Understanding shifts in giving by small-dollar donors: Insights from FEP’s Q4 2024 report

As chair of the Fundraising Effectiveness Project (FEP) and director of community engagement at Neon One, I’ve had the opportunity to closely observe the evolving landscape of philanthropic giving. My experience has provided deep insights into donor behaviors, especially within the critical small-dollar segment—those who contribute less than $5,000 annually but represent 96.9% of all donors, according to FEP’s latest quarterly report. Understanding these donors is essential to ensuring the health and resilience of our sector, and leveraging data insights allows nonprofits to proactively enhance donor engagement and retention. 

Founded in 2006 to help nonprofits increase their fundraising effectiveness through accessible, accurate, and actionable data, FEP’s mission is to provide nonprofits with essential insights to foster sustainable donor relationships. 

Based on careful analyses of FEP’s Q4 2024 data, the strategic insights and practical recommendations below were shaped directly by frontline fundraisers and nonprofit practitioners. FEP’s Fundraisers Subcommittee, co-chaired by Mary Anne Chern, FAHP, ACFRE, and Alice Ferris, CFRE, ACFRE, led this effort, ensuring the strategies are not only data-informed but also closely aligned with the day-to-day realities of fundraising professionals. 

Key trends in giving by small-dollar donors 

Overall fundraising grew in Q4 2024, despite fewer donors

In Q4 2024, total fundraising dollars increased by 3.5% compared to the previous year, even as the overall number of donors dropped by 4.5%. This suggests giving is becoming increasingly top-heavy—fewer individuals are contributing larger amounts. Most concerning is the sharp 8.8% decline among donors giving between $1 and $100, a critical group for grassroots engagement. Relying heavily on fewer, larger donors poses significant risks for long-term sustainability, as a robust base of small-dollar donors provides stability and broad community support essential for resilience, especially during challenging economic or social climates.

Retention rates continued to decline further

The latest FEP report shows a 2.6% year-over-year decline in overall donor retention, underscoring persistent challenges in keeping supporters engaged over time. The most significant drops occurred among Micro donors ($1–$100), whose retention fell by 4.4%, and Small donors ($101–$500), with a 3.6% decline. These small-dollar donor groups often include both first-time and repeat donors, but Micro donors are disproportionately represented among first-time givers, while Small donors are more likely to return in subsequent years. November and December 2024 saw particularly sharp downturns, suggesting continued difficulty in converting initial gifts into sustained support during the most active giving season.

Practical strategies for strengthening donor engagement

The widening gap between the growth in total dollars viewed alongside trends in giving by small-dollar donors calls for targeted, data-informed responses. Here are our Fundraisers Subcommittee’s top four recommendations for the next few months:

1. Rebuild the donor pipeline through intentional small donor acquisition

Small-dollar donors are critical for long-term sustainability and community engagement. Nonprofits should employ compelling storytelling, accessible giving opportunities, and multi-channel outreach. Testing incentives such as monthly giving options or first-time donor incentives can also prove beneficial.

2. Engage donors early to strengthen year-end campaigns

Waiting until year-end to steward donors increases the likelihood they will decide to direct their giving elsewhere. Proactive, personalized mid-year engagement with “pre-lapsed” donors—those who gave in 2024 but haven’t yet contributed in 2025—can significantly improve year-end results.

3. Leverage year-end data to refine fundraising strategies

Analyzing 2024 year-end fundraising outcomes enables nonprofits to identify high-performing segments and channels, along with those underperforming compared to FEP benchmarks, to inform strategic decisions and targeted improvements.

4. Balance revenue growth with donor base expansion

Revenue growth that relies on fewer donors poses long-term risks. Introducing key performance indicators (KPIs) focused on donor count and retention alongside revenue targets ensures a more comprehensive and sustainable fundraising approach.

Looking ahead: Strengthening nonprofit resilience

Insights from Neon One’s Generosity Report underscore that long-term retention significantly outweighs initial gift size in determining donor value. This analysis was drawn from a comprehensive review of 99,522 donors across 2,748 organizations, each donating no more than $5,000 annually between 2020 and 2024. Notably, 70.25% supported a single nonprofit, while 29.75% contributed to multiple organizations. 

The report highlighted how donors who gave over multiple years had an outsized impact: Donors who contributed consistently for all five years (11.7%) accounted for 45% of total revenue between 2020 and 2024. Those who donated for four years (9.9%) added another 18.4%, and three-year donors (12.6%) contributed 14.1%. By contrast, single-year donors represented the largest group at 46.1% but contributed only 10.9% of total revenue. 

According to the Center for Effective Philanthropy’s February 2025 snapshot, 90% of nonprofit leaders are worried about negative impacts from the current political climate. By aligning the insights and recommendations outlined above, nonprofits can enhance donor retention and reengage small-dollar donors, directly addressing some of those concerns. Intentional, data-informed engagement strategies that recognize diverse forms of generosity will be essential for cultivating resilient supporter communities and ensuring long-term sustainability.