
2023 FUNDRAISING REPORT CARD ANNUAL REVIEW
FUNDRAISING CLIMATE CHANGE
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Introduction
What’s in a name?
In my book titled Engagement Fundraising (published back in 2018) I briefly described the changes affecting nonprofits and their fundraising staff. The label I applied to the trend was ‘Fundraising Climate Change.’
I had been monitoring the metrics for some time and, while many on the frontlines were aware of the problem, too many others weren’t noticing what was happening.
So I built the Fundraising Report Card.
I decided to invest in building an application fundraisers could use to view and analyze their metrics quickly and easily, and I have been giving it away ever since. Thanks to the data fundraisers supply, we can provide this summary report to help you and your colleagues understand what’s happening — and how you can take action. I hope you find it useful. Of course, your feedback is always welcome.

FUNDRAISING CLIMATE CHANGE
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Proof that it’s happening
2022 was a terrible year for fundraisers and the trend continued in 2023.
According to Giving USA (The Annual Report on Philanthropy), total giving in 2022 declined 3.4% in current dollars — down a whopping 10.5% after adjusting for inflation.
Additionally, although the Fundraising Effectiveness Project data lags behind ours, late last year they released their Q1 - Q3 findings reporting that total giving in 2023 so far had declined 1.1% in current dollars and the number of people giving declined by 7.6%.
Giving USA: The Annual Report on Philanthropy, is published by Giving USA Foundation, a public service initiative of The Giving Institute. It is researched and written by the Indiana University Lilly Family School of Philanthropy at IUPUI.

IMPORTANT NOTE: Total charitable giving has fallen only three other times in the last 40 years in current dollars: 1987, 2008, and 2009.
FUNDRAISING CLIMATE CHANGE
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Proof that it’s happening
The number of donors in the U.S. has been shrinking
Some researchers began studying this phenomenon back in 2003, concluding that nonprofit mergers were partially to blame. However, subsequent studies and articles have found that people are simply dropping out of giving altogether. The number of donors in the U.S. has fallen yearly by between 1% and 5%, depending on the source.

FUNDRAISING CLIMATE CHANGE
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Donor disappearance isn’t the only problem
Donor and revenue retention rates are dropping
According to MarketSmart’s Fundraising Report Card, a free application that analyzes over $145 billion in donation revenues for more than 15,000 nonprofits daily and provides sector benchmarks, both donor and revenue retention rates are on a downward trajectory.

Daily analysis of $145 billion in charitable giving
using data from 15,000+ organizations
FUNDRAISING CLIMATE CHANGE
Hard copies available on Amazon.
Free digital & audio versions
available here.

And there’s more...
Other metrics are declining too
First time, reactivated, and repeat donor retention rates are trending downward.
NOTE: You can view your metrics in seconds using our Fundraising Report Card.

Daily analysis of $145 billion in charitable giving
using data from 15,000+ organizations
FUNDRAISING CLIMATE CHANGE
Hard copies available on Amazon.
Free digital & audio versions
available here.

One bright spot is no more
The average donation amount was growing
The average donation amount had increased by 21.5% over the past few years thanks to larger gifts from wealthy donors. However, after reaching a peak of $357.58 in 2022 the average donation dropped 8.37% in 2023 to $327.66.
Note that the Blackbaud Institute’s research concluded that the average donation reached $737 in 2020 (although their data likely reflects data found in their customers’ CRMs which leaves out many smaller organizations).
https://institute.blackbaud.com/charitable-giving-report/overall-giving-trends/

Daily analysis of $145 billion in charitable giving
using data from 15,000+ organizations
FUNDRAISING CLIMATE CHANGE
Hard copies available on Amazon.
Free digital & audio versions
available here.

ALL SECTORS
Average lifetime value among low dollar
donors in all sectors is only $46.02
A terrible return on your fundraising investment
Although most fundraising shops spend the majority of their marketing dollars on generating low dollar (under $100) donations, the lifetime value (LTV) of those donors is meager ($46.02) — especially when compared with the LTV of over $5,000 donors ($77,672.69).
January 2024

Daily analysis of $145 billion in charitable giving
using data from 15,000+ organizations
FUNDRAISING CLIMATE CHANGE
Hard copies available on Amazon.
Free digital & audio versions
available here.

BY SECTOR
HUMAN SERVICES SECTOR lifetime value among low-dollar donors is only $45.38
Based on $12,281,299,952.60 analyzed.
January 2024

Daily analysis of $145 billion in charitable giving
using data from 15,000+ organizations
FUNDRAISING CLIMATE CHANGE
Hard copies available on Amazon.
Free digital & audio versions
available here.

BY SECTOR
HEALTH SECTOR lifetime value among low-dollar donors is only $36.49
Based on $10,034,459,353.90 analyzed.
January 2024

Daily analysis of $145 billion in charitable giving
using data from 15,000+ organizations
FUNDRAISING CLIMATE CHANGE
Hard copies available on Amazon.
Free digital & audio versions
available here.

BY SECTOR
EDUCATION SECTOR lifetime value among low-dollar donors is only $52.75
Based on $10,601,630,803.15 analyzed.
January 2024

Daily analysis of $145 billion in charitable giving
using data from 15,000+ organizations
FUNDRAISING CLIMATE CHANGE
Hard copies available on Amazon.
Free digital & audio versions
available here.

BY SECTOR
RELIGION SECTOR lifetime value among
low-dollar donors is only $50.78
Based on $10,601,630,803.15 analyzed.
January 2024

Daily analysis of $145 billion in charitable giving
using data from 15,000+ organizations
FUNDRAISING CLIMATE CHANGE
Hard copies available on Amazon.
Free digital & audio versions
available here.

BY SECTOR
ENVIRONMENT & ANIMALS SECTOR lifetime value among low-dollar donors is only $44.97
Based on $8,726,138,539.40 analyzed.
January 2024

Daily analysis of $145 billion in charitable giving
using data from 15,000+ organizations
FUNDRAISING CLIMATE CHANGE
Hard copies available on Amazon.
Free digital & audio versions
available here.

BY SECTOR
PUBLIC & SOCIETY BENEFIT SECTOR lifetime value among low-dollar donors is only $34.64
Based on $3,701,585,734.85 analyzed.
January 2024

Daily analysis of $145 billion in charitable giving
using data from 15,000+ organizations
FUNDRAISING CLIMATE CHANGE
Hard copies available on Amazon.
Free digital & audio versions
available here.

BY SECTOR
INTERNATIONAL SECTOR lifetime value among low-dollar donors is only $46.05
Based on $2,770,376,749.37 analyzed.
January 2024

Daily analysis of $145 billion in charitable giving
using data from 15,000+ organizations
FUNDRAISING CLIMATE CHANGE
Hard copies available on Amazon.
Free digital & audio versions
available here.

BY SECTOR
ARTS, CULTURE & HUMANITIES SECTOR lifetime value among low-dollar donors is only $37.73
Based on $1,953,589,416.93 analyzed.
January 2024

Daily analysis of $145 billion in charitable giving
using data from 15,000+ organizations
FUNDRAISING CLIMATE CHANGE
Hard copies available on Amazon.
Free digital & audio versions
available here.

BY SECTOR
OTHER SECTOR lifetime value among low dollar donors is only $47.98
Based on $36,071,533,536.57 analyzed and includes all the organizations that don’t fit neatly into the preceding categories.
January 2024

Daily analysis of $145 billion in charitable giving
using data from 15,000+ organizations
FUNDRAISING CLIMATE CHANGE
DECODING
THE DATA
FUNDRAISING CLIMATE CHANGE
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The 80/20 Rule is dead
Fewer donors are supplying most of the revenue
Many in the sector used to say they would expect 80% of an organization’s revenue to come from 20% of its donors. But now it’s more like 68.43%/.77%.
Just .77% of donors (those giving more than $5,000) constitute more than two-thirds (68.43%) of total donation income, whereas nearly 76.12% of donors (giving less than $100) supply only 6.33% of the funds received.
Donors giving over $5,000
= .77% of an org’s donor base
but make up 68.43% (just over 2/3)
of all donation revenue
Vs.
Donors giving under $100
= 76.12% of an org’s donor base
but make up only 6.33% of all
donation revenue
Daily analysis of $145 billion in charitable giving
using data from 15,000+ organizations
FUNDRAISING CLIMATE CHANGE
Hard copies available on Amazon.
Free digital & audio versions
available here.

Something is out of whack!
Why is this happening?
One might wonder, “How can it be that donors are ‘disappearing’
when the population in the U.S. continues to increase by .6% to
1% each year?”
Population increasing +.6% to 1% per year

FUNDRAISING CLIMATE CHANGE
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It’s not that older donors are passing away
More people are moving into the prime giving ages
The number of people at or above age 65 is expected to jump quickly from 60 million to around 75 million in 2030, growing from approximately 15% of the U.S. population to 20% (and again to about 85 million or 23% of the U.S. population by 2050).
65+ population expected to continue climbing

FUNDRAISING CLIMATE CHANGE
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People are spending money
But they aren’t making donations
More and more people are dropping out of giving and spending
their hard-earned dollars on products like coffee instead.

FUNDRAISING CLIMATE CHANGE
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Your facing more competition
The number of charities in the U.S. continues to rise
You are not only competing with businesses like Starbucks for your donors’ (consumers’) share-of-wallet. Charities can be launched almost instantly from anyone’s kitchen table. As a result, the number of charities in the U.S. doubled from 2001 – 2015 and it is likely that the figure will only to continue to grow.
Nonprofits have never been easier to launch.


https://usafacts.org/articles/how-many-nonprofits-are-there-in-the-us/
FUNDRAISING CLIMATE CHANGE
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Donor-advised funds are detouring your donors
The number of DAFs in the U.S. continues to rise
The National Philanthropic Trust Donor-Advised Fund Report stated that the number of individual accounts more than quadrupled over the past 5 years from 463,622 to 1.949 million while assets held more than doubled.

FUNDRAISING CLIMATE CHANGE
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What’s going on?

FUNDRAISING CLIMATE CHANGE
Hard copies available on Amazon.
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Reason 1: Why donors are disappearing
Trust in nonprofits is sinking
In 2017 Give.org reported that trust in charities was waning with 32% of survey respondents stating that they trust charities less than they did 5 years ago. Then, in 2018 the Edelman Trust Barometer found that trust in non-government organizations (NGOs) dropped by 9% in the U.S. with a more pronounced decrease (-18%) among the ‘informed public’ which is more likely to be highly educated and, in turn, more philanthropic. This was the first time nonprofits were found to be trusted less than private sector businesses by the ‘informed public.’ Businesses are still trusted more than NGOs according to the 2023 trustbarometer report.


FUNDRAISING CLIMATE CHANGE
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Reason 1: Why donors are disappearing
Trust in nonprofits is sinking
Independent Sector released a report titled Trust in Civil Society. This quote from the authors says it all:
“After seeing years of small trust declines in line with other major institutions, nonprofit trust dropped by a statistically significant 4-points in 2023. This was the largest year-over-year change in trust of any institution tested.”


FUNDRAISING CLIMATE CHANGE
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Reason 2: Why donors are disappearing
Interest in and devotion to religion is declining— fast
Many studies have found that religion is among the top
influencers that inspire charitable giving. However, our society is
becoming more secular and giving to religion as a share of total
giving has been in decline.
Nevertheless, according to the National Philanthropic Trust, in
2022 the majority of charitable dollars went to religion (27%),
human services (14%), education (13%), grantmaking
foundations (11%) and health (10%).


FUNDRAISING CLIMATE CHANGE
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Add this to your mix of challenges
Communication channels have been fragmenting
Of course, your supporters want their beloved nonprofits to communicate with them. However, communication requires money. And these days, as the number of channels keep multiplying, nonprofits are struggling to communicate with their supporters through the ever growing number of channels they use.


FUNDRAISING CLIMATE CHANGE
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People are preferring autonomous decision-making
Donors have become much more resourceful and self-reliant
Penelope Burk, author of Donor Centered Fundraising, explained how donors are changing in an article in the Association of Fundraising Professionals flagship magazine (Advancing Philanthropy, April 2019) wherein she said that only 18% of bequest donors had a gift officer. And, among those donors, the majority hinted that they didn’t need much help from them.

FUNDRAISING CLIMATE CHANGE
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And the biggest challenge of all
People are becoming less accepting of interruptive tactics
Most supporters don’t like getting overwhelmed by solicitations in their mailboxes. Many get annoyed by telemarketing when they are sitting down for dinner with their families. And spam is universally detested.
Interruptive tactics diminish trust.
Yet fundraising operations continue to deploy them, and the result is reduced retention rates and more donor defection.
NOTE: Just because nonprofits were excluded from the CAN-SPAM ACT (signed into law in 2004) doesn’t mean that it’s ok to send email to people who haven’t opted-in for it.

FUNDRAISING CLIMATE CHANGE
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So what should you do?
More of everything isn’t the answer
The climate for fundraising has changed, so doing more of the same old, interruptive communications and arm-twisting efforts won’t solve your revenue problems. In fact these days, doing more is likely to drive even more donors and supporters further away


HOW TO
TAKE CONTROL
FUNDRAISING CLIMATE CHANGE
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Amazon. Free digital & audio
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Instead, try this!
Support your supporters — deliver value!
Stop spraying and praying; start providing value instead— especially when communicating with high capacity, philanthropic-minded supporters and donor prospects. Believe it or not, the more you give, the more you’ll get! So develop a giving mindset. Be fair and respectful.
Give your donors control over whether or not they receive messages from your organization by asking them to grant you permission to opt-them-in to communications. Then deliver non-solicitous opportunities for them to engage with your cause and self-navigate the education, involvement and gift consideration stages conveniently on their own with no pressure. If you do, they’ll reward your organization with larger donations, greater loyalty and even legacy giving.

FUNDRAISING CLIMATE CHANGE
Hard copies available on
Amazon. Free digital & audio
versions available here.

How to give to your supporters
First, uncover their interests and needs
Stop worrying so much about your needs and case for support. Instead, consider discovering each of your supporters’ cases for giving. Uncover why they care along with their interests, desires, wants and needs.
Then, ask them in which stage of the consideration process (for giving) they reside. All of this (and more) can be uncovered with a donor survey. Believe it or not, the demand for this kind of outreach among your supporters is pent-up. They’re tired of being asked for money and they’d be thrilled if you’d ask them about them!
NOTE: MarketSmart developed the most powerful donor survey platform ever created and hundreds of organizations like yours use it to help their supporters self-qualify and, later, self-navigate the decision-making process after they’ve opted-in to automated cultivation communications. To learn more about how it works and how you can benefit, just go to www.imarketsmart.com or email us at info@imarketsmart.com.

FUNDRAISING CLIMATE CHANGE
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versions available here.

Next, deliver value in line with what they told you
Show ‘em that you know ‘em
Everyone likes to feel that they’ve been heard. Yet, unfortunately, most organizations only engage in one-way communications with their supporters — solicitations!
When you send highly relevant, hyper-personalized, timely messages that provide value in line with each donor’s wants, needs, passions and interests (along with special attention paid to where each donor resides in the consideration continuum), donors engage and results skyrocket.

FUNDRAISING CLIMATE CHANGE
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Then let them take the wheel
Give them control over the decision-making process
Your supporters will feel respected and secure when you give them the opportunity to take command of the decision-making process. That’s why it’s important for you to ask for permission and allow them to opt-in before you engage with them on a deeper level.
Then, once they’ve opted-in, make information accessible so they can educate and immerse themselves in the value you can provide to them (in the way of good feelings and fulfilment they aim to derive from their involvement with your cause). And don’t forget to make it easy for them to opt-out too. That’s the fair way to treat people.

FUNDRAISING CLIMATE CHANGE
Hard copies available on
Amazon. Free digital & audio
versions available here.

Automate and scale one-to-one cultivation
Leverage technology to make your supporters feel good
Marketing automation (or, fundraising automation) is a relatively new way to leverage technology to deliver 1-to-1, hyper-personalized, highly relevant communications to supporters. It’s a game-changer for overworked fundraisers because it lets technology do what’s time-consuming and tedious (researching donor interests, writing communications, and disseminating cultivation and stewardship messages) so fundraisers can do what they do best— build relationships with hi-value supporters and help them make navigate their individual decision-making processes.
It’s powerful and the organizations using it properly are already lowering costs and riding the wave to success. They are sidestepping fundraising climate change and delivering value in line with interests at scale.

FUNDRAISING CLIMATE CHANGE
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The decision is yours
Make no mistake, there will be winners and losers
Amidst this turbulent and transformational era of fundraising climate change, now is the time! Will you leverage technology to increase revenues as you lower costs? Or, like encyclopedias, taxi cabs, and video stores, will you ignore it and put your organization or institution in peril?

FUNDRAISING CLIMATE CHANGE
Hard copies available on
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You can win
You can be the fundraiser you always wanted to be
You, your board, your leadership, your staff and your donors can be happy. But only if you take action.
Help your teams focus on what they do best at low cost — building personal relationships with high-value donors, facilitating their giving experiences, and ultimately helping them find meaning in their lives.

FUNDRAISING CLIMATE CHANGE

Hard copies available on
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Three strategies for success
1. Invest more in what is now the 68.43/.77
Many nonprofits spend most of their fundraising budget on efforts focused on acquiring low-dollar donors (76.12% of an organization’s list). Yet those donors only make up 6.33% of all their donation revenue year after year. Meanwhile, 68.43% of their revenue (on average) comes from just .77% of their donor base.
We realize that you need to acquire new donors. But a bottom-heavy budgetary arrangement leaves big-dollar opportunities neglected. That’s why we recommend re-balancing your budget with greater focus on the 68.43/.77 to yield exponentially greater returns on your investment dollars. Don’t forget, high-dollar donors retain at a much higher rate compared to low dollar donors (37.75% vs. 17.88%) and their lifetime value is over $77,672 (vs. $46) on average.


FUNDRAISING CLIMATE CHANGE

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Three strategies for success
2. Support your supporters
Keep in mind that marketing aimed at low dollar donors is different because those decisions are more transactional. They happen fast — impulsively.
Alternatively, high dollar decisions are cautiously considered. They require immense amounts of trust built over time thanks to non-solicitous messages that focus on why a donor would want to give (to benefit them!), not so much on how to give. Why always comes before how.
Therefore, your how messages should only be sent at the right time, when a supporter is in the “Action” stage of the consideration continuum. Support your donors as they self-navigate the decision-making journey and you’ll surely close more major and legacy gifts to support your organization’s mission for years to come.

FUNDRAISING CLIMATE CHANGE

Hard copies available on
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Three strategies for success
3. Give to your givers
The law of reciprocity is a powerful influencer, especially when it comes to highly-considered decisions (such as major gift and legacy gift decisions). This social convention makes supporters feel strongly that they have an obligation to repay when something is given to them first. Therefore, it is essential that you provide value to your supporters and major gift prospects over time, knowing that your gifts will likely inspire them to want to return the favor in the future.
So stop ambushing — soliciting before your prospects are ready to be asked. Instead, be nice and find highly relevant, personalized, valueoriented ways to give to them. Seriously, it works!

About MarketSmart
The problem.
Fundraisers, nonprofit leaders and board members come to MarketSmart when they realize their traditional efforts will never move the needle enough. Sending more email or direct mail will never increase the returns on their fundraising investments as much as they’d like.
After all, according to the Fundraising Report Card’s benchmarks, new low-dollar donor gifts only average about $27 with fewer than 18% giving again—yielding a total lifetime value of just $46 per donor. Organizing more events won’t help either. They’re expensive and time-consuming.
Instead, fundraising operations need more major gifts from assets, not cash. However, the conventional, time-honored so-called best practices surrounding major gifts fundraising efforts no longer work so well.
Too often major gift officers are sent on wild goose chases. The identified prospects assigned to them lead to false positives because they are rarely truly qualified. Oftentimes the leads don’t have enough capacity, are not passionate enough about the cause, or are simply not ready for outreach. That’s because the research used to identify them is based on quantitative data such as past transactional giving, wealth screening or predictive models.
None of that provides fundraisers with what they really need—more meetings with qualified major gift donor prospects who are ready for someone to help guide them through the philanthropic decision-making process.
The solution. 
Qualitative data is better. That’s why we built a system that inspires supporters to lean in, engage and qualify themselves for your outreach. Through our approach supporters explain why they care, what kinds of assets they’d consider giving and when they’d be likely to accept your outreach. That’s the kind of information you need to position your team for success (so you reduce turnover).
Plus, we do it all for you. Our turnkey Engagement Fundraising System gives your staff the kind of automated qualification marketing support they desperately need and deserve.
After all, in-house marketing teams are usually too busy (or don’t know how) to deliver this support. In many cases they’re told to focus on generating low-dollar donations through direct response efforts or event attendance.
With our System you get a powerful 'done-for-you' software and service duo that helps you engage supporters, cultivate leads and land more meetings so you can do what you do best—build relationships with your wealthiest and most passionate supporters when they are ready.
Say goodbye to wild goose chases resulting from speculative donor identification methods. Say hello to much more meaningful meetings, more major gifts and happier staff. That’s what you get from qualitative data supplied by the very people who care most deeply about your cause—your supporters.
FUNDRAISING CLIMATE CHANGE

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Amazon. Free digital & audio
versions available here.

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