Giving held roughly steady in the third quarter of 2021 compared with the second quarter of that year, according to a new report, easing worries that it may have entered a downward spiral after a stretch of strong growth amid the pandemic and the racial-justice movement.
The data shows giving “leveling off and holding ground,” said Woodrow Rosenbaum, a coauthor of the report. “That was good news.”
The data is from the Fundraising Effectiveness Project, a research effort of the Association of Fundraising Professionals Foundation for Philanthropy and GivingTuesday. The amount of money donated in the first three quarters of 2021 increased 1.4 percent compared with the same period a year earlier, according to the report. A previous version of the report found that the total amount given increased by 1.7 percent in the first two quarters of 2021 compared with the same period a year earlier, a tapering of the strong giving growth seen in 2020 and the first quarter of 2021.
“This feels like something that I expected to see,” said Armando Castellano, founder of Quinteto Latino, a nonprofit that promotes Latino classical music and a trustee for the Castellano Family Foundation. He added that although he was glad to see giving go up slightly, he was concerned that the modest results were a sign that donor interest in responding to current events was waning.
Castellano, who is a donor to several Hispanic-led and Hispanic-supporting charities in Silicon Valley, said he’s hearing from those nonprofits that donor fatigue is starting to set in. Castellano says giving typically happens in waves, and with the pandemic and racial-justice movements maturing, he’s worried about donors pulling back until “the next shiny thing” in philanthropy comes along.
Sam Graddy, diversity giving officer at Jackson Laboratory, a nonprofit biomedical research institution, agreed that philanthropy can move in waves, although he added that it’s not necessarily a bad thing when donors respond to new and pressing needs. Graddy said millennial donors are among those most likely to shift their giving patterns based on current demands, while older donors tend to stick with charities and causes they know and have supported before.
The Fundraising Effectiveness Project calculated that the growth in giving in 2020 was 5.2 percent, an unusually strong year. The data collected so far for 2021 doesn’t indicate a return to 2020 growth levels; rather, it suggests a leveling off, indicating the second quarter was “merely a correction and not the beginning of a new downward trend,” Michael Nilsen, vice president of communications and public policy for the Association of Fundraising Professionals.
Rosenbaum, who is GivingTuesday’s chief data officer, said it’s too early to speculate about fundraising strength in the fourth quarter of 2021, although he noted that GivingTuesday hit an all-time high. An estimated 35 million adults participated in the November 30 giving day in the United States, a 6 percent increase over 2020. Those donors gave an estimated $2.7 billion, a 9 percent increase over 2020.
The report also found:
- The number of new donors retained by nonprofits fell by 13.4 percent in the first three quarters of 2021 compared with the same period the previous year.
- The number of donors who gave seven or more times during the first three quarters of 2021 increased compared with the same period the previous year, while those who gave less frequently decreased. “The most frequent donors are stepping up,” the report states.
Rosenbaum noted that numbers are projections and may change as researchers continue to collect data. The margin of error in the report varies for different data points. The margin of error for the amount of money donated is plus or minus 3 percent. However, Rosenbaum said that historically the projections are very close to final numbers after all the data is collected and tabulated.
The 2021 third-quarter report is based on data from 9,635 charities. The overall data set includes more than 20,000 organizations.
Data for the report was provided by fundraising software providers Bloomerang, DonorPerfect, and NeonCRM. Additional data was provided by the Seventh-day Adventists, the Biedermann Group, DataLake Nonprofit Research, and DonorTrends.
