The Fundraising Effectiveness Project’s Q2 2024 report provides a comprehensive overview of the current state of philanthropic giving, highlighting both encouraging trends and ongoing challenges. The Q2 insights demonstrate a -3.9% decrease in the number of donors and a -4.5% decline in retention rates, the total dollars raised have increased by 3.7%, suggesting that while fewer individuals are donating, those who do are giving more generously, indicating a continued reversal from the sharp declines seen in previous years.
However, the smallest donors, who make up a significant portion of the donor base, are continuing to lead the decline in donor engagement, indicating the need to tailor fundraising strategies to small and medium-sized donors, often seen as the backbone of a resilient donor base. The report also points to a continued year-over-year increase in donations to International and Foreign Affairs causes, indicating that global aid and relief efforts continue to be important drivers to unlocking American generosity. The data underscores the importance of innovative strategies to engage small donors and enhance donor retention while leveraging the generosity of more frequent and committed supporters.
KEY FINDINGS
- Decline in Donor Participation: Donor numbers have dropped by -3.9% year-over-year, with smaller donors ($1-$100) showing the steepest decline (when accounting for late data). This signals a weakening in grassroots support, which many nonprofits rely on for broad-based contributions, particularly during year-end campaigns
- Falling Retention Rates: Retention rates are down 4.5%, with a notable -5.8% decline in dollars raised from repeat retained donors. Even traditionally loyal donors are becoming less engaged, making it essential to address retention strategies in the coming months.
- Modest Increase in Overall Fundraising: In line with similar trends seen last year, total fundraised dollars have increased by 3.7%, albeit from a smaller amount of donors. This reinforces the need for nonprofits to remain agile, continuously adapting their fundraising strategies to capture as much year-end giving as possible.
Strategic Insights for Year-End Fundraising
Mid-year trends offer clear guidance for how nonprofits can optimize their year-end campaigns, which are typically the most critical time for fundraising success.
Focus on Donor Retention
- With retention rates declining, re-engaging lapsed donors should be a top priority. Personalized outreach can help rebuild connections by reminding donors of their impact and renewing their commitment to the cause.
- Action Step: Implement targeted re-engagement campaigns that feature personalized messaging and compelling impact stories to bring lapsed donors back into the fold.
Identify opportunities with Small Donors
- Understanding the causes for the drop off in small donors is crucial for long-standing declines in donor participation. While mid-level and major donors are currently providing a revenue stream, longer-term sustainability means addressing declining participation rates among these smaller donors.
- Action Step: Renew your approach to reaching out to small donors, through targeted research, communication, and marketing strategies.
Create Urgency in Year-End Appeals
- The year-end season is a prime opportunity to reverse mid-year declines. Urgent, time-sensitive appeals—such as those tied to GivingTuesday or year-end tax deadlines—can motivate both new and returning donors to act.
- Action Step: Craft a multi-channel campaign that emphasizes urgency, leveraging deadlines and matching gift challenges to drive immediate action from donors.
Leverage Data for Real-Time Adjustments
- Real-time tracking and data-driven insights are key to refining year-end fundraising strategies. Monitoring donor behavior as it happens allows nonprofits to pivot and optimize outreach during the final push.
- Action Step: Use your database’s dashboards to track performance during the year-end period and be ready to test and adjust strategies based on live donor feedback and engagement levels.
