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Donor Participation Project

Reversing the Donor Decline: How Nonprofits Can Turn the Tide

The decades-long decline in donor participation for nonprofits appears dire but reversible, according to Woodrow Rosenbaum, Chief Data Officer at Giving Tuesday. Rosenbaum shared insights from Giving Tuesday’s research with nonprofit leaders, challenging the assumption that donor motivation is waning.

In fact, the desire to give remains strong. The issue is that nonprofits have focused too narrowly on large donors at the expense of broad engagement.

The data shows most people regularly give in multiple ways, not just to nonprofits. Nonprofits only receive about one-third of total giving acts. By dismissing other forms of generosity and prioritizing large gifts, nonprofits have optimized for the very outcome they now face: more money from fewer donors.

This shortsighted strategy puts nonprofits in a precarious position, reliant on a shrinking pool of funders and unprepared for economic shifts that primarily impact larger gifts.

Rosenbaum calls on nonprofits to abandon scarcity mindsets, recognize the “immense untapped opportunity” in grassroots supporters, and build year-round engagement. Nonprofits must “start now, not next month,” developing multifaceted relationships with donors rather than viewing them as transactions.

Giving days like Giving Tuesday, which drove increased donor participation in 2020, provide a template.

Donors give for the experience of joining a broader community to create change. Nonprofits should create more of these opportunities, matching the ways people naturally want to give through their time, networks, advocacy, and money.

Nonprofits concerned about “too much noise” or “overly crowded” fundraising spaces are missing the point. Donors are giving regardless, looking for ways to contribute. Nonprofits can either purposefully engage them or remain on the sidelines while others step in. Those taking action, Rosenbaum notes, can participate in Giving Tuesday’s “Insights to Action” project, which will test engagement strategies this summer to develop recommendations for reversing donor decline and building financial resilience.

View the full recording of this session in our Resource Library.

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