5 takeaways from the Fundraising Effectiveness Project’s 2023 data

The Fundraising Effectiveness Project’s (FEP) Quarterly Fundraising Report analyzes year-to-date trends in fundraising from individual donors, based on sample data from GivingTuesday and the Association of Fundraising Professionals’ Growth in Giving database. Since Candid data is focused on institutional grantmaking, we thought we’d complement that data by highlighting FEP’s findings on individual giving. 

The Q4 2023 Quarterly Fundraising Report, released in April, found significant year-over-year declines across all metrics for 2023, including the number of donors, total dollars raised, and retention rates. Here are five salient findings with implications for 2024 fundraising: 

1. Total dollars raised fell for the second consecutive year 

Based on data from 8,103 nonprofits, FEP estimates that total dollars raised in 2023 were down by 2.8% from the previous year. This marks the second consecutive year of declines after years of increases, including an 8.6% jump in 2020. While fewer dollars were raised from donors of all sizes, the steepest drops were among major donors (who gave between $5,001 and $50,000), down 7.1%, and supersize donors (who gave more than $50,000), down 6.3%. These declines—among those who accounted for only 2.6% of donors but 76.4% of dollars raised—significantly lowered the total. 

Another factor behind the decline was a drop in the frequency of giving, with 70.6% of donors making only one gift, which amounted to 41.8% of total dollars raised. The numbers of donors making two or more donations fell at twice the rate of one-time donors, and only those who made at least seven donations gave more than in 2022. 

2. Only the smallest organizations held off fundraising declines 

Organizations of all sizes saw declines in average year-over-year fundraising growth—except for the smallest (those raising less than $100,000), which saw no change. By contrast, large and very large organizations (those raising between $1 million and $5 million and those raising more than $5 million) saw fundraising revenues fall on average by 7.2% and 6.3%, respectively. 

In terms of median growth, however, the smallest organizations were the hardest hit—down by 13.4%—which suggests significant variation in performance within this category.  

3. The number of donors fell across the board, but a drop in ‘supersize’ donors drove the fundraising decline 

The number of donors to the organizations in this sample fell by an estimated 3.4%—down for the third straight year, though not as precipitously as the 6.3% and 10.7% declines seen in 2021 and 2022. Supersize donors—who represented just 0.3% of donors but 51.2% of total dollars raised—saw the largest percentage drop. The 7.4% decline in the number of supersize donors was the largest driver of the overall decline in fundraising.  

The largest drop in actual numbers was among those contributing less than $500. Given that they represent 83.2% of donors, they also drove 79.3% of the drop in the total number. 

From October through year-end, however, there was a notable uptick in donors. As of September, the number of donors year-to-date was down by more than 10% compared with 2022, but in the fourth quarter, the gap narrowed to about 5%.  

4. While new donors increased, retention rates continued to fall 

In 2023, the number of donors who gave to an organization they had never given to before rose by 2.3%—the first increase in new donors since the first quarter of 2021. The retention rate, by contrast, fell 2.5% overall, continuing the downtrend that began in 2020, though the rate of decline has been slowing since its low point in 2021. Retention rates declined across all donor sizes, but the largest percentage declines were among major and supersize donors. Still, these donors’ retention rates remained more than double that of donors who gave less than $100 (65.8% and 67.9%, compared with 31.4%). 

5. International causes likely led to a fourth-quarter ‘impact spike’ 

In the fourth quarter, organizations in the international and foreign affairs subsector saw, on average, a 51.2% jump in average fundraising growth. All other categories saw declines, including human services (9.7%), environment and animals (10.9%), and arts and culture (12.5%). 

The report notes that this “impact spike”—backed by the rise in the number of donors the same quarter—is “likely attributed to aid and assistance campaigns relating to international conflicts.” It remains to be seen whether this trend continued into 2024. 

Data from FEP’s panel of nonprofits suggests that in 2023, overall fundraising metrics continued on the downward trend that began in 2021. Despite the increase in new donors late in the year, given the specific circumstances behind it, the Fundraising Effectiveness Project’s report suggests that donor retention likely will remain a challenge in 2024. 

This is the first article of a regular feature where Candid insights shares key takeaways from a new research report to encourage a more data-driven approach to the sector’s work. Leave a comment to recommend a report for an upcoming feature.