The first quarter report from the 2019 Fundraising Effectiveness Project (FEP) is in and the news isn’t very good for nonprofits. “
Charities are neither attracting new donors effectively, nor are they keeping them effectively, judging by the continued drop in retention rates shown in our quarterly reports,” said Elizabeth Boris, chair of the Growth in Giving Initiative.
Here is an excerpt from a report published in The NonProfit Times:
The FEP’s 2019 “First Quarter Report,” which reviews giving data from January through March 2019 and compares it to the same time period in 2018, found that across the board almost every key metric declined — with the exception of revenue produced by donors giving $250 or less.
“We’re seeing the exact same situation that we experienced in the first quarter of 2018, right down to the only metric that increased,” said Mike Geiger, MBA, CPA, president and CEO of the Association of Fundraising Professionals (AFP). “What’s so significant about these numbers? By the end of the year in 2018, our quarterly reports showed that the growth in annual charitable giving dropped tremendously, from roughly 8 percent in 2017 to just 1.6 percent in 2018.”
Geiger said it is difficult to forecast at this point for the rest of the year, but if the same scenario happens again, growth in giving could continue to drop in 2019, perhaps to the point where overall annual giving actually decreases.
Data in the 2019 first quarter report shows the total number of donors decreased by 5.7 percent during the first quarter of 2019 compared to the first quarter of 2018, while overall revenue dropped 2.2 percent. The overall retention rate, a critical metric for charities as it measures the number of donors who continue to give to the same organization from one year to the next, also decreased by 0.9 percent.
Perhaps the most troubling figure is the number of new donors, which plummeted by 10.5 percent for the quarter, according to Geiger. The lack of new donors exacerbates another problem for the charitable sector: relying on fewer donors overall for more money. With the number of donors decreasing by 5.7 percent, but giving revenue dropping by 2.2 percent, the charitable sector continues to see fewer, typically wealthier, donors accounting for more and more of giving, according to the report’s authors.