April 26, 2019
Slow Down in Charitable Giving Poses Questions for Rest of '18

September 22, 2018 — A newly released report indicates that charitable giving in the United States continues to lag behind the pace of 2017, raising questions about how charities, including those in Massachusetts, will fare in critical end-of-year fundraising and suggests that nonprofits should focus on working closely with current donors.

According to the Fundraising Effectiveness Project, which examines data from more than 18,000 organizations and $72 billion in donations since 2005, for the second consecutive quarter nearly every metric analyzed is underperforming compared to 2017 data and several metrics have regressed even further since the first quarter, The NonProfit Times reported recently.
  • The overall number of donors giving in 2018 was down 6.3% in the first quarter, compared to 2017, and declined to 6.6% in the second quarter.

  • The overall donor retention rate (the percentage of donors who continue to give to the same organization from one year to the next) was behind 4.6% for the first quarter, but 6.4% behind after the second quarter.
The publication reported: Overall revenue has gained a little ground on 2017 performance—from -2.4% in the first quarter to -2.1% in the second quarter—as have $1,000-plus gifts from -5.2% in the first quarter to -2% in the second quarter.

In addition, gifts of less than $250 have fallen significantly, from being the only metric in the first quarter that was positive, 3.7% ahead of 2017 data, to lagging behind in the second quarter by 0.9%.

While the report did not specifically address recent changes in federal tax law, a broad swath of nonprofit leaders, including those in Massachusetts, have expressed concern that those changes, which include a increase in the standard deduction, will lead many givers to reduce their charitable giving. The new tax law took effect in January, so its impact on charitable giving will not be fully known to at least the end of 2018.

“What makes all this data so concerning is that in addition to 2018 performance lagging behind last year’s figures, the third quarter is typically the lowest-performing quarter of the year, according to our past research,” Elizabeth Boris, chair of the Growth in Giving Initiative was quoted by NPT.

She added, “We were worried after the first quarter, but I’d say after the second quarter data, alarm bells should be ringing for most charities. Our organizations really need to be focused on cultivating and securing their current donors and ensuring they’ll receive the gifts they need.”

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