Cautious Optimism in Q1 2024 but Reliance on Large Donors Remains

Q1 fundraising performance indicates that the sector has reverted to the trends seen in 2021 and 2022 of large donors driving growth in the sector. Compared to the same quarter last year, when major donors drove an outsized decline in dollars and donor retention, this group is now responsible for the increase in dollars raised. FEP’s latest quarterly data shows the growing variability and irregularity evident in the social sector: including an over reliance on large donors, fluctuating year-over-year retention rates, and an increased focus on international aid and relief campaigns.

However, there is cause for cautious optimism as the negative trends that we have seen since the pandemic are stabilizing across all metrics. According to FEP’s latest quarterly data, we are seeing a slower rate of decline in donor numbers and retention rates, as well as a slight increase in dollars raised, reflecting positive growth despite ongoing challenges in the sector. This trend suggests that while the sector has made strides in our fundraising efforts, there are still persistent challenges with donor engagement and retention. The gradual improvement offers a glimmer of hope for a more robust and resilient giving environment in the future.

The full Q1 2024 report is available here.

The Fundraising Effectiveness Project (FEP) is a collaboration among fundraising data providers, researchers, analysts, associations, and consultants to empower the sector to track and evaluate trends in giving. The project offers one of the only views of the current year’s fundraising data in aggregate to provide the most recent trends for guiding nonprofit fundraising and donor engagement. The FEP releases quarterly findings on those giving trends, released both via downloadable reports at afpglobal.org/fep and in a free online dashboard.

FEP Q1 2024 Report Key Takeaways

• Q1 data shows a slight increase of 4.1% in dollars raised, while reporting a continued decline of -1.3% and -3.0% in donors and retention metrics, respectively. While still negative, the rate of decline in the number of donors appears to be slowing down from the precipitous -10.3% drop in 2022, indicating a potential reversal.
• Conversely, micro-sized donors (those that gave less than 100$) showed the largest drop in performance, decreasing 10.4% while all other donor categories declined 5.2% to 0.8%. This trend mirrors the same quarter last year, indicating that organizations are failing to attract and retain small donors in the beginning of the year, and accounting for nearly 75% of the topline decrease in donors. 
• While most organization sizes have been experiencing a decrease in fundraising totals since 2021, small organizations (≤ $100K) continued to see an increase in dollars raised, performing well above its larger counterparts in fundraising outputs.
• Constituting only 3.5% of total dollars, the “International, Foreign Affairs” cause category saw the largest YOY increase (9.6%), which is likely attributed to aid and relief campaigns caused by international conflicts. 

“While stabilizing metrics provide us with subtle reasons for optimism, we are still seeing persistent variability in donor engagement that is indicative of need for adapted fundraising strategies” noted Woodrow Rosenbaum, Chief Data Officer of GivingTuesday. “Our Q1 FEP data shows that significant challenges still remain for potential recovery in the sector. Developing tactics to encourage donor retention and broader solicitation will be essential in 2024. As the FEP project grows in both providers and sector participants, we believe that we are in the unique position to provide the sector with the tools it needs to tackle these challenges.”

“There appear to be two diverging trends: we are losing broad support from a large number of small-dollar donors, while the International and Foreign Affairs segment is gaining ground with these very same donors,” said Ben Miller, Chair of the Fundraising Effectiveness Project, and SVP of Data Science at Bonterra. “This indicates that the numbers do not reflect a decline in donor generosity, but rather a need for our sector to adapt and figure out new ways to unlock that generosity more effectively.” 

Givebutter Joins FEP Data Providers
We’re excited to announce that Givebutter has joined the FEP as our newest data provider. Their history as an online fundraising software provider and experience with multi-channel fundraising strategies brings more actionable insight to the project, increases dataset fidelity, and further improves reporting integrity.

“Givebutter is delighted to contribute to this collaborative effort, which not only equips changemakers with better insights to craft winning fundraising strategies but also helps nonprofit fundraising platforms like us improve the tools we offer them” announced Max Friedman, CEO of Givebutter. 

FEP reports continue to be made possible by the generous support of existing collaborating data providers, including Bloomerang, Classy, Community Brands, DonorPerfect, Keela, Neon One, and Qgiv. FEP’s partner network also includes data analysis and additional support from Bonterra. We welcome all giving platforms to join our efforts and increase our data coverage, enhancing the accuracy and accessibility of our efforts to provide measured analysis to the social sector.