3 Key Insights from the FEP Q2 2021 Benchmark Report

Exciting news for fundraisers across the nonprofit sector: the Fundraising Effectiveness Project’s latest report, released in early November, shows that the second quarter of 2021 has been an interesting one across donors, dollars, and organizations — especially as nonprofits face the aftermath of the COVID-19 disaster fundraising spike of 2020. Here are three key insights to know about now.

The Data

This report offers a unique perspective for fundraisers, since the data are collected intentionally and kept consistent. These findings are:

• Limited to orgs with >= 3 years of data, with limited growth/loss constraints,
• Weighted across size and NTEE code for orgs raising between $5K-$25M, and
• Only inclusive of organizations with “a minimum of 25 donors and $5,000 in revenue in each of the previous three years.”

This report analyzed 8 million donors and their $4 billion in gifts to 9,618 organizations. However, the report notes, some data are recorded late (e.g., ~4 percent of Q1 is recorded Q2-Q4,) so further findings could come to light as more information is analyzed.

Key Finding 1: New donors show signs of retention…

… but “overall recapture rates have dropped toward pre-pandemic levels.”

According to the FEP, new retained donors are those who gave last year to the organization, but never before — so in this instance, this is likely COVID-19 disaster donors, or those who were driven to generosity by any number of catastrophes during the year 2020. These donors are often considered difficult to retain, particularly once the initial surge of disaster fades and other, newer issues take their place. In that context, it’s encouraging for fundraisers that these new donors seem to be retained this year at a rate of 3.5 percent.

However, more important donor-related findings from the report balanced this positive outcome. Other notable donor statistics included decreases in:

• New donors (-9 percent)
• Repeat retained donors (-15 percent) — this is those donors who “gave last year to the organization, but not for the first time.”
• Recaptured donors (-5 percent) — that’s those who “did not give last year to the organization, but had given in the past.”

To make a long story short, 2020 crisis donors show signs of retention, and that’s important! And, admits the FEP, “[nonprofits] saw historic recapture in 2020, so a small drop in 2021 is not surprising.” With the donor demographic shift currently taking place, retention of all forms remains incredibly important. Engagement strategies like automated stewardship and recapture series can help fundraisers connect with supporters who didn’t give again in Q2 of 2021.

Key Finding 2: Donations among all giving ranges are down.

The report estimates that the -7.5 percent decline in donations will end up as a positive 1.7 percent growth accounting for the late data reporting. We’re hopeful that these late data do come in, but remain cautious as we are in uncharted territory.

The report organized donors into different ranges by gift size, along these parameters:

• Micro: gifts under $100
• Small: gifts of $101-$500
• Midsize: gifts of $500-$5,000
• Major: gifts of $5,000-$50,000
• Supersize: gifts of $50,000 and more

When broken down by donor size, the report found that:

• All donor types show drops in dollars, and this is due to data reporting delays.
• The FEP estimates total dollar YOY growth will be positive when late Q2 data are reported in Q3 and Q4.
• Larger donation sizes are expected to show lower growth — size and delay in data reporting are correlated.

Although giving appears to be down in all ranges, nonprofits who saw losses in major and supersize gifts may choose to focus more moving forward on the world of planned giving. Given the expectation that $9 trillion will be given to nonprofits by 2042, now is the time for nonprofits to invest in major gift and estate gift programming — targeting the right donors and planning the right campaigns to engage those donors is something that just can’t wait.

Key Finding 3: Some organizations seem to be rebounding from COVID-19 disaster fundraising, but others may have dropped off entirely.

The FEP found that “smaller organizations fundrais[ed] more successfully in 2021 vs. 2020 and larger organizations fundrais[ed] less successfully in 2021 vs. 2020.” We’ll be interested to see whether this finding changes at a later date, given that more data are expected to arrive around major and supersize gifts.

When comparing results by cause category, there appears to be some fundraising normalization taking place after the COVID-19 disaster fundraising spike we saw earlier. Causes like Education, Environment, and Animals are seeing fundraising rebounds, while Human Services and Health-focused organizations are showing declines after receiving high levels of support for COVID-19 relief work.

Organizations not reporting data increased in Q2, which increases confidence that there are true long-term impacts of fundraising operations post-2020 on top of slow data reporting. The FEP expects that “up to 4 percent of 2021 organizations may not report in 2021 at all, given that 4 percent of 2020 organizations still haven’t reported Q4 2020 results.” They point out that “the nature and rate of dropout warrants deeper investigation in future reports.”

Says Ben Miller, Chief Analytics Officer at DonorTrends, a division of EveryAction: “With more than 10 percent of organizations without data in 2021, it remains to be seen what impact COVID-19 had on our sector. I am eager to find out what organizations made it through this pandemic and am encouraged to see that some of those organizations that we know made it are actually growing.”

Our Take

Many organizations are looking to retain and re-engage more donors across segments, especially as fundraising recovers from the COVID-19 disaster spike and as the year-end season progresses — but these goals shouldn’t require more time or work. Download our guide to the Future of Fundraising to learn about strategic changes fundraisers should make now, and talk to us to learn more about how support from a platform designed to help engage more donors, with more programs, across the right mix of channels, without needing to expend more effort, your nonprofit can successfully raise more for your mission.