Get Key Insights About Fundraising in 2023 with our New Benchmark Report
Tim Paris – 13 September 2023
Working with +200 diverse nonprofits globally, I’ve seen how AI can turn a nonprofits’ data into powerful insights that transform fundraising strategies, improve operational efficiency and help them raise more funds to advance their mission.
Good fundraising should begin with data. And in the same way that data underpins AI, reports like our latest 2023 Interim Dataro Fundraising Benchmarking Report also have the potential to provide valuable insights about nonprofit fundraising data and performance to help guide strategic fundraising decisions and improve fundraising outcomes.
The objective of this report is to shed light on fundraising performance so far in 2023 and give fundraisers the answers they need to make sense of their own data and fundraising performance within the wider context of the macro fundraising environment. In doing so, fundraisers and development professionals can make better decisions about where to invest their time, efforts and fundraising dollars to drive greater impact for their cause.
The 2023 Interim Report analyzes the fundraising data of 151 global nonprofits from Dataro’s data pool, covering 143 million donations, to reveal how nonprofits have performed in the first half of 2023. It highlights key fundraising trends and benchmarks that will help nonprofit professionals answer questions like:
- Are our fundraising results normal?
- Which areas of fundraising are showing the strongest growth or decline?
- What are the biggest opportunities to invest in for income growth?
Key Insights from the Report
So what is Dataro’s data telling us about fundraising performance in 2023 so far?
Income growth for most, despite fewer donations and a shrinking supporter base
At first glance, 2023 appears to be a fundraising year marked by declining performance. For the 151 organizations included in this analysis, overall income has declined by -11.4% year-on-year (January – June 2022 versus 2023). Despite this, most organizations (55.6%) are experiencing year-on-year income growth in the first half of 2023.
A closer inspection of the data reveals that the decline in overall sector income is concentrated in humanitarian and international aid organizations and relates to significant decreases in digital and direct mail donations, reflecting a normalization in support for these causes after the exceptional outpouring of generosity in relation to the Ukraine conflict in 2022. Revenue for the median organization in this analysis is up by 5.7% compared to the first half of 2022, despite the median organization receiving 2.1% fewer gifts and having 2.1% less active donors. So income growth is coming from an increase in average gift, which is up 2.2% for the median organization.
Shifting dynamics and a return to ‘normalcy’
Taking a more encompassing view of the data reveals a positive trajectory of income growth since 2018, punctuated by two periods of exceptional generosity in 2020 at the beginning of the COVID-19 pandemic and again in 2022 in response to the ongoing war in Ukraine. So in reality, 2023 is revealing itself to be a fundraising year characterized by a return to relative ‘normalcy’ after a period of unprecedented disruption and generosity.
For the 151 organizations in this analysis, 2023 is serving as a timely reminder that fundraising outcomes tend to balance out over time, and exceptional results are likely to return to more typical levels in subsequent years. This highlights the importance of maintaining a steady and strategic fundraising approach that considers both short-term successes and long-term sustainability.
But beneath the seeming return to more customary levels of support, it appears that the dynamics of income generation are gradually shifting. Over the longer term we’ve seen digital channels steadily gaining on more traditional channels like direct mail, while mid-level and recurring giving continue to grow in importance to overall income.
Digital Versus Direct Mail – Implications for EOY Giving
In terms of relative contribution to overall income, digital income has steadily been gaining on direct mail over the past five years and 2023 appears to be the transition point where digital will surpass direct mail in terms of income contribution, perhaps for good.
That’s not to say that direct mail is dead. Far from it. But the dynamics are changing and the role of digital is becoming increasingly more important as a cost-effective and more immediate way to engage with supporters. Although direct mail remains a vitally important program to many nonprofits, it is expensive and the returns are diminishing as printing and postage costs continue to rise.
So as we approach the end-of-year giving period, it is important that nonprofits ensure their direct mail outreach is profitable. That’s where AI plays a role, helping fundraisers identify the donors most likely to give so they can improve their targeting, reduce mail volume and wastage, increase revenue and drive campaign ROI.
End-of-year campaigns that effectively leverage digital channels alongside their direct mail campaigns will be the most successful, providing donors with choices in the way they give. Just as direct mail continues to be a driver of digital income, it also continues to be a good upgrade pipeline that encourages donors to increase their support and a solid source of bequest prospects.
A tipping point in AI adoption?
In 2023 we’ve also witnessed more nonprofits globally leaning into new technologies like AI, not only to improve fundraising outcomes but also to improve their efficiency and effectiveness overall. And as we approach the end of 2023, I’m thrilled to witness that AI is transitioning from being a trend or a ‘choice’ to the new standard in fundraising. This can only be good for the causes we all support.
We trust you find the insights and analysis in the 2023 Interim Dataro Fundraising Benchmark Report helpful in understanding how your nonprofit is performing so far in 2023. You can download the free report here to get a read on fundraising performance in 2023 so far and see how your results stack up.
Get in touch if you have any questions about the report, our fundraising analytics tools or our AI solutions to help you grow your fundraising income.