As 2020 draws to a close and 2021 dawns, we should remember that the new year won’t be all sunshine and rainbows. 2020 has been a unique year, but the one ahead will come with its fair share of trials, no doubt.
But one of the interesting things to look out for in 2021 will be the reports on charitable giving in the previous year. I typically find these reports to be worth glancing at but mostly uninteresting, telling us year after year the same old thing.
The 2020 reports, however, will certainly make for interesting reading. The Fundraising Effectiveness Project (FEP) releases quarterly reports on performance in the charitable sector. In October, reporting on the first two quarters of 2020, they had great news. Charitable giving was up this year over the same period in 2019. In addition to revenues increasing, donor retention was up, as well as new donor acquisition and donor reactivation.
Last week, the third quarter report came out, indicating a slight slowdown in the increases over 2019, but the trend of 2020 outperforming 2019 continued.
In one sense, this is still more of the same; at least, there are no major outliers in the trends this year that we typically see. What’s surprising, though, is that this has not been a year like any other. We all expected charitable revenue to go down, whether slightly or significantly, but that is not what we are seeing so far. (Unfortunately, prolonged USPS delays may cause major disruptions to Q4 revenue for nonprofits across the country.) New donor retention is down from last year, indicating that donors are pulling back from their new charities from 2019 and re-committing to tried and true donees; but at the same time, new donor acquisition this year is faring very well. That means that those organizations that kept investing in acquisition efforts—whether direct mail or digital—are probably seeing the benefits of that commitment.
I think it goes without saying that in a year like 2020—with extensive mail delays, dramatically fewer in-person meetings, skyrocketing unemployment, a volatile stock market, few fundraising events—increased charitable giving is a real testament to the spirit of American generosity, not to mention the hard work of fundraisers.
Most impressively, the FEP report showed the largest increase in percentage of revenue coming from donors giving less than $250. Even in the midst of so much uncertainty and risk of unemployment, donors of average means continued to give generously to nonprofits to help them navigate this difficult year and keep advancing their missions.
The new year is going to come with a whole new set of challenges. There are some perks, like extending the ability for donors to deduct up to 100% of their AGI and all taxpayers able to claim a $300 above-the-line deduction (now $600 for couples in 2021), but who knows what new trials will emerge. We can hope, and I think reasonably expect, that nonprofits will continue to thrive and Americans will continue to be generous.
That won’t come without the hard work of fundraising professionals—and Philanthropy Daily will continue to strive to support fundraisers in their work—but it will be interesting to see how charitable giving performs in the coming months and our nation continues to navigate our fraught political and social environments along with a volatile economy. We remain grateful for the fundraisers who work to fund the “little platoons” of American civil society, and for the generous Americans who continue to support the organizations they love doing important work in communities across the country.