Fundraising, Strategic planning, Mid-level and high-dollar strategy

Building a Results-Powered Strategy: Takeaways From The Fundraising Effectiveness Project’s 2023 Quarterly Report

Trista Murphy

Senior Vice President

Several weeks back, The Fundraising Effectiveness Project (FEP) released their 2023 Quarterly Benchmark Report for Q4, detailing key trends across the entire industry and breaking the results into granular detail – from donor life cycle and donation amount to organization size and cause.

Why it Matters

These quarterly reports are some of the only industry trend analyses that look across all donor audiences, from low-level donors giving $1-$100 to major donors giving $50,000+. While other reports exist and are referenced often by so many of us, FEP’s reports give us a holistic view of giving trends, helping us to see how they relate to and impact one another.

The data set is vast, accounting for more than 8,000 different organizations, with revenue raised ranging from <$100,000 to more than $25 million, 4.8 million donors and $6.5 billion in donations alone in 2023. It doesn’t narrow its view by sector either, giving a wide view of fundraising trends at large.

With its wide scope, deep data, and full-funnel approach, the FEP is a valuable tool for helping nonprofits and the partners that work with them understand what they’re seeing within their own fundraising program by providing the context of giving at large.

What the Latest Report Says

The big headline from the report is that fundraising continued to decline in 2023, which is likely no surprise as it’s the third consecutive year for this trend. This was evident not only in dollars raised but in donors retained and total donors overall. The good news in this? It looks like the declines the industry has been experiencing are starting to level out: This is the most modest decline recorded in recent years.

And while modest declines of any kind might seem like a negative trend, by digging deeper into the report we can uncover some interesting lessons to help us turn these declines around:

  • The impact of small vs. major donors: While smaller level donors (those contributing under $500) were statistically responsible for the decline in donors – this is largely because they also make up the largest group of donors (more than 83%). BUT when you look at dollars raised, these donors actually had the most modest decline of all donor groups. The biggest? Major Donors. They contributed 7% less in Q4 2023 while accounting for 76% of dollars donated. This gives us an important look at where the biggest impact on revenue declines in 2024 are coming from.
  • Cadence in giving: In 2023, one-time donors accounted for a large majority of donors but just more than 41% of dollars raised. Multi-gift donors, however, accounted for only a third of donors overall but they donated almost 59% of dollars raised. For programs working to grow their sustainer base, this is good news.
  • Organization size and type: Here, we also saw results buck trends – smaller, hyper local organizations saw increases in giving while larger organizations were hit hardest. This gives us directional analysis to some things we already know – stories close to home illustrating a mission’s impact to specific communities tend to raise more than broad-reaching impact statements.
  • Worldwide contexts: International humanitarian and global aid organizations also saw increases in Q4 2023, which can be attributed to ongoing and escalating conflict.

What We Can Do

Giving hit a peak in 2020, and for good reason: There was a global pandemic, the economy was strong, and community was at the center of the rhetoric – we were constantly being asked, what can we do for one another and for the betterment of our society?

So now, several years later, we’re in a unique position of opportunity: With access to all this information around what worked in 2020, combined with what we’ve learned about the trends and challenges we’re seeing since then, we can use what we know to build the strategies that will help change these trends. What’s more, reports from long tail forecasters (Lilly Family School of PhilanthropyGiving USA) are showing that we’ll start to see increases in fundraising as soon as next year.

So what can we do to position organizations for growth?

  • Focus on acquisition of high-value donor audiences (sustainers and mid-level) and new donors overall
  • Optimize retention strategies with a focus on meaningful and impact-driven cultivation: What exactly did fundraising dollars accomplish and how? Who exactly did donors help, why, and where?
  • Know and build your donor pipeline. Smaller donors make up the foundation of the fundraising pyramid, so do the research to know who’s primed and ready for the next-level ask – the goal isn’t always getting your next leadership gift, but instead on driving gifts that are meaningful to your donors.

 

The FEP Quarterly Report’s depth of data, combined with its breadth across the entire fundraising industry, gives us important context for how broad giving trends might play a role in what we’re seeing in the results of individual nonprofits. We’re always excited to talk about how resources like these can be used to actualize success for the organizations we partner with. If you want to talk with us more about what this report might mean for your fundraising strategy, send us an email at [email protected], or share your information below:

For more insights into the trends that we saw during Q4 2023, check out our End-of-Year 2023 Digital Fundraising Report. For more about how we’re thinking about fundraising in 2024, give Election Year Strategies for Nonprofit Fundraisers a read.