Driven by increased need during the Covid-19 pandemic, charitable giving grew 10.6 percent in 2020 over 2019.
Despite early concerns that pandemic-induced economic hardship would suppress philanthropy, charities benefited from gifts of all sizes from people in a broad array of income levels. Small donors, however, outdid more affluent Americans.
These results are from the Fundraising Effectiveness Project, which is managed by the Association of Fundraising Professionals in collaboration with GivingTuesday and analyzes donation data from the Growth in Giving Database. The data analysis includes giving details from 2,496 nonprofit organizations based in the United States that raise $100,000 to $10 million annually.
Gifts of less than $250 grew by 15.3 percent over 2019. Gifts of $250 to $999 increased 8 percent. And gifts of $1,000 or more increased 10.4 percent.
One reason for the rise in small gifts could be Congress’s decision a year ago to let everyone take charitable deductions, not just people who itemize, Jon Biedermann, chair of the Fundraising Effectiveness Project, said in a statement. “It’s striking that on December 31, there was a 28 percent increase of $300 gifts, which is exactly the maximum amount a donor can take using the universal charitable deduction.”
The overall number of donors grew by 7.3 percent over 2019. That growth was led primarily by an 18.5 percent in increase in new supporters and a 13.7 percent increase in “recaptured” donors — those who had given to a charity before 2019, did not give in 2019, but then gave to that same charity in 2020.
Charities Struggle to Keep Donors Loyal
Still, donor retention — the percentage of donors who gave to a charity in both 2019 and 2020 — dropped last year by 4.1 percent. The overall 2020 donor retention rate was 43.6 percent, the lowest rate charted since the Fundraising Effectiveness Project began tracking this data. That decline was driven by the 9.2 percent of new 2019 donors who did not support the same charities again in 2020. Fewer than one in five donors who gave to a charity for the first time in 2019 gave to the same charity last year.
These statistics could pose challenges for nonprofits going forward. Even with the strong showing of new small donors in 2020, fundraisers will have to work hard to keep generous supporters to meet pressing needs.
Persuading supporters to give again and again tends to be less expensive than recruiting new ones. Jay Love, chief relationship officer at the fundraising software company Bloomerang, suggests that fundraisers should focus on keeping those new and recaptured donors in the fold. Charities, he said, “need to have a clear plan to follow up and build strong relationships with these donors.”
