Fundraising Statistics That Should Scare All of Us

Every nonprofit and agency has an interest in what is happening across the industry. Sometimes this tracking and reporting provides the organization comfort when it is in line with the trends, sometimes it causes concern when the trends are negatively different from the organization and sometimes there is a lot of fist pumping when the organization is outpacing the trend.

Now, the direct-marketing industry combined with the nonprofit industry measures many things when it comes to the health of the consumer marketplace, the feelings about charitable giving, the amount of giving, etc. But in 2015, there was a study that showed information in a different way.

I first heard this statistic during a webinar in late-2015, and it was so shocking to me that I immediately discounted it. Yep, even I tried to run from it. Even people on the webinar wanted to know where the statistic came from. Well, after further review—I am still shocked by it but no longer discount it.

In case you are someone who hates bad news and are tempted to stop reading, let me go ahead and give you the statistic—and then urge you to keep reading.

“Every 100 donors gained in 2014 was offset by 103 in lost donors through attrition.”

That’s right. New numbers from the 2015 Fundraising Effectiveness Survey Report do not paint a positive picture of the current state of donor retention.

Never heard of the report? Well, don’t discount it. The Association of Fundraising Professionals and the Center on Nonprofits and Philanthropy at the Urban Institute established something called the “Fundraising Effectiveness Project” to conduct research on fundraising effectiveness and to help nonprofits increase their fundraising results at a faster pace.

The 2015 Fundraising Effectiveness Survey Report summarizes data from 8,025 survey respondents, covering year-to-year fundraising results for 2013 to 2014.

Here are some key findings and statistics from the report:

• $3.611 billion in gifts from new, upgraded current and previously lapsed donors were offset by losses of $3.438 billion through reduced gifts and lapsed donors.

• Every $100 gained in 2014 was offset by $95 in losses through gift attrition.

• The addition of 3.615 million new and previously lapsed donors was offset by losses of 3.713 million lapsed donors—meaning an overall loss of 97,649 donors.

• Growth rates varied greatly based on organization size in 2014:

• Average rate of growth for organizations raising more than $500,000: 10.4 percent
• Average rate of growth for organizations raising $100,000 to $500,000: 3.1 percent
• Average loss of growth for organizations raising less than $100,000: -7.8 percent

• The greatest losses in gift dollars came from lapsed repeat and downgraded gifts.

• The greatest losses in donors came from lapsed new donors.

• The median donor-retention rate in 2014 was 43 percent (the same rate as in 2013). That means only 43 percent of 2013 donors made repeat gifts to nonprofits in 2014.

• The gift or dollar retention rate increased from 46 percent in 2013 to 47 percent in 2014. That means 47 percent of dollars raised in 2013 were raised again by nonprofits in 2014.

• Over the last nine years, donor and gift or dollar retention rates have consistently been weak—averaging less than 50 percent.

There is a lot of information in this report, but let’s face it—the fact that we are “talking about retention” at our conferences, meetings and in executive reports really is not reflecting in the overall industry trends. Now, I know right now some of you are cooking up the argument that this is spread across all different types of charities and maybe even different types of donors.

I don’t really care. A trend is a trend is a trend.

I challenge every single person reading this blog post to do the following four things—soon, this week.

1. Make a list of your top five critical donor segments. A “critical segment” can be defined as high-value donors; it can be that there are a ton of donors in that segment compared to other segments; it could be that these donors are in a crisis mode; etc.
2. Write down what the year-over-year retention was for your top five.
3. Now, write down three things you are specifically doing to positively impact each of those segments in the area of retention. Yep, 15 things should be written down when you are finished—and “ditto” doesn’t count. If “ditto” is one of your answers, then you are not thinking granular enough for each segment.
4. Finally, write down the exact month when you will have enough results to determine if your ideas/tests/pilots/changes worked, and how quickly you can either roll out with that winning change or come up with another idea if the change wasn’t a success.

Sometimes we can plan ourselves to death, but all it does is create a long document that has a long implementation plan. Don’t do that.