Fundraising Talks – May 2025

News and updates from the USM Office of Advancement Research

Letter from the Director

Welcome to May’s edition of Fundraising Talks.

It’s refreshing to see the vibrant colors of spring as we enter a season of graduations and celebrations at educational institutions across the nation. While federal funding continues to decline, we can only hope that private philanthropy will rise to help fill the gap.

Research by Gabriel Zucman, economist at the University of California, Berkeley, and the Paris School of Economics, found that just 19 U.S. households increased their total wealth to 1.8 percent of the national total in 2024. According to the Federal Reserve, the net worth of U.S. households and nonprofit organizations rose to $169.4 trillion in the fourth quarter of 2024. This increase was largely driven by the rising value of financial assets held by households. Historically, we’ve seen a direct correlation between rising wealth and increased philanthropic activity, which may offer a positive outlook for fundraising.

Last month, we learned from the CASE VSE report that giving to higher education increased by 3 percent in the fiscal year ending June 30, 2024. Similarly, the latest data from the fourth quarter 2024 Fundraising Effectiveness Project (FEP) report shows a rise in total dollars raised, despite a decline in the number of donors. As we’ve noted before, this highlights the importance of successfully engaging individual donors at the mid and lower levels. The FEP report, based on data from 12,504 organizations and 6.7 million donors, shows that total fundraising dollars rose by 3.5 percent in 2024, while the number of donors declined by 4.5 percent. Notably, donors giving under $100 decreased sharply, and overall donor retention fell by 2.6 percent. You can view the full report here.

The FEP findings suggest that large gifts continue to be driven by wealthy individuals, whose giving is closely tied to the broader economic and market performance. Meanwhile, smaller-level donors are declining. This underscores the importance for development professionals to better understand and engage mid-level and small donors.

Bank of America’s “Measuring the Middle” offers valuable insights into middle-income households:

1. Middle-income households earn around $80,000 annually, though this varies by factors such as homeownership and family status. These households tend to skew younger, with Gen Z and Millennials representing a larger share than older generations.
2. Spending growth among this group reflects strong after-tax wage increases.
3. Younger households are spending more due to rising living costs, while older ones are spending more on discretionary services like dining and travel.
4. If the labor market softens, middle-class spending could begin to decline.

Organizations that rely heavily on top-tier donors may be more vulnerable to economic downturns. As federal grants diminish, there’s increasing pressure to diversify revenue sources. One strategy is to engage recent graduates—offering opportunities for mentorship and professional development as they transition into their careers. By combining authentic human interaction with new tools like artificial intelligence, fundraisers can craft more effective strategies to reach donors of all types and giving levels. As we’ve noted, let’s hope that the continued rise in wealth also fuels greater philanthropic support for sectors like higher education.

As always, please feel free to reach out with any questions, comments, or requests for assistance with fundraising research!

Best Regards,
Sapna and USM Advancement Research Team
Read more in this issue of Fundraising Talks>>