Nonprofits Continue to Rely on Fewer Donors to Fund Their Missions, Per Latest FEP Data

The fundraising data through September of this year shows that nonprofits continue to raise more dollars from fewer donors. Specifically, the number of dollars donated year over year through the third quarter grew slightly, but the number of donors is still lagging behind, with sharp drops in the number of small-dollar donors. Additionally, donor retention continues its four-year decline.

The Fundraising Effectiveness Project (FEP) releases quarterly reports from data collected from 10 providers, with data analysis and additional support from Bonterra. The latest report includes 4.4 million donors who gave $6.4 billion to more than 12,000 organizations that raised between $5,000 and $25 million.

“I hope that, as a development professional, you look forward to the quarterly results and use them to measure your progress, find inspiration and improve your efforts to attract new donors, retain current ones and strengthen your fundraising outcomes,” Lori Gusdorf, executive vice president of the AFP Foundation for Philanthropy, said in a statement. “Research empowers us to do better, and this FEP data should be one of the go-to resources you incorporate into your strategy to achieve this success.”

While the number of donors dropped 5.3% year-over-year through the third quarter, dollars raised in the same timeframe grew only 0.9% — slowing the growth in dollars earlier in the year. The steep decline in donors in the third quarter is not new. The time leading up to year-end giving last year saw a similar dip before drastically improving — while remaining negative — in the fourth quarter.

Consistent with years past, donors declined in the third quarter. | Credit: Quarterly Fundraising Report: Q3 2024 by Fundraising Effectiveness Project

Here are three areas where nonprofits must focus in 2025, based on the latest FEP data.

1. Prioritize Small-Dollar Donor Acquisition

As the economy recovers, larger donors may rebound more quickly, but targeting smaller donors is an important tactic to keep your fundraising program well-rounded. Researchers encouraged nonprofits to improve small-donor acquisition in their fundraising strategies.

The data shows that small-dollar donors, who experienced a 12.4% year-over-year drop through the third quarter, are one of the main drivers of the overall dip. Accounting for more than half of total donors, those gifting $100 or less are responsible for two-thirds of the loss in donors in the third quarter. Donors who gave more also experienced declines, but their year-over-year losses were much lower.

Micro donors — those gifting $100 or less — experienced a 12.4% year-over-year drop through the third quarter. | Credit: Quarterly Fundraising Report: Q3 2024 by Fundraising Effectiveness Project

Similarly, though the small-dollar donor only contributes 1.8% of total dollars, these donors decreased their total giving by 12.6% — the largest drop for any size donor.

When it came to a donor’s life cycle, all segments were down. Closely mirroring 2023 through the third quarter, the numbers for donors acquired this year and those acquired last year that were retained showed the largest declines. However, at the same time last year, the drops were much deeper, which is encouraging, according to the report. On the monetary side, these donors also saw the biggest declines.

New donors had a 11.5% year-over-year drop. Since they comprise 37.5% of donors, the loss in acquisition is the other big contributor to the decline in small-dollar donors.

2. Improve Retention Across All Donor Segments

Though easier said than done, nonprofits should focus on donor retention in the new year.

Donor retention dropped 4.6% through the third quarter, with the lowest point (5.6%) occurring in September. This year marks the fourth straight year that retention has decreased in the third quarter. However, the third quarter of 2024 also marks a reversal, as third-quarter retention rate reductions were becoming less severe until this year. Researchers attributed this to a difficulty in re-engaging donors in the third quarter.

Donor retention rates indicate that nonprofits had difficulty re-engaging donors in the third quarter this year. | Credit: Quarterly Fundraising Report: Q3 2024 by Fundraising Effectiveness Project

Donors who were retained for two or more years had the lowest year-over-year decrease, with a 7.8% drop. However, they make up 40.1% of the donor base, so that small dip had a big impact, accounting for one-third of the donor decline. The drop in dollars given by repeat retained donors also had the smallest reduction — tied at a 4.9% drop with recaptured donors — but repeat retained donors alone were responsible for more than half of the total decline in dollars raised. This group’s retention rate also declined 4.6%, whereas new donors’ retention rate fell 9%.

While more than half of donors giving more than $5,000 have been retained, nonprofits have struggled to retain donors who give less, with retention rates dropping 6% to 7% depending on the gift size.

3. Encourage First-Time Donors to Become Sustainers

The importance of landing a second gift holds true, as one-time donors had a 18.6% retention rate. However, that rate jumped to 38.1% with two gifts, 61.2% with three to six gifts and 84.3% with seven or more gifts.

Since the second quarter, nonprofits slowed the year-over-year churn on sustainers making seven or more gifts. These loyal donors’ year-over-year dip rose 8.2 percentage points, but remains at a 6.2% year-over-year decline. In the same timeframe, this group grew from 3% to 10.9% of total donors.

On the opposite end of gift frequency, the number of one-time donors declined 10.4%. Consistent with the second-quarter comparison, one-time donors were responsible for 75% of the overall donor reduction year over year for the third quarter.

The number of one-time donors declined 10.4% year over year. | Credit: Quarterly Fundraising Report: Q3 2024 by Fundraising Effectiveness Project

However, when it comes to the dollars sustainers give, researchers suspect there is greater stability due to smaller declines than seen for dollars given by one-time donors, who contribute almost half of total dollars raised and had a 6.2% year-over-year drop.

“The ongoing decline in donor numbers and retention signals an urgent need for strategic recalibration,” Woodrow Rosenbaum, chief data officer of GivingTuesday, said in a statement. “Our Q3 FEP data underscores the critical importance of engaging and retaining small donors, who form the backbone of sustainable giving. Focusing on innovative strategies to activate new donors and deepen existing relationships will be pivotal in addressing these challenges and fostering a stronger, more resilient sector in 2025.”