Money & Business

Fundraising’s Big Conundrum: First-Time Donors Don’t Repeat

By / Sep 7, 2018 (Julia_Sudnitskaya/iStock/Getty Images Plus)

Recent research from the Fundraising Effectiveness Project finds that less than half of all donors to a given organization give more than once—and those that do repeat tend to focus on large organizations.

It’s not just Giving Tuesday: There’s been a lot of momentum around fundraising lately, and in 2017, charities by and large hit some record donation totals.

But what happens this year and beyond? According to a recent study from the Association of Fundraising Professionals, which conducts an annual survey with other organizations through its Fundraising Effectiveness Project (FEP) [registration], that level of success may be hard to sustain due to some foundational issues—particularly, that most donors are one-time supporters rather than repeat donors.

It is so much less expensive to develop and cultivate existing donors than to keep finding new ones.

Giving in 2017 grew 2 percent, to $11.3 billion, but just 45.5 percent of donors gave more than once to the same organization—a number that changed only modestly from 2016. Similarly, just 48 percent of gifts were repeated from the year before.

To put it another way: The growth in donations is mostly due to a larger number of single-time donors. Although the election of President Donald Trump has encouraged donations to many charitable organizations, these gifts appear to represent less a new normal and more a windfall.

“That shows you just how incredibly important it is to get a donor to give a second time,” AFP Vice President of Communications Michael Nilsen said in comments to Fast Company. “And it is so much less expensive to develop and cultivate existing donors than to keep finding new ones.”

The FEP report urges charitable organizations to focus more aggressively on cultivating regular givers: “[T]aking positive steps to reduce gift and donor losses is often the best strategy to increase net fundraising gains at the least cost.”

The study found that smaller charities struggled with fundraising far more than larger ones. Organizations with more than $500,000 in gross revenue experienced 9 percent growth in donations in 2017.  Growth was 2.5 percent for organizations that raised between $100,000 and $500,000. But groups with less than $100,000 in gross revenue saw an 8.2 percent decline in donations.

“What we’re seeing in general is textbook fundraising—larger organizations faring better than smaller ones,” said Steve Birnbaum, vice president of SofTrek Corporation, which contributes data to FEP, in recent comments to The NonProfit Times. “There are always exceptions, but larger charities—with more available resources to direct towards fundraising—will typically do better than small ones.”

Ernie Smith

Ernie Smith is the social media journalist for Associations Now, a former newspaper guy, and a man who is dangerous when armed with a good pun. More »

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