The crisis of our own making
There has been an INORDINATE amount of talking about the decline of giving in the United States.
Yeah, let’s just take a breath, shall we? Philanthropy in the US is nearly a trillion dollar industry. That’s TRILLION. With a T. $557.16 Billion was given charitably in the US in 2023. That was up 1.9% over 2022, but…whoopsie…when adjusting for inflation, giving was actually down by 2.1%. That said, total giving remained at around 2% of US GDP. What really set off a WAVE of alarm in this reporting was that giving by individuals saw a decline of 2.4%. In typical fashion: let the pearl clutching commence. And boy did it.
Guess what. Generosity in the US still outpaced global giving and the GDP of 25 countries. Seriously. This is hardly 2008. Or any other downturn before, to be frank. And 2022 was, like, bad bad – a 10.5% drop, adjusted. YIKES.
We seem to have very short memories.
You bet there are some very concerning trends. Wealth is continuing to concentrate in the hands of fewer people, the total number of people giving as declined, foundations are afraid of their own shadow, and government funding has opened an absolute three ring circus in the 10th circle of Hell. But those are external factors that we have no control over.
What is?
How we engage. How we build trust. How we show up.
This “giving crisis” isn’t about declining generosity — it’s about declining connection. It’s about nonprofit organizations falling into a cycle of “ask, ignore, repeat.” It’s about waiting for a white knight donor instead of doing the consistent work that builds real community and loyalty.
Americans are still the most generous donors on Earth, not only in dollars but in spirit. We give, we volunteer, we help strangers. So ask yourself: if generosity is alive and well, why aren’t we meeting it with equal energy and intention?
The “giving crisis” is constructed, make no mistake about that. Who constructed it? We did and yet we seem to have become paralyzed by our own groupthink about ending it. The crisis we’ve created stems from the fact we haven’t done a good enough job engage people / inspiring loyalty. It’s give give give / ignore ignore ignore –- until you ask again. And you’re asking because your organization is facing a financial crisis. Of your own making (see above.)
We are not as powerless as we might be feeling in finding, and implementing, solutions.
A lot of organizations relentlessly look for a “shiny” solution, when being methodical, intentional, and consistent would make all the difference. Saying “we don’t have time” means you’re not prioritizing your organization’s present and future. Whining that no one is paying attention to your organization is ignoring the people who are paying attention. Sitting and wishing that some would give your organization a transformational gift is putting your fundraising strategy into hope. And hope isn’t a fundraising strategy.
The shiny object obsession is distracting. Development is often not “exciting” or “innovative” but it doesn’t have to be. It works. Sadly, too many leaders and boards are at fault for insisting and perpetuating this idea. Fundraisers have to be willing to stand up to this. No, no magic system, hack, or process is going to change things. What does? Being authentic, being engaging in ways that work for you and for your supporters, and for taking the time to get to know people.
A particularly pernicious sub “crisis” is focused on donor retention. Nonprofits suck at this. Why? Donor retention is such a fundamental, and fundamentally easy, thing to do and it pays incredible dividends. Donor retention is one of the least magical, least exciting things.
Donor retention is not magic. It’s muscle. And we’re not using it. Donor retention rates in the United States have been experiencing a downward trend in recent years. According to the Fundraising Effectiveness Project (FEP), the overall donor retention rate hovered between 40% and 45% as of 2023. More recent data indicates a continued decline; for instance, in Q3 2024, the retention rate decreased by 4.6% year-over-year.
Breaking it down further:
New Donor Retention: Particularly concerning is the retention of new donors. In Q3 2024, only 13.8% of new donors were retained year-to-date, marking a significant drop of 9.0% compared to the previous year.
Repeat Donor Retention: Repeat donors, while more stable, also saw a decline. The retention rate for this group was 50.3% in Q3 2024, down by 4.6% year-over-year.
These figures underscore the ongoing challenges nonprofits face in maintaining donor engagement and highlight the critical need for effective retention strategies.
Let me boil great donor retention down into its simplest component parts:
Someone makes a gift? Acknowledge it within 72 hours. Email, call, carrier pigeon — doesn’t matter. Let them know that you have received, and appreciate, their investment. I’m not talking the auto generated receipt they will receive through your system (though that can be a great first interaction, if you use it)
A few weeks later? Send a meaningful update. Tell a story. Share a win. Invite engagement.
Keep going. Continue to communicate. Not just to ask — to share, to thank, to show. In this update, share a short story of impact. What made this gift meaningful to your organization? How did it help? What comes next? Oh, and don’t forget to give your donor a way to contact you if they have questions or want more information.
No fancy tech? No problem. Set reminders. Use sticky notes. What matters is doing it.
If you’re not willing to thank, update, and engage your donors — why should they keep giving? Out of guilt? Nostalgia?
Just because? How about giving a little back? Help your donors feel like they are partners in this work. Which DOES NOT mean that they are in charge. It doesn’t mean that you are going to twist and contort yourself to meet their special needs. It doesn’t mean that you are only going to pay attention to those donors who make significant monetary investments and you’re going to ignore everyone else.
You’re not just asking for money — you’re inviting people into a movement. Into purpose. Into partnership. That means treating them like partners, not ATMs. Not bosses. Not saviors. Partners.
We don’t need a study, a summit, or a drum circle to tell us what we need to do. We have all the knowledge and all the tools necessary to solve this “crisis”…but do we have the courage?
This is not a call to panic. It’s a call to courage.
• Courage to resist the noise
• Courage to stop chasing silver bullets
• Courage to do the work that actually works
• Courage to commit — not to gimmicks — but to people
We need to build relationships. Be brave. Stay committed. The future of philanthropy isn’t about fear. It’s about focus.