Charitable Giving Rebounds in Third Quarter, Study Finds

Charitable Giving Rebounds in Third Quarter, Study Finds

After a sluggish first half of the year, donations to charities jumped in the third quarter of 2018, even as the number of donors on a year-over-year basis fell, a report from the Fundraising Effectiveness Project (FEP) finds.

Conducted by the Association of Fundraising Professionals and the Center on Nonprofits and Philanthropy at the Urban Institute, the analysis, the 2018 Third Quarter Report, compares year-to-date fundraising data from 2018 and 2017. According to the report, which is based on information in AFP's Growth in Giving Database, nearly every fundraising metric was significantly lower on a year-over-year basis at the midpoint of 2018, including total giving revenue (down 2.1 percent at mid-year), number of donors, and donor retention rates. By the end of third quarter, however, total revenue had rebounded, up 2.6 percent on a year-over-year basis, with revenue from major gifts ($1,000 and up) driving much of the gain. In contrast, revenue from general donors ($249 and under) and mid-level donors ($250 to $999) at the end of the third quarter continued to lag last year's numbers.

The analysis also pointed to a decline in the total number of donors, down 4.3 percent on a year-over-year basis. And while the share of repeat retained donors (donors who have given to the same organization for more than two consecutive years) inched up 0.9 percent, the number of new donors (donors giving for the first time to an organization), new retained donors (new donors giving for a second consecutive year to the same organization), and recaptured donors (donors who had stopped giving to an organization before resuming their support in 2018) all lagged last year's third-quarter numbers. In addition, the analysis found that the retention rate for first-time donors, typically around 16 percent to 17 percent, fell slightly, to 14.4 percent, while the repeat retention rate, which historically hovers around 45 percent, declined to 43 percent.

"What these figures show is the continuing trend of charities receiving more revenue from a smaller group of donors," said Ben Miller, chief analytic officer of DonorTrends and secretary of the Growth in Giving Initiative. "Even with the increase in repeat retained donors, this trend is simply not sustainable for the long-term, especially as the number of potential donors continues to slowly shrink. Charities need to do a better job of inspiring and retaining supporters, which is one of the goals of the Growth in Giving Database and the Fundraising Effectiveness Project."

"Charitable Giving Rebounds in Third Quarter Due to Increase in Larger Gifts." Association of Fundraising Professionals Press Release 11/17/2018.