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2018 Pareto Benchmarking – key findings

The Pareto Fundraising 2018 Benchmarking program has charted the changes in donor giving year-to-year over the past 10 years.

It’s designed to help fundraising professionals and their leaders make better-informed decisions.

These are the key findings from the 2018 analysis.

Individual giving continues to grow

2017 saw an overall 4.5% decline in income for the 80-member charities, but when we exclude bequests (which have seen three large and fluctuating years of income) individual giving continues to grow.

60% of large charities’ individual giving income grew over the last two years, 50% of medium and small charities’ income grew.

One in two charities’ cash programs grew over the last two years (regardless of income size). And three in four charities’ regular giving programs grew over the last two years (regardless of income size).

Retained donors are critical to your one-off / single gift programs

Charities retained about 44% of their cash donors from 2016 to 2017. Second gift rates, for new cash donors, continued to decline with the average second gift rate (across channels) just 17% for 2017 recruits. Within this we saw direct mail second gift rates stabilise (as you recruited fewer new donors but a better quality level) and online second gift rates continue to be low (with the higher value of these recruits, and higher volumes of new recruits coming through online addressing this opportunity has seen several organisations deliver greater value from their online activity last year).

Retention has been steadily decreasing and poses one of the greatest risks to future income stability. But not all donors are worth the expenditure to keep so retention, in isolation, does not show us the overall health of one-off giving programs.

Income from one-off donations declined for the second year – down by -2.49% between 2016 and 2017. This decline was driven by reduced acquisition investment, primarily in direct mail, but we saw retained and reactivated cash giving grow overall (the donors you already had grew their giving).

One-off gifts accounted for 15% of total giving last year – 7% coming from gifts of $1,000 or more (high value givers, your middle donors and major donors). This small group of high value givers are critical to income stability and growth.

The average new cash donor was worth $76 in 2017. The average retained cash donor in 2017 was worth $109.

Regular giving growth sustaining

Contributing the largest component of individual giving, regular giving income continued to grow, increasing 4.3% between 2016 and 2017. Regular giving continues to sustain growth in the market with cash giving flat and event income showing a small decline.

Charities retained about 60% of their brand new regular givers donors recruited in 2016.

11% of regular giving income came from donors giving a monthly gift of $83.33 or more (your middle donors and major donors). Again a small group of donors giving substantial income.

The average new regular giver was worth $223 in 2017. The average regular giver in 2017 was worth $347.

Bequests – the variable bedrock

Delivering 18.3% of total individual giving income in 2017, bequest income was down on 2016. This came after two very large years of bequest income – with several charities receiving some exceptionally large windfalls through 2015 and 2016.

Events still a mixed bag

Nowadays ‘Event’ income is primarily that generated by Community Fundraising and Peer-to-Peer events. Just 2.6% of overall income was delivered by events in 2017 and this was a decrease of -2.5% on 2016 income.

Of note: over 90% of this event income was delivered by just 16 of the 80 charities.

What is this ‘Other’ you speak of?

At 28.4% of income it looks like a good type of giving. In fact it’s many types of smaller giving including lottery (not small for a handful of causes but overall a small contributor), membership, merchandise, admin donations, offertories, schools, payroll (very small despite the many times we get asked if it’s growing or showing promise), disaster (which in some cases can be significant, but the 2009 Bush Fires were the biggest blip in this giving), In Memoriam, In Celebration and ‘Other’ (which is things we can’t define and usually this is older data). They add up to a lot but alone are small.

The 2018 Pareto Benchmarking Study includes 250 graphs and tables illustrating the statistical findings from the Analysis and recommendations as to how fundraisers can use this information to build better relationships with their donors and raise more money.

To find out more, please contact Damon Twight at Pareto Fundraising.

 

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