A recent survey of 155 nonprofits with budgets under $2 million has found that smaller organizations raise a larger share of their revenue from individuals and that a little over half of all individual donors give donations under $1,000. The study found that the larger the organization, the less individual donors accounted for overall revenue. The survey categorized organizations by revenue, with the smallest being under $200,000 and the largest category being between $1 and $2 million.
What’s interesting to us about this is that the average gift size between the two sizes of organizations is not that different. For the smallest organizations, the average gift is $445, while for larger organizations the average gift is $637. That’s a difference of less than $200. On average, the larger organizations have about 900 individual donors, and the smaller organizations have about 220 individual donors. That means that while larger donations have about four times the number of individual donors, they’re giving about 43 percent more. In other words, it’s not the average size of the gift that sets them apart, it’s the number of donors.
That’s good news for smaller organizations. Because a larger chunk of their funding comes from individual donors, increasing their average donation size—even only slightly—will likely help them grow their annual revenues significantly.
However, what’s most concerning about the survey results regards online donations. Among all revenue sources, online donations only accounted for about 24 percent, coming from only 40 percent of donors with an average gift size of $300—far below the average donation size of every organization size.
There are likely several reasons why online seems to be lagging other donation channels. Part of the issue may be that aging donors still aren’t as comfortable with giving online, and younger donors don’t yet have the funds to give larger gifts. At the same time, younger donors tend to give more to projects and causes than organizations. The good news is that the survey found that about 60 percent of all donors are repeat donors, which means there’s plenty of room for cultivation and growth of younger donors through digital channels. (Want to know what happens to the other 40 percent, and how to keep them from disappearing? Check out our post How to stop millennial donors from ghosting you.)
If you’d like more information about how to engage donors online, contact us. Pinkaloo’s Modern Giving accounts provide donors with a centralized account for managing their charitable giving. We are currently adding tools for charitable organizations to connect with donors on our platform and to cultivate long-term donor loyalty.