The famine before the feast

The Fundraising Effectiveness Project Q3 report is out and, as you might guess, it’s almost entirely good news.  Year-over-year, from January to September, we’ve seen:

  • A 6% increase in total donors
  • An 8% increase in donations
  • A 12% increase in new donors
  • Growth across giving levels, from under $250 to over $1,000

Hopefully these new donors will move through our programs like a large meal through a snake, where you can see a bulge in results for years to come.

But alas, before we get to this increase in donors, we must survive the ghosts of end-of-year-giving past.  In 2019, new donors were down six percent year-over-year.  In 2018, they were down seven percent.  And in 2017, they were down 19 percent.

In short, even if we do exceptionally well in Q4—and I anticipate we will—we will still not have as many new donors as we did coming in in 2017.

And the 2020 Q3 report has some additional bad news: our retention rate for those donors who came in in 2019 is down eight percent.  In fact, at this rate, we won’t retain even 20% of last year’s new donors for the first time since such statistics have been gathered.

So we had six percent fewer new donors coming into 2020 and we are retaining an even smaller proportion of them than before.  This speaks to a greater fluidity in giving in 2020—if you hadn’t already given a second gift to a charity, you were still charitable this year but perhaps not to the same nonprofit as before.

Let’s play this out for file dynamics.  We’ll have on average fewer multi-year donors (boo! hiss!) and an influx of new donors (yay! huzzah!).  Since new donors don’t retain as well as established donors, we should expect that overall retention rates will fall in 2021 even if we make improvements to retention of new donors, multi-year donors, or both.

This is partly a nice problem to have.  It’s a refreshing change from the past couple of years where we had retention losses and fewer new donors.

But it means that it’s important that we both plan for an overall retention drop and take steps to mitigate the damage.  That’s why we put together a Retaining the COVID-19 Donor white paper, so you can have a plan before the ball drops and we can put 2020 behind us.

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