Decreasing Donor Retention Rates Offset Gains in Giving

July 6, 2017

New research released by the Association of Fundraising Professionals presents a good news/bad news scenario when it comes to trends in charitable giving. While the overall rate of charitable giving increased by 3% in 2016, according to the AFP report, those gains were essentially offset by losses in lapsed donors.

The study, entitled “Fundraising Effectiveness Project”, was conducted by the AFP in conjunction with the Center on Nonprofits and Philanthropy at the Urban Institute, and included anonymized giving data from over 10,800 nonprofit organizations across the U.S. with 8.9 million donors. The data showed gains of $4.893 billion in donations from new, current, and previously lapsed donors. However, $4.625 billion was lost in in reduced gifts and lapsed donors. In other words, for every $100 gained in 2016, $95 was lost through gift attrition. The donor retention rate of 45% was a slight decrease from 2015.

Chairman of the Fundraising Effectiveness Project, Erik Daubert says this trend is cause for concern. “While the overall growth in giving of 3 percent is positive, the millions of donors who do not repeat their giving is very concerning. The fact that nonprofit organizations are losing 55 percent of their donors from one year to another is not a sustainable strategy.” Daubert went on to note that if a for-profit business experienced similar levels of attrition, the company would not survive.

“Now more than ever, it’s important to make smart decisions around fundraising and retention efforts,” Daubert concluded.

To read the full report from the Fundraising Effectiveness Project, click here.

Source: Nonprofit Business Advisor, July 2017, Wiley Periodicals, Inc.


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