Although charities raised more in 2016 than in any of the previous four years, the rate of growth continued to slow last year, according to a new report.
Giving grew 1 percent in 2016, compared with 1.6 percent in 2015, 2.1 percent in 2014, and 4.3 percent in 2013, according to fundraising-software company Blackbaud.
Steve MacLaughlin, the company’s vice president for data and analytics, attributes the overall slowdown in part to a leveling out of giving to small and large groups after the increases that followed the Great Recession.
During that time, smaller organizations did better than any other group, he said. “It was almost like they were faster to recover than other organizations because they had less of a hill to climb.” Larger groups also recovered, but for several years many medium-size organizations were stuck.
“It’s the goldilocks problem of fundraising,” he said. “Not too big but not too small.”
But this year, midsize organizations, which the study classifies as those that raise at least $1 million, up to $10 million, performed better both in overall and online fundraising than smaller and larger groups.
The report includes total giving data from 6,845 nonprofits representing more than $23 billion in total 2016 fundraising. It also counts online giving data from 5,210 nonprofits representing more than $2.6 billion in gifts. The data is an apples-to-apples comparison of the same organizations over 24 months.
Nothing in the data suggests that the 2016 election cycle had either a significant negative or positive impact on charitable giving, Mr. MacLaughlin said. While some organizations have seen spikes in giving, he said, “the reality is it’s just not enough to move the needle one way or another.”
Although online giving remains a small percentage of total fundraising, it continues to grow significantly, increasing 7.9 percent in the past year.
By comparison, online giving grew 9.2 percent in 2015 and 8.9 percent in 2014.
Online donations accounted for 7.2 percent of all fundraising in 2016, about the same as last year, when nonprofits received 7.1 percent of donations online.
Midsize groups saw an 11.4 percent boost in online giving, a larger increase than either larger or smaller groups.
Among nonprofits of all sizes, the average online gift was $128. Offline, the median gift below $1,000 was $20.
But charities had a harder time retaining donors who gave online than donors who gave offline. About 21 percent of online donors who gave in 2015 made a second gift in 2016, whereas 29 percent of offline donors did the same.
“We believe you need to work harder to retain an online donor,” Mr. MacLaughlin said. “Their average first gift and subsequent gifts tend to be much higher. Losing them could cost you more in the long run.”
Ten percent of online gifts were $1,000 or more. And 41 percent of charities reported receiving at least one contribution of that size.
Giving by Cause
Arts and culture nonprofits saw the largest increase in overall giving of any cause area, raising 15.4 percent more online in 2016 than in 2015.
Online donations to international-affairs groups were down 0.8 percent due to a spike in online giving in 2015 following the Nepal earthquake, said Mr. MacLaughlin.
Mobile Share Increases
Donors continue to embrace giving through their mobile devices, the report found. Nearly 17 percent of online donations were made on a mobile device in 2016, compared with 14 percent in 2015 and 9 percent in 2014.
Some nonprofits have done better than others at making their sites more mobile friendly, he said. The stakes are high, he added. Failure to make giving easy by mobile device can lead donors to give to another organization instead.
The report also includes data on Giving Tuesday, the annual day of giving that falls on the first Tuesday following Thanksgiving and serves as the unofficial kick-off to the year-end giving season for many charities.
While large nonprofits brought in at least 80 percent of the total dollars raised during the first two years of the event, small and midsize charities have gained each year since. In 2016, large charities brought in 66 percent of total Giving Tuesday dollars, while medium-size groups raised 26 percent and small groups 8 percent.
While there is a lot of volatility in the Giving Tuesday data, Mr. MacLaughlin said, “to see that shifting every single year shows that it’s not just for the big guys.”
Originally published by Eden Stiffman in The Chronicle of Philanthropy, 2.22.17.