It’s that time of the year again – when we look back on the year that was and assess where we are as a sector and what we can do better.  Thanks as ever to AFP, DonorTrends, and partner organizations who provide the data.

Today, I’m going to talk good news; tomorrow, bad news; and Friday, implications.

If you want to draw your own conclusions, you can get the reports here. You can also benchmark yourself here.

Now, to the good news:

Revenue is up.  Ever so slightly – revenues were up 2.2%; inflation ended the year at 1.8%.  We eked out a tiny real gain.  While we are still bound to 2% of GDP designated for charitable giving, gains are better than losses.

New donor retention rates are up.  FEP estimates retention of new 2016 donors in 2017 at 31.8%, up from 31.4% in 2016 and 25.2% in 2013.  These are the toughest donors to retain and the most important – the gains you make in first-year retention compound, so you can’t make them up later in the donors’ lifecycles.

If you ever found a genie’s lamp and s/he gave you the opportunity to improve one fundraising metric by 10% (and the genie said that increasing lifetime value was forbidden, like wishing for more wishes), new donor retention likely would be the smart choice.  So it’s great to see the significant steps forward here.

This is where I must be a killjoy and mention that almost any other industry save spammers and funeral homes would vomit if they found that 68% of the customer they acquire never buy again.  We still have work to do.  But “up” is still better than “down”!

Fourth quarter 2017 was outstanding.  I was very worried about the results through Q3.  Repeat donor retention was down.  New donor retention was down by a quarter, year-over-year.  We were down five percent on donors and four percent on revenue.

But all these reversed in Q4.  Part of this may be online giving increases, which tends to be very heavy in fourth quarter (although these are a minority of total giving).  Or it could be that donors are shifting giving to the end of the year generally.  We know that donors take defensive measures to protect themselves from charitable solicitations. One of those could be moving giving to the end of the year so that it can be done all at once.  This would make sense with the bulk of these donations coming from $1000+ donors, who gave 47% more in Q4 2017 than in Q4 2016.

The amount given per donor is going up.  Whether that’s increases in average gift across the board or growing support from major donors, each donor we get is getting more valuable.  This means that we can be a bit more willing to invest in acquisition and retention, knowing that these have a greater likelihood of paying off in the long run.

This dataset and report exist.  Let’s celebrate the fact that we can see what our industry is doing and how we fit into a larger picture.  When you are with one organization, you tend to think that your organization is (or your clients are) representative of the whole sector.  These data help ground us and see how we are doing, for better or worse, against the greater trend.

Nick