Nonprofits became apprehensive after seeing the Giving USA 2018 numbers, particularly as they pertain to the small and mid-size donations upon which many nonprofits depend. That worry continues as data emerges from the Association of Fundraising Professionals’ Fundraising Effectiveness Project’s 2019 Second Quarter Fundraising Report. That report shows a year-to-date decline in charitable giving in 2019 compared to last year, with a 5.8 percent decline in number of donors, a 7.3 percent decline in dollars raised, and a bigger decline in gifts at the middle and larger sizes. (Most organizations, of course, do not receive the mega-gifts that have been distorting the total giving picture, so in this particular study, “larger” gifts include anything over $1000.)
This should alarm most nonprofits, especially as the specter of a recession looms, and if this comes as a surprise, you have not been listening. Giving USA 2018’s report clearly forecasted a long, hard road ahead for future giving. NPQ warned that nonprofits would need to “work harder for their money” the morning the Giving USA 2018 numbers were released. “While the number of households giving is decreasing,” we wrote, “the proportion of money given through mega-gifts against overall giving is increasing. In other words, fewer households of moderate means are giving at all while more of the money being given comes from those who are extremely well off. This is bad news for small community-based nonprofits.”
In that same article, we analyzed data from last year’s FEP study of more than 4,500 nonprofits.
The study found that the number of people who gave in 2018 fell by 4.5 percent while the acquisition of new donors fell by 7.3 percent. For smaller nonprofits without connections to wealth, this trend should be considered a warning, especially within the context of slow or flat growth in individual giving overall.
And now, those figures have fallen again.
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An article in last week’s Greater Baton Rouge Business Report notes that city is experiencing a trend we predicted: a particular impact of this decline on local community nonprofits. Smaller nonprofits depend on individual and local philanthropists to connect with their mission and help support their services. With fewer incentives for individuals to give as a result of the tax overhaul law of 2017, and with the current economy worrying people of moderate incomes, it will be ever harder for nonprofits to attract and grow gifts over this year.
That means we must concentrate. How are our retention rates? Are we engaging donors personally, offering them opportunities to feel a part of the organizations we are building and nurturing? Do we consider our donor programs an afterthought because they are not producing the dollar amounts that compare with grants or contracts? That would be a big mistake. For most of us, donor dollars are unrestricted, given in faith and love, and that brings far more than just cash value on many levels.
There is no doubt that something is happening with donations. Losing them is shortsighted and expensive. In the last recession, it was not the large institutions that starved their donor programs; it was the smaller and mid-size groups. No wonder we are seeing these trends. Our connections need investment now.
Long story short, if nonprofits aren’t recognizing and keeping up with the trends and analysis, they will likely be caught well short this year and even more short in future years. Time is of the essence. That is why it’s vital for all nonprofits to stay current with national and local trends—to be watchful of innovative solutions in other parts of the country, to analyze the data, and to stay curious about federal policies that could impact them.
As the giving landscape continues to be reshaped by technology, the political environment, and economic concerns, it is more important than ever for nonprofits to push themselves and support each other for creative solutions to address these troubling giving trends.