You’ve seen the panic. Numerous sources, including Giving USA and The Nonprofit Times show that giving in 2022 (the most recent year we have figures for) was lower than in 2021.
A year-to-year fundraising drop is uncommon. This is only the 4th time the last 40 years. Worse yet is the amount of the drop: revenue was down 10.5% (adjusted for inflation), and giving by individuals was down 13.4%.
Much of the drop in revenue is caused by unusually high donor attrition. Poor retention is a perennial problem in fundraising, but in 2022, we lost donors like never before.
We don’t have a lot of information yet about 2023, but anecdotally, this year isn’t going great either for many organizations.
Maybe the sky is falling. But I don’t think so.
I think what’s happening isn’t so much a collapse in giving as it is a regression to the mean.
That’s something that tends to happen all over the place. When something is unusual, it tends to return to normal. If you are much taller than your parents and grandparents, you kids will likely be shorter than you. Things tend to move toward “normal.”
It’s happening in fundraising: 2020 and 2021 were record-breaking years for many fundraisers. The pandemic unlocked unprecedented levels of giving. We were all living through a self-evident crisis. Nonprofits of all kinds faced existential crises.
Donors stepped up to make a difference. New donors showed up in unheard-of numbers. Many donors gave larger amounts than ever. Many of us set new personal-best results in our fundraising. Our donors gave more than ever. Many new donors poured in
Now the pandemic is “over” -- at least in the psychological major crisis sense. And fundraising is getting back to normal, regressing to the mean.
The largest drops in donor retention were new and second-year donors -- people who gave for the first time in 2020 and 2021. Now that the crisis is past, many of those never-before donors are returning to their typical state of not giving.
Fundraising these past few years is behaving very much like it does around “normal” disasters (like hurricanes): Giving jumps, driven both by current donors giving more and by a surge in new donors, motivated by the crisis.
Then giving drops back to normal. The difference is that instead of happening over the course of a few weeks, this spike and drop is taking years.
Should you be worried about this drop?
Maybe. Here’s how to tell how worried you should be:
Instead of just comparing 2022 and/or 2023 giving to 2020 or 2021, ignore those years. Compare current giving to 2019 or before.
Many (maybe most) organizations find that current “down” fundraising is still better than 2019 -- which was a pretty good year by pre-pandemic standards. So even though giving is down, you probably kept some of those new pandemic donors, and many of your upgraded donors are staying upgraded.
So while it hurts to be down, you’re actually up, bigger picture.
If your fundraising revenue now is lower than it was in 2019, you probably should be worried. That might indicate that you have a deeper problem than regression to the mean.
If that’s the case, you should take a deep look at your fundraising data and at your messaging to see if you can discover and correct whatever is going wrong.
If I were you, and realized I needed to take a deep look at my fundraising, I’d look for expert help. Here’s where you can get it for FREE: Book a 25-minute consultation with Sean Triner of Moceanic. Sean knows his stuff, and can help you find your way forward if times are tough.
