodrow Rosenbaum, Chief Data Officer at GivingTuesday, “which is why resilience is what it’s all about. The decline in donor retention is a wake-up call but also a call-to-action. We need to focus on effective tools and tactics that will help individual organizations flip this script, so they can build sustainable futures by more effectively attracting and retaining all donors, not only focusing on large donor stewardship. That’s something we should all be focused on in 2023.”

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