The third and fourth quarters of 2022 were not good for fundraising. 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 leveled off through the third quarter and then weakened in the fourth quarter, which is typically the height of the giving season.
Despite donor counts falling in five out of the past six quarters, giving dollars had hung on to marginal growth in the second and third quarters of 2022, largely driven by large donors. However, according to Fundraising Effectiveness Project’s (FEP) latest quarterly data, the continuing decrease in donors of all types during the fourth quarter was accompanied by a weakness in total dollars, suggesting the possibility of continued challenges in 2023.
The full FEP Q4 2022 report is available here.
The FEP is a collaboration among fundraising data providers, researchers, analysts, associations, and consultants to track and evaluate trends in giving. The FEP releases quarterly findings on those giving trends, released both via downloadable reports at afpfep.org and in a free online dashboard.
Key Takeaways:
- During the past decade, donations have increased by 69% while donors have declined by 19%. Given increased economic uncertainty and heavy reliance on large donations, FEP officials believe the trend is unsustainable and the fourth quarter report might 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 experienced further weakening. Coming out of 2022, FEP officials see that same sector shake up with great variability in performance. 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. 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,” according to 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,” according to Rosenbaum.
Mike Geiger, the president and CEO of the Association of Fundraising Professionals and the AFP Foundation for Philanthropy, said that “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.”
