04 Sep Nonprofits had a record-breaking 2017–can they keep it up?
In 2017, people gave more than ever before to charity–with annual donations reportedly up 5% overall and totaling $410 billion. That’s largely because acting generous is both en vogue and a good way to take advantage of tax write-offs. There’s also been a relatively smaller but important Trump Effect, with donors giving heavily to causes ranging from women’s rights to social justice and environmental protection, all of which appear threatened by the administrations conservative, isolationist and deregulatory agenda.
The next question is whether groups that benefited will see that repeat in 2018. Can nonprofits keep the momentum going? New data from the Fundraising Effectiveness Project shows that it isn’t likely without a serious change in organizational behavior. According to FEPs annual analysis of 13,500 charities totaling $68 billion in contributions, the retention rate for organizations receiving repeat gifts from existing donors was about 45%—a number that’s been stayed consistently low for several years now.
Industry-wide, only about 25% of donors over the last decade have actually ever given a second time to the same group, says Michael Nilsen, the vice president of communications and public policy at the Association of Fundraising Professionals, one of several organizations that supported the study. But once they do, their chance of continuing to give goes way up. The returning repeat donor retention rate is about 65%.
“That shows you just how incredibly important it is to get a donor to give a second time,” he says in an email to Fast Company. “And it is so much less expensive to develop and cultivate existing donors than to keep finding new ones.”
Nilsen concurs that the Trump Effect has affected giving, although it’s hard to quantify the exact rate. FEP’s findings show the overall change in the industry to be less strong: an overall increase of 2% among those surveyed, which does not include any donor-advised funds. Either way, smaller groups appear to be getting lost in the shuffle. Groups that received less than $100,000 in contributions also saw their average gift amount drop by 8% while those that gained $500,000 or more saw the average gift size increase by about 9%
“That’s why we’re encouraging charities to focus on new donors and get them to make that second gift,” Nilsen adds. Groups that can make that happen may see exponential gains over time. The real question now is how to inspire that. And among Trump-effect givers at least, whether news-cycle generated outrage alone is a renewable call to action. A recent survey concludes that people who have been battling Trump’s ideals for at least a year may be experiencing advocacy fatigue.
Whatever the organization, Nilsen suggests plenty of classic tactics to spur more action. “Whether it’s a question of newsletters, surveys, finding out why they give, giving them options, sending out prompt thank-you letters and letting them know the impact of their gifts–all of these can be critical to getting that second gift and ensuring that the donor continues to support the cause into the future.”
Source: Fast Company