Despite donor counts falling in five out of the last six quarters, giving dollars had stubbornly hung on to marginal growth in Q2 and Q3 2022, largely driven by large donors. However, according to FEP’s latest quarterly data, the continuing decrease in donors of all types in Q4 was accompanied by a notable weakness in total dollars, suggesting the possibility of continued challenges in 2023.
The full FEP Q4 2022 report is available here.
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 2022 Report Key Takeaways
- The long-term trend of waning donor participation, which started in 2012, experienced a sharp decline in 2022, with donors declining by 10%. In contrast, donations had been steadily increasing since 2012 until 2022, where giving levelled off through Q3 and then weakened in Q4 (which is typically the height of the giving season).
- Over the past decade, donations have increased by 69% while donors have declined by 19%. Given increased economic uncertainty and heavy reliance on large donations, this trend is unsustainable and the fourth quarter report may be the canary in the coal mine.
- There was a disruption to the increased donation but decreased donor trend during COVID for some organizations, but many others saw further weakening. Coming out of 2022, we see that same sector shake up with great variability in performance. As this report shows, the leading cause of donor decline is coming from a reduction in new donors of 18%.
- New donors that were gained in 2021 did not give again at the same rate in 2022, instead falling by 26.4%. Combined, new and new retained donors accounted for 81% of total donor decline year-over-year. What’s more, the stalwart of retention—repeat-retained— saw another decline of 3.5%. This brings the total overall donor retention rate for 2022 to 42.6%, the lowest rate on record.
The Q4 weakening in dollars from major donors is especially significant given the outsized role this small but mighty donor group has played in stabilizing the charitable sector, contrasting the steady decline in dollars raised from smaller donors throughout 2022.
“As more and more donations are tied up in large donors and the economy hangs in the balance, the health of the sector may be tied to the stock market in 2023,” says Woodrow Rosenbaum, Chief Data Officer of the GivingTuesday Data Commons. “The positive growth in GDP for the final two quarters of 2022 may have staved off a more precipitous decline, but as large donors tend to be more responsive to economic shifts, it is urgent for the sector to ramp up grassroots engagement. This report should be a wakeup call. A strong focus on broad, grassroots support is more critical than ever.”
Mike Geiger, the president and CEO of the Association of Fundraising Professionals and the AFP Foundation for Philanthropy, concurs. “These findings are undoubtedly concerning. Apart from the fact that high inflation makes the year-on-year results that much more stark, the numbers suggest a return to the familiar decade-long decline in donors we saw prior to COVID. As an industry, we need to find ways to be more proactive in building sustainable giving models so we aren’t as dependent on economic forces we can’t control.”
New Partners Joining FEP
FEP reports have historically been made possible by the generous support of four collaborating data providers: Bloomerang, DonorPerfect, Keela, and NeonOne, with data analysis and additional support from DataLake Nonprofit Research and Bonterra. Our data-sourcing network will now be bolstered by the welcome addition of Classy and Community Brands, increasing the fidelity of our datasets and the corresponding integrity of our reporting.
“GoFundMe and Classy are proud to partner with [the] Fundraising Effectiveness Project to help the sector find new and impactful ways to connect with our communities,” says Soraya Alexander, President of Classy and COO of GoFundMe. “We power the largest giving community in the world so by combining our data with [the FEP and] GivingTuesday’s industry-leading research we can create meaningful advancement of good in the world.”
FEP acknowledges that our insights can only be as valid as our data coverage, so we invite all giving platforms to join our efforts to provide accurate and accessible measurement and analysis to our sector.