If your revenue seems to be holding steady or even increasing year over year (dollars up), good for you! That’s certainly not bad news. But there could be foreboding news lying under the surface of what appear to be rosy financials.
The reality is, donors are disappearing (donors down)—and the trends are worsening.
Fewer people are donating to charities. According to new Gallup data, “The world’s benevolent streak may be losing its momentum. After peaking between 2021 and 2023, global charitable activities — such as donating, volunteering and helping strangers — declined significantly in 2024.”
But the wealthiest donors seem to be giving at even higher rates than they have historically done. So the wealthy donors are masking the loss of millions of mid-level and low-dollar donors.
For now, this means your budget might look good. The problem is, if you lose just a handful of major donors and have no easy way to replace them, what will you do?
We’re going to look at five reasons why donations are declining–meaning that fewer people are giving. Then, we’ll suggest some ways your nonprofit can avoid landing in major hot water if a few major donors stop giving in the next few years.
Here are 5 reasons why fewer people are giving to charity.
1. Less Religious Involvement
Regardless of how you feel about religion, it is undeniable that religious people give more money away than non-religious ones. And this holds true even if you exclude donations directly to their church.
In the 1950s, only 2-3% of people said they had no religion. Today, that figure has climbed to over 20%. The actual figure is of course much higher, as many people will say they are affiliated with a certain faith but don’t actively practice it or attend any services. Over that same time period, church membership has declined from 73% to 47%.
As fewer people make religious community and religious values part of their daily lives, people who would have participated in charitable giving are now spending their time and money doing other things.
2. Government Should Do It
What has replaced religious engagement? The younger generations are more likely to believe the government is responsible for meeting the needs of people and causes often served more effectively by nonprofits.
Because they believe that, they give less money to charity.
3. Trust in Nonprofits Is Declining
Paralleling the decline in charitable giving is the decline in trust.
Because of various scandals, perceived or actual incompetence, bad experiences with fundraising, and numerous other reasons, more people today distrust nonprofits that at any other point in history since charitable organizations came on the scene.
One study found that only 57% of people trust non-government organizations to solve society’s problems. More people trust business to solve them, perhaps a result of the huge increase in influence technology has taken in the cultural landscape.
If people don’t trust, they won’t give. And nonprofits are losing the trust of too many would-be donors. The trust deficit is a major problem. Here’s a deeper look at why trust is declining.
4. Inflation and Economic Struggles
The recent surge of inflation and rising cost of living made it much more difficult for average people to find enough spare money to keep donating at previous levels or start now, even if they wanted to. And other economic stressors like unemployment, rising debt from credit cards, medical issues, or student loans are extending the time it takes for younger people to feel financially secure enough to begin giving.
40 years ago, you could graduate high school and get a decent job and build a career. And, you could go to college and be free from debt within a few years, ready to build wealth. Now, it’s common to see people still paying off student loan debts into their 40s, and buying homes far later than previous generations.
With financial security taking longer to achieve, the habit of donating to charity is taking longer to take root for many younger potential donors.
One writer for Vox basically made this exact comment, saying, “With tens of thousands of dollars in undergraduate student loan debt hanging over my head, I laugh every time I receive, and promptly delete, a fundraising text from my alma mater.”
5. Jealousy
A survey of US adults found that almost half of people who stopped donating to charity in recent years did so because they thought wealthier people should be paying more to solve the world’s problems. Whether they think wealthier people should be doing this through taxes or charitable donations is unclear.
But what these people don’t realize is, wealthy people are already donating nearly all the money that goes to charity. As the Fundraising Report Card data shows, major donors give a very higher percentage of overall charitable donations.
This perception of what wealthier people should do is therefore having the opposite effect as what these former donors intended when they stopped donating – their shift in giving habits is causing more uncertainty for nonprofits, and making it harder for them to fulfill their missions.
How Nonprofit Organizations Can Respond
These causes of declining giving might alarm you – and they probably should. This is a serious problem, and it’s hard to say what the sector will look like in twenty years.
Your major donors won’t live forever. You need to develop a system for continually identifying, nurturing, and converting new donors into loyal repeat donors who give, and give big.
In other words, your best strategy to overcome the decline in the number of donors isn’t to increase the number of donors. Instead, you need to get better at continuing to find new major donors.
Why?
Because most of the causes of declining charitable giving aren’t showing any signs of abating. Economic realities can change, but the inflation from the early 2020s appears to have settled in as a permanent elevation of the cost of living. Prices aren’t going to go back down. Debt is getting worse. Religious engagement trends aren’t likely to turn back the clock.
You can do something about trust, but that’s a long-term battle.
The one thing you have the most control over is your ability to find and develop relationships with new major donors.
How to Find New Major Donors
In all your marketing, you are continually adding people to your database. You’ve got a lot of names, and you don’t know very much about most of them.
Some have the ability to give big gifts, right now, but they don’t. Furthermore, some of those people will not be major donors right now, but if you can build a relationship with them, they may become major donors later in life.
You can do this if you prioritize donor relationships over getting quick lower-dollar gifts with short-term benefits.
MarketSmart’s entire system has been built for this purpose.
We use donor-driven surveys and proprietary technology that automates personalized cultivation with each supporter on an individualized basis. As they engage, each supporter gets rated based on what we call their digital body language (where they click on your website and frequency of engagement).
This enables the system to figure out who is ready for more personalized outreach from a gift officer, and who should continue to be nurtured by the software and system.
The reason this works so well is because you can apply it at scale – to tens of thousands of supporters – far more than human outreach specialists could ever engage on an ongoing basis.
With this approach, you are nurturing relationships with far more supporters than you are now. And over time, the major donors will self-qualify, and signal when they are ready for someone to reach out and talk. You’ll know who is able and ready to give major gifts. You’ll know who is open to talk about planned giving. And best of all, you’ll know why they want to do these things, which enables you to have productive, personal, emotionally satisfying conversations.
It works – amazingly well.
Most of our nonprofit clients generate well over ten times what they spend on our software, which is why we offer a 10:1 ROI guarantee to new customers. In fact, many benefit from 100:1 ROI!
Think about that for a minute. Who else offers a 10:1 ROI guarantee?
We do, because our system works that well.
Want to see how it works? Watch the video on this page for more details about the Engagement Fundraising system.
Related Posts:
- How to Deepen Your Major Donor Relationships
- Strategies for Nonprofit Leaders in an Era of Declining Confidence
- Understanding Wealthy Donors – 3 Truths Every Gift Officer Needs to Know
- 4 Ways Your Assumptions about Major Donors Are Hurting Your Fundraising