Study: First Quarter 2021 Fundraising Beat 2020
The number of donors to charities grew by a projected 10% during the first quarter of 2021 compared to the first quarter of 2020, while the retention of new donors grew by 13.6% during the same time period. Those are two data points in the Fundraising Effectiveness Project’s (FEP) new report, 2021 First Quarter Fundraising Report, that shows fundraising continues to fare well overall.
The Fundraising Effectiveness Project (FEP) is a collaboration among fundraising data providers, researchers, analysts, associations, and consultants. The FEP releases quarterly findings on giving trends, released both via downloadable reports and in a free online dashboard.
Key findings in the 2021 First Quarter Fundraising Report include:
- Overall dollars and donors increased. Giving during the first quarter of 2021, compared to the first quarter of 2020, increased by 6%. Even more notable, there was a 10% rise in donors during Q1—a record level for first quarter numbers during the 10 years of FEP data.
- New donor retention rate increased 13.6%. After a year of strong acquisition in 2020, donors continued to give to the same organizations during the first quarter of 2021.
- Not all organizations fared equally in Q1 2021. Data from the report also shows that the increases in giving do not apply equally to all organizations, with organization size and cause disparities continuing, but not to the same degree seen in 2020. Giving to Human Services and Religious organizations increased, while contributions were down for all other types of charities.
“The overall growth is real, but this doesn’t reflect the typical organization’s experience during this turbulent time,” said Jon Biedermann, chair of FEP and president and CEO of The Biedermann Group. “We also saw this in 2020, where the average growth in donations and dollars was positive, but the median was negative—meaning some organizations experienced some tremendous growth, while others saw anemic or decreasing giving levels,” said Biedermann.
Depending on how long the pandemic lasts, this imbalance in funding could continue and have a significant, long-lasting impact on the sector. Still, despite so many challenges, Americans continue to give, and that generosity gives charities many opportunities to demonstrate their impact to donors and inspire more giving, he said.
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The latest report now offers a more granular segmentation of donors in five categories: Micro (less than $100), Small ($101 – $500), Midsize ($501 – $5,000), Major ($5,001 – $50,000), and Supersize (more than $50,000).
The data shows a 9.7% increase in Micro gifts and a 4.4% growth in Small gifts compared to the first quarter of 2020. However, collectively, the two categories make up less than 12.3% of total dollars.
“Many of the new donors tend to give smaller gifts, which is why donor retention and cultivation are so important,” said Woodrow Rosenbaum, chief data officer of GivingTuesday. “Major donors are critical, of course, but smaller level donors often represent the future of giving for an organization, so it’s important they are nurtured and retained.”
The new quarterly report also features data on organizational fundraising levels by subsector and size. In the first quarter of 2021, Human Service charities were the only type of organizations to see increases in both average and median dollar growth, while other subsectors continued to contract.
The data analysis includes giving details from 9,561 nonprofit organizations based in the U.S. as a subset of the FEP. The FEP’s database of organizations is made up of organizations that raise between $5,000 and $25 million.
The FEP and the Growth in Giving database are both administered by the Association of Fundraising Professionals Foundation for Philanthropy in collaboration with GivingTuesday. The Growth in Giving database includes more than 204 million donation transactions and is continuously updated by fundraising software thought firms (in alphabetical order) Bloomerang, DonorPerfect, and NeonCRM. Additional partners include the 7th Day Adventists, The Biedermann Group, DataLake Nonprofit Research, and DonorTrends (a division of EveryAction).
This article first ran at The NonProfit Times. It is reprinted with permission.