Rise of the Small Donor?
Last week, the Fundraising Effectiveness Project released grim numbers for the first quarter report of 2020. While headlines focused on the decline of major gifts and cancellation of special events, the FEP’s data provided one optimistic statistic. Major donors were down 7.4% and mid-level donors were down 2.2% year-over-year, but donations under $250 increased by 5.8% compared to the first quarter of 2019.
Fundraising Effectiveness Project Quarterly Fundraising Report | 1/1/2020-3/31/2020
The declines in mid-level and major donors were expected given that the world was thrust into an unexpected global recession in March. However, the increase in donations under $250 surprised fundraising experts. According to the Chronicle of Philanthropy, this increase defied trends from the last few years:
According to [Michael] Nilsen, [Vice President at the Association of Fundraising Professionals] the first-quarter fundraising has been declining year over year for several years across all categories of donors, so an increase in small-dollar donations was a surprise.
"This could be the year that breaks the mold on how giving goes," said Nilsen, citing the increase in small-dollar donor giving. "We never see that kind of movement in the first quarter, and we kind of attribute that to giving to Covid causes."
The FEP findings also echo the Fidelity Charitable survey that found 54% of donors plan to maintain their existing contribution levels.
Growth of small-dollar donors also defied trends from recent studies. While individual giving increased in 2019, it disproportionately came from the very wealthy. According to the Indiana University Philanthropy Panel Study, between 2000 to 2016, there was a 13% decline in the number of American families making charitable donations.
The average giving size per family hardly changed, ($2,584 in 2000 to 2,763 in 2016), but the US has shifted from two-thirds of households making donations in 2000 to slightly more than half of households making donations in 2016.
Changes to the Giving Landscape | Lilly Family School of Philanthropy, Indiana University
This gradual decline had experts predicting that small-donor giving would continue declining with the pandemic and recession. If the FEP numbers for donors under $250 increases or remains steady for the second quarter of 2020, it could signal a major reversal in charitable giving trends.
While increases from one quarter do not indicate a trend or shift in how America gives, it is an optimistic signal for nonprofits that have cut budgets and laid off staff due to cancelled events. This increase in donations under $250 represents a silver lining that should have nonprofits taking a second look at prioritizing sustainer giving programs.
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