Mike’s Monday Message: Diversifying Our Donor Base

The Fundraising Effectivness Project (FEP) is an important part of the AFP US Foundation for Philanthropy and provides unbiased research for our sector. Throughout much of 2021 and 2022, FEP reports showed that our number of donors was on the decline, but total dollars donated was still holding steady, despite this shrinking donor base. In the Q4 report of 2022 however, a strong decline in dollars from major donors, combined with the continued decline from small donors, finally led to a total overall decrease in charitable or donated dollars.    

Last month, I wrote a Mike’s Message about the 2022 Giving USA report, which confirmed these same trends. Now, the Q1 2023 FEP report has just been released and it’s clear that these challenges are very much still at the forefront in 2023.    

A few key highlights from this report:  

• Major donors accounted for nearly three quarters of total dollars donated and they donated nearly 10% less in Q1 2023, contributing greatly to that overall dollars decline. 
• New donor counts fell by nearly 20% and new donors gave 34% less in Q1. 
• Retention decreased across all donor categories in Q1, with recaptured donor retention falling almost 20% from an already low level. 

These results are concerning, but they also present an opportunity. Relying solely on major gifts from long-standing donors is not a sustainable long-term strategy. The fundraising community needs to be aware of this and we need to adapt our strategies to encourage broader engagement with donors at all levels. Now is our chance to evaluate our current processes and build a more diverse and inclusive donor base, setting our organizations up for future success.  

So how do we do that?   

I would encourage everyone to first evaluate your organization’s sources of funding and how this has changed over time, to see how you compare to the sector. This will help you determine what to prioritize. Once you know what you need to work on, you can find resources available through AFP to address these specific challenges.   

For example, AFP offers a vast library of live and on-demand webinars - for example; 

• How to Maximize Donor Acquisition in a Challenging Economy
• Don’t Just Slap a Flag On It And Call It Inclusive: Understanding Your LGBTQIA+ Donors and Community
• Why Donor-Advised Funds are Changing the Game in 2023 

AFP members can also take advantage of exclusive access to Advancing Philanthropy articles, which are available anytime online. Take a look at these;

• Why Acquisition is the Lifeblood of Nonprofits
• Do Your Acquisition Letters Appeal to New Donors?
• Why Lived Experience Matters in Fundraising

There’s a lot of great content readily available to you on the AFP website that can help you authentically appeal to a diverse group of new donors. 

So yes, the trends are concerning. But it is not the end of the world, if we continue to help each other develop new strategies that can grow and diversify our donor base. 

If you have any questions or comments, as always, please feel free to email me at mike.geiger@afpglobal.org or connect with me directly on Twitter at @AFPMikeGeiger. I’d love to hear from you.