How Giving Changed — And What That Means for Fundraisers
2020 was an unexpected year in many ways. But it brought some especially interesting developments to charitable giving! The Chronicles of Philanthropy recently published a new report that introduced statistics that are very relevant to know for any professional fundraiser.
Surprisingly, giving went up in 2020, despite the financial hardships that many people experienced because of COVID-19.
Overall, 10.6% more was donated to charities in 2020 than 2019. And interestingly, the bulk of that growth wasn’t big-ticket donations — it was smaller gifts that grew the most!
What dropped, however, was donor retention, or people who continued giving to the same charities in 2020 that they did the year before.
Overall, the 2020 donor retention rate was 43.6 percent — that’s the lowest rate seen since The Fundraising Effectiveness Project started counting!
It’s easy to theorize about the reasons behind this shift. Obviously, the world was swept up in movements for social justice and equality last year, and they sparked a lot of fundraising activity which possibly played a role. Another potential influence is that last year, the US Congress started allowing everyone to deduct their donations, whether or not they formally itemized them.
But what do these figures actually mean for fundraisers? Here are some of my thoughts on the insights behind the trends — and how, as charitable sector professionals, we can do our best to adapt to them.
First of all, it’s pretty interesting that as donations went up, recurring donors dropped out. I think that’s likely the impact of the pandemic, and all the uncertainty, financial or otherwise, many people experienced.
It is likely that in 2020, donors thought really hard about who they were giving to, and carefully assessed whether giving up money was worth it. That means that if charities weren’t making the impact of their donations clear enough, people were likely to stop giving entirely. Think about it — in one of the most challenging economic times in recent history, would you keep giving your money to someone if you weren’t absolutely sure it was making a difference?
To address this issue, I think fundraisers should focus on either telling better impact stories (clearly demonstrating the result of their work) or considering a micro-project model of fundraising in 2020. Micro-projects are all about impact — they’re usually targeted towards helping one specific beneficiary (think saving a puppy or getting one kid some hot lunch).
Furthermore, they encourage repeated, rather than recurring, giving. Micro-projects give your audience a chance to choose to help you charity — and you give them that chance over and over again! For many, that feels like an easier ask right now than automatic, recurring monthly or yearly donations.
Of those who gave to a charity for the first time in 2019, fewer than 1 in 5 came back to do so again last year. It’s likely that many of these donors were spurred to give by external factors, like a friend pushing the cause (happens often with Peer-to-Peer fundraising), trending topics, or a celebrity endorsement. Going forward, charities need to really strengthen their brand story and messaging, so we can invite those first time donors into our circle and make them passionate advocates!
So, what should takeaways for fundraisers be for this coming year? Well, of course, donor retention is important. But what’s truly transformational is recruiting advocates!
When your donors truly care about your cause, and you’ve shown them the difference their kindness can make, they’ll spread the word within their networks, and help you find even more donors. What’s more, they’ll be dedicated enough to help your charity make it through the funding ups and downs.
How do we get there? Storytelling, communicating impact, and a clear brand voice. We have plenty of ideas to help you build that — get in touch with our crowdfunding advisors!