A first quarter decline in charitable giving has the Association of Fundraising Professionals worried about the rest of the year, even though first quarter results are frequently disappointing.
The Fundraising Effectiveness Project, created in 2006 by the association and the Urban Institute, monitors charitable giving and found this year’s first quarter results mirrored last year’s data. However, the decline in giving has led to “concerns about the growth of charitable giving for the rest of the year,” the 2019 First Quarter Report said.
“Across the board almost every key metric declined, with the exception of revenue produced by donors giving $250 or less,” the report said.
The total number of donors decreased by 5.7 percent in the first quarter compared with a year earlier, while overall revenue dropped 2.2 percent. The overall retention rate, which measures the number of donors who continue to give to the same organization from one year to the next, also decreased by 0.9 percent.
The number of new donors dropped by 10.5 percent, which the project calls the most troubling statistic from the report.
The same metrics prevailed in 2018 and, although overall giving increased by the end of 2018, the amount of the increase dropped from 8 percent in 2017 to only 1.6 percent last year.
”It’s difficult to forecast at this point for the rest of the year, but if the same scenario happens again, we could see growth in giving continue to drop in 2019, perhaps to the point where overall annual giving actually decreases,” said Mike Geiger, president and CEO of the Association of Fundraising Professionals.
The report noted that the lack of new donors forces charities to rely on fewer donors for more money. The report is based on data including 90.8 million gift transactions from 4,456 organizations from 21.2 million individuals.
A positive note in the report is that the number of donors giving $250 or less increased during the first quarter compared to the same time period last year. A similar increase was found in 2018 over 2017. The increase could be due to the fact that donors of smaller amounts are less concerned with tax consequences, especially under the new tax code, the report said.
Ben Miller, chief analytic officer at DonorTrends, a data resource and consultant for fund raisers, said, “Overall giving did increase in 2018, but that growth decreased dramatically, and it masked a number of concerns, and those weaknesses are showing up again in the first quarter of 2019.