6 Key Findings From Fundraising Effectiveness Project Report’s Q1 2024 Data

For several years, nonprofits have been facing declines in both dollars and donors. However, the latest results from the Fundraising Effectiveness Project suggest that “cautious optimism” may be in order. Declines in donor numbers and retention rates have slowed, and dollars raised has gone up slightly in the first quarter of 2024.

Regardless, the industry is still facing several challenges when it comes to fundraising.

The Fundraising Effectiveness Project is a collaborative effort between fundraising data providers, researchers, analysts, associations and consultants to offer insights into giving trends. 

Here’s a look at the main takeaways from the Fundraising Effectiveness Project’s Q1 2024 report.

1. Dollars and Donors Improve

Year over year, fundraising dollars are up 4.1% in the first quarter of 2024. Unlike trends from the first quarters of 2022 and 2023, dollars were slow to accumulate at the beginning of 2024, then picked up speed in February and March, according to the report.

Compared to the first quarter of 2023, the number of donors is down by 1.3%. The rate of decline, however, is leveling out.

Similarly, the report indicated an estimated 3% drop in donor retention between the first quarter of last year and this year. This is relatively stable compared to the last two years, where retention rates started high in January then tapered off at the end of the first quarter.

Donors, dollars and retention rates in Q1 of 2024 may indicate that fundraising may begin to trend upward. | Credit: "Fundraising Effectiveness Project Quarterly Benchmark Report" by GivingTuesday

Combined, these data suggest that nonprofits may see dollars, donor number and retention begin to level out after years of declines.

“One of our major concerns for for a number of quarters has been this quite substantial drop in participation and to see that beginning to flatten out does give us some reason to be optimistic about what the opportunities are,” Woodrow Rosenbaum, chief data officer of GivingTuesday, told NonProfit PRO in an exclusive interview. 

Other research from GivingTuesday has indicated that people are ready and willing to give yet not everyone is being asked. Rosenbaum added, “Now is the time to really invite more people, more often, into our missions. If we do so, we think we'll see a good result.”

2. Micro Donors See Steep Drop

Despite the potential positive outlook, nonprofits are still facing some substantial challenges with their donors. For instance, micro donors — donors who contribute up to $100 to an organization — account for 59.3% of all donors.

Out of all donor size segments, the number of micro donors dropped most from Q1 of 2023 to the same period in 2024. | Credit: "Fundraising Effectiveness Project Quarterly Benchmark Report" by GivingTuesday

In the first quarter of 2024, there was a 10.4% drop in the number of micro donors year over year, accounting for almost three-quarters of the cumulative decrease in donor numbers. This trend is similar to that seen in the first quarter of 2023, when small donors — those giving $101 to $500 — dropped 14% year over year.

For some time now, many nonprofits have put a primary focus on stewarding larger donors. This can leave smaller donors with more transactional engagement, contributing to the drop we see in the report. 

“When we acquire those small donors, and they don't hear from us again until we're just asking them for more money a year later, it's just not a very strong retention program,” Rosenbaum explained. 

He recommended communicating with your smaller donors more often and making sure you’re not always saying the same thing. Additionally, since people prefer to engage in different ways, it’s beneficial to provide multiple pathways for supporters, including options for giving, volunteering, and advocacy. 

3. Supersize Donors Have Smallest Retention Decline

While donors of all sizes experienced similar declines in retention year over year, the smallest drop was among supersize donors — those giving more than $50,000 — at 3.9%.

This is notable because every other segment, from micro to major donors, experienced greater drops in retention in the first quarter of 2024 compared to the same period last year.

Supersize donors had the smallest year-over-year drop in retention. | Credit: "Fundraising Effectiveness Project Quarterly Benchmark Report" by GivingTuesday

4. Major Donor Retention Is Lower Than Normal

When looking at the percentage of donors retained by donation size, it is typical that retention increases with donor size. In the first quarter of 2024, this is not the case.

Micro donors have a 10.3% retention rate so far this year, which increases with each segment until you reach major donors (those giving between $5,000 and $50,0000). These donors have a retention rate of 28.6% so far this year, which is lower than the 31.4% retention with midsize donors.

When the data is presented this way, it’s easy to interpret a dip in major donor retention. However, Rosenbaum points out that when we review data over a longer period, we see that major donors are returning.

“[If] your organization is on an annual cycle, retention of large donors maybe looks not as good as it actually is. We shouldn't expect people to necessarily give on an annualized basis, particularly when they're giving a lot,” he said.  

5. Fundraising Performance Increased for Small Nonprofits

Year over year, most organizations experienced a decrease in their average fundraising performance. The only increases were seen in nonprofits raising less than $100,000 and those raising between $250,000 and $1 million. Compared to the first quarter of 2023, the former saw a 26.9% increase in the same period of 2024, while the latter experienced a 12.9% year-over-year increase.

For the small nonprofits, this was “likely driven by a few outliers that have performed very well in Q1 2024, demonstrating an increased variance in fundraising performance among the smallest organizations,” according to the report.

6. International/Foreign Affairs Nonprofits Had Largest Dollars Increase

While human services organizations raised the largest proportion of dollars (30.2%), nonprofits that focused on international/foreign affairs saw the largest uptick in dollars raised compared to quarter one of 2023 at 9.6%. This is likely due to ongoing aid and relief efforts related to international conflicts.

However, it’s significant that the median amount of funds raised per organization decreased, which implies that international/foreign affairs nonprofits generally performed worse while a few organizations in that category performed “exceptionally well,” according to the report.