Nearly all new reports and benchmarks show a decline in both donors and dollars, and the Fundraising Effectiveness Project’s (FEP) latest Quarterly Fundraising Report™ is no exception. These decreases continue the post-COVID trends, leaving many fundraisers to wonder when they’ll bottom out.

The new FEP report compares overall philanthropic giving trends in 2022 and 2023. While most numbers are still in the red, there are signs that a stabilization is coming. Might 2024 be the year things turn around?

Let’s dig into the data to uncover what it means for fundraisers as we prep for the second half of the year. We’re sharing noteworthy takeaways and trends, as well as five strategies to focus on.

High-Level Takeaways from the FEP Report

 

FEP tracks three key metrics: donors, dollars, and retention. In the Q4 fundraising report, we see a decline in all three. Donors are down 3.4%, dollars are down 2.8%, and retention is down 2.5%. It’s a continued decrease and a concerning trend, but it’s also a significant stabilization over the unevenness of 2022. That brings a glimmer of good news.

Donors were down 10% year-over-year in 2022, but they were down only 3.4% in 2023. For many organizations, total donors and dollars are still well ahead of the pre-COVID-19 giving boom. That means 2024 could end up being a pivotal year for many nonprofits. Will fundraising continue to decline, or are things finally starting to stabilize?

Another bright spot in the report was the increase in new donors of 2.3%. The big uptick came around October or November and was likely motivated by external factors such as global conflicts, the war in the Middle East, and international disasters.

In addition, fundraisers continue to be more mindful about reaching out to diverse audiences. By using inclusive creative materials and expanding communication channels, they’ve been able to draw more new donors to their organizations.

Noteworthy Trends

The FEP fundraising report revealed several trends that fundraisers can learn from.

Trend 1: Notable Decrease in Supersize Donors

Supersize donors—those who give $50,000 or more—decreased by 7.4% from 2022, the largest decrease among donor sizes. However, you can gain some insight when you look at the reporting organizations. Thirty percent of the dollars reported in the FEP report come from human service organizations like higher education, which has seen a significant decrease in larger donations.

Regardless of your industry, it’s important to expand your thinking about your ideal major donor. Rather than identifying the traits of your current major donors and going after similar prospects, consider who on your file shows an affinity for giving more.

In addition, think beyond typical major gifts fundraising. Donor-advised funds will likely expand in 2024. Fundraisers should also focus on developing a pipeline, particularly for mid-level donors. Doing so will enable you to uncover your next generation of major donors.

Trend 2: Sustainer Revenue Increased

Revenue from sustainers — or those who tend to give through monthly giving patterns — increased by 2%, which underscores that organizations’ most loyal and committed donors are showing up in bigger ways. So, how can you acquire and retain more of these givers?

One way is through subscription-based giving. Automated monthly payments are becoming more comfortable for donors, especially those in younger generations. But don’t just set it and forget it. Rather, engage sustaining donors in ways that surprise and delight them, such as through a branded monthly giving program with extra perks or insider information for mid-level donors.

The goal is to ensure that they feel continually valued and appreciated. A steady stream of loyal support enables you to be bold as an organization and solve and tackle the issues that will move your mission forward.

Trend 3: Significant Decrease in Micro and Small Donors

The FEP report also showed a significant decrease in those who give $500 or less, which was responsible for nearly 80% of the overall drop in donors. This may be in part because most donors fall into this category, and fundraisers tend to focus more on major gifts. Still, it’s a concerning trend.

The other ways people are giving small donations, such as GoFundMe, crowdfunding, and Facebook fundraisers, could also be contributing to this decline. It’s not necessarily whether people are still giving small gifts, but how they’re giving.

We may also see an impact from organizations that cut their acquisition programs in 2022 to save money. As you strategize moving forward, it’s important to think both short—and long-term.

5 Strategies to Focus on Through EOY

In this pivotal year, let’s walk through five strategies nonprofits can focus on:

1. Expand your thinking about the ideal donor. Again, don’t simply look at your current major donors and try to identify lookalikes. Go beyond that audience in demographics, age, and everything else.
2. Consider artificial intelligence (AI) solutions. AI can tremendously boost your efficiency and effectiveness. Leverage these solutions to better understand your donors and to create more timely conversations and outreach. Just be sure you have conversations with your team about what AI can’t replace.
3. Focus on sustainers and the popularity of a subscription model. Most of your donors live in this space. Use their signup as an opportunity to reinforce the change they’re making throughout the year.
4. Lean into the election year. We’re in for a noisy fall, but you can take advantage of that energy. If your cause or issue is drawn forward, speak to why your work is more essential than ever. It’s important, though, to be mindful about how the election will impact your communication calendar.
5. Use an omnichannel approach for a true brand experience. Think about donor engagement outside the traditional cycle of cultivation, solicitation, and stewardship. Donors expect a true brand experience — deliver one that feels deeply personal and aligns with how they want to experience your brand.

Don’t Be Discouraged; Be Bold

The FEP report can feel disheartening, but keeping some context in mind is important. Look at the sub-sector trends, which varied widely, as well as trends by organization size. You’ll see there’s some opportunity for growth.

Finally, don’t be afraid to be bold this year and engage your audience in the important conversations that are happening. Do what you can to make sure they feel powerful — that they can be an essential part of the change they want to see in the world.

If you need some support as we look toward the second half of 2024, reach out to our team at Allegiance Group + Pursuant. We’d love to help you put together a strategy to acquire, engage, and retain donors so you can finish the year strong.

This blog post is based on a podcast interview with Kristin Priest, VP of Client Strategy. Listen to the full episode: Podcast | Is 2024 a “Make or Break” Year for Nonprofits?

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