Strong giving in 2020 and the first quarter of 2021 have begun to taper off, signaling potential volatility as nonprofits head into the year-end fundraising season.
New analysis from the Fundraising Effectiveness Project, a research effort of the Association of Fundraising Professionals Foundation for Philanthropy and GivingTuesday, found that growth in giving slowed in the second quarter of 2021.
Still, while giving has not grown as sharply as it did in 2020, the pace of giving and the numbers of donors have remained roughly the same or even a little higher. The estimated number of donors increased by 0.7 percent in the first half of 2021 over the same period in 2020, while the total amount of money given is projected to have increased by 1.7 percent.
Whether this signals a return to pre-pandemic levels of giving remains an open question. “Are we seeing the beginning of the return to normal — that is, pre-pandemic levels and flows of giving, or will the growth in giving continue in the third quarter of 2021 and beyond?” Mike Geiger, CEO of the Association of Fundraising Professionals, said in a statement.
One indication that donors may revert to their pre-Covid patterns: In a reversal from last year, smaller organizations are experiencing fundraising growth in 2021, while larger organizations are seeing some contraction.
In addition, causes that experienced sharp declines in giving in 2021 — arts and culture groups, international and foreign affairs organizations — are now experiencing either growth or very small losses. At the same time, health and human-service nonprofits, many of which saw exceptional growth in 2020, are now experiencing declines in giving.
Many donors who made first-time gifts last year have continued to give in 2021. The number of newly retained donors increased 22.4 percent over the first half of 2020, the report found.
While not all second quarter data was available for analysis, the report estimates that overall donor retention — the percentage of supporters who gave last year and have already given in 2021 — was 7.2 percent lower at this midyear point compared with the same time last year. Because donor retention was especially strong in the second quarter of 2020, that decrease is to be expected, the researchers say. The percentage of donors who are retained will go up as the year progresses.
The year’s biggest giving days are still to come. Woodrow Rosenbaum, chief data officer of GivingTuesday, says there are reasons to be optimistic. “We are seeing that people are still highly motivated to give,” he said in a statement. “Organizations can use these last few weeks of 2021 to tap into this desire to help and connect with community to finish the year on a strong note.”
