For the second consecutive year, charitable giving fell in the first quarter, raising concerns about giving for the rest of the year, a report from the Fundraising Effectiveness Project finds.
Conducted by the Association of Fundraising Professionals and the Center on Nonprofits and Philanthropy at the Urban Institute, the analysis of 90.8 million gift transactions for nearly forty-five hundred organizations in AFP's Growth in Giving Database found that giving between January and March 2019 for nearly every key metric declined on a year-over-year basis. According to the 2019 First Quarter Report (5 pages, PDF), the total number of donors in the quarter fell 5.7 percent from a year earlier, overall revenue dropped 2.2 percent, and the year-to-date donor retention rate fell 0.9 percent.
The report also found that the number of new donors fell 10.5 percent compared with the first quarter of 2018, further exacerbating the problem of the sector's reliance on relatively fewer donors making bigger donations; the number of newly retained donors who gave to an organization for the first time in 2018 and gave again in the first quarter fell 7.5 percent on a year-over-year basis; the number of repeat retained donors fell 3.6 percent; and the number of recaptured donors who had previously lapsed but gave in the first quarter fell 1.8 percent.
On a somewhat brighter note, revenue from donors giving less than $250 rose 2.7 percent; however, revenue from mid-level donors giving between $250 and $999 and revenue from major donors giving at least $1,000 fell 1 percent and 2.8 percent, respectively.
"While we don't have any hard data to suggest why this continues to occur, one possibility is that donors who give smaller amounts are less influenced by tax concerns at the end of the year," said AFP president and CEO Mike Geiger. "Many may wait to see what their financial situation is after the holidays and then decide to make 'year-end' gifts in January and February."
"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 Geiger. "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. It's difficult to forecast at this point for the rest of the year, but if the same scenario happens again, we could see growth in giving continue to drop in 2019, perhaps to the point where overall annual giving actually decreases."