The Donors Are Leaving.

The collapse of grassroots giving is a transfer of power. For 20 years, our sector has answered it with fundraising tactics. I’ve spent 25 years teaching nonprofit leaders how to ask people for money. The lesson I keep having to unteach today is the one we taught them.

The Numbers

Total charitable giving in the United States reached $617.2 billion in 2025, crossing $600 billion for the first time.¹ That headline has been getting a lot of use since June as evidence that the sector is resilient, that generosity is alive, that things are fundamentally okay.

They are not okay. Let's look past the headline.

Twenty million fewer American households donate today than in 2000.² The share of households that give has dropped from 67 percent to about half.³ Three percent of donors now provide 78 percent of all charitable dollars.⁴ And 2025 was the fifth consecutive year the number of donors declined, down another 3.6 percent even as dollars grew five percent.⁵ One in four Americans plans to cut charitable giving in 2026.⁶

The record giving is real. So is the collapse of the giving base. Both are true at once because the money that used to come from millions of small and mid-level donors now comes from a much smaller number of large ones. The pie grew. The number of hands holding it is smaller.

SECTOR MATH: Three percent of donors now provide 78 percent of all charitable dollars.⁴ Look at your own portfolio through that lens: for every 100 donors, three are carrying more than three-quarters of your budget. Lose one of those three and you’re down a quarter of your revenue. Lose all 97 of the others and you’re down 22 percent. Now ask which group gets your board’s attention, and which group votes, volunteers, and shows up when your funding is attacked. That’s the trade-off the sector has made.

The sector’s response to this collapse has been, almost universally, to chase the money upward. Major donor programs. Foundation relationships. Government contracts. Planned giving from high-net-worth individuals. These are all rational responses to where the money went. They are also how the sector surrendered its democratic accountability without quite noticing what it was giving up.

The Lesson the Sector Taught Itself

I want to be direct about where I’m writing from on this one. I’ve spent 25 years in workshops and training rooms helping nonprofit leaders, executive directors, and boards understand individual giving. The philosophy first. The tactics second.

The argument I’ve been making since the early 2000s is simple: individual donors are your best money. The broad base of ordinary people who give at whatever level they can, motivated by a genuine connection to your mission, is the most sustainable, most accountable, and most democratically legitimate form of organizational funding that exists. That money comes with fewer strings. It builds relationships rather than dependencies. And it creates a constituency that holds you accountable to the communities you serve rather than to the priorities of a single large funder.

The sector heard that argument and largely set it aside. Rationally, even. Foundation grants were bigger. Government contracts were more predictable. Major donor programs required less staff time per dollar raised. The math of organizational survival pointed away from the slow, relationship-intensive work of building a broad individual donor base and toward the faster, larger, more efficient alternatives.

Now those alternatives are under pressure simultaneously. USAID is gone. Foundation payout hovers near the legal minimum. And the individual donor base that could have been the sector’s foundation, built over decades of relationship investment, was allowed to erode. I don’t say this to be right. I say it because understanding how we got here is the only way to understand what comes next.

The Power Story

The conventional framing of the giving collapse is a fundraising problem. Donor acquisition costs are too high. Retention rates are too low. Year-end campaigns aren’t converting. Fix the tactics, fix the problem.

That framing misses what’s actually happening. Apply the Power Map: who gains power in this shift, and who loses it?

When 93 percent of high-net-worth donors plan to maintain or increase their giving⁷ while one in four ordinary Americans plans to cut theirs, the giving base is stratifying. The sector is becoming more dependent on fewer people with more money, more opinions about where it goes, and more leverage over the organizations that others depend on.

This is the power story the fundraising conversation leaves out. Individual donors at the grassroots level provide revenue, and they provide something rarer: democratic legitimacy. An organization with 10,000 donors giving $50 each is accountable to 10,000 people and their communities. An organization with one donor giving $500,000 is accountable to one person and their priorities. The math is the same. The accountability structure is completely different.

Foundations understand this, which is why trust-based philanthropy has become such a popular framework. It’s an attempt to restore some of the democratic accountability that concentrated giving erodes. As I noted in Issue #1, though, only 10 percent of foundations have actually transferred decision-making authority to communities. The rhetoric has moved faster than the practice. And in the meantime, the broad donor base that provided genuine accountability without requiring a framework or a policy has continued to disappear.

The structural vs. individual reframe matters here. The sector frames the giving collapse as donor fatigue, a communications problem, and an engagement problem. Each of those framings locates the failure in individual donors or individual organizations. The structural reality is different. The giving collapse reflects decades of organizational choices that treated individual donors as a funding source to be optimized rather than a community to be built. You can’t optimize a relationship. You can only invest in it or neglect it. The sector neglected it, rationally and at scale, and the donors left.

The sector is carrying a leaking bucket at full speed. Overall donor retention was 43.3 percent in 2025, meaning nearly six of every ten donors from last year are gone this year. Among first-time donors, four of five never give again.⁸ No acquisition strategy can outrun that math. The only fix is treating donors like people rather than transactions.

What Individual Giving Actually Requires

Here is what I’ve learned from all of those years of raising money and teaching others how to do it: the organizations that retain donors are the ones that never confuse fundraising with asking for money.

Asking for money is a transaction. Fundraising, done right, is the practice of connecting people to something they care about and inviting them to act on that connection. The ask is almost incidental. What matters is everything that comes before it and everything that comes after. Do donors know what their gift accomplished? Do they feel like part of something rather than a line item in someone’s budget? Are they thanked in ways that feel human rather than automated?

I used to tell organizations in my workshops: your job is to ask, their job is to decide. Before you can ask, though, your job is to make them care. Making people care is relationship work. You can’t automate it, you can’t outsource it, and you can’t fix it with a better email subject line.

The organizations I’ve watched retain donors over decades share one characteristic. They treat giving as an act of community membership. Their donors feel like stakeholders, and even when things go wrong, stakeholders stay. Donors who feel like transaction partners leave for a better deal.

The evidence for this is old and sturdy. In 2006, Americans gave $295 billion to charity, and more than three-quarters of it came from living individuals, ordinary households giving to organizations they felt connected to.⁹ That connection was built by organizations that made people feel their participation mattered beyond the check. No CRM system ever built that. No year-end appeal either.

Those organizations still exist. They’re just not the ones held up as models in the sector’s fundraising conversation, because their approach doesn’t scale the way a major donor program scales, and it doesn’t produce the efficiency metrics that funders and boards like to see. It produces something harder to measure and more durable: loyalty.

Where This Is Going

Here’s the forward-looking read. The giving collapse is not going to reverse itself. The structural conditions driving it, wealth concentration, declining civic participation, and the erosion of community institutions that historically connected people to causes, are generational shifts, not short-term trends.

That means the sector faces a choice, and it needs to make it consciously rather than by default. The default is to continue chasing concentrated money upward: larger gifts from fewer donors, deeper foundation relationships, whatever government funding survives, and vendor philanthropy from AI and technology companies filling the gaps. That path is available. It is also the path toward a sector that is structurally beholden to the priorities of a small number of powerful funders and increasingly disconnected from the communities it claims to serve.

The alternative is to treat rebuilding a broad individual donor base as a strategic priority rather than a tactical afterthought. It is slower. It is harder. It is also the only funding model that produces the accountability structure a civil society organization needs to do its work with integrity over the long term.

This means investing in donor relationships before they’re needed. It means treating thank-you calls and handwritten notes as strategic priorities rather than nice-to-haves. It means building programs around community ownership rather than service delivery. It means measuring donor retention with the same seriousness that organizations measure program outcomes. And it means having honest conversations with boards about the investment required to build a broad donor base, including the years it takes before that investment pays off.

The organizations that do this work now, while it’s still possible to build something, will have a fundamentally different accountability structure in 10 years than the ones that don’t. One group will answer to its communities. The other will answer to whoever is writing the largest checks.

That is a structural prediction, not a values statement. The pattern is clear. The choice is still available. The window for making it is narrowing.

The AI Seduction

Artificial intelligence is changing fundraising faster than most organizations realize, and mostly in ways that look like solutions to exactly the problem this issue describes.

The pitch is compelling. AI can analyze donor behavior, giving history, communication preferences, and engagement patterns to generate outreach that feels personal, arrives at the right moment, and speaks to what each donor actually cares about. For organizations that have always known relationship-building works and never had the staff capacity to do it at scale, this feels like the answer they’ve been waiting for.

Some of it genuinely is. AI-assisted outreach, done thoughtfully, can free up staff time for the human moments that actually build loyalty. It can help a development director of one manage a donor portfolio that would otherwise require a team. It can surface the right donor for a specific conversation at the right time. These are real capabilities, and organizations that ignore them will be at a disadvantage.

But personalization at scale is still scale. A donor who receives a message that feels personal because an algorithm analyzed their giving history and generated the right language has been processed, efficiently and elegantly, without ever once being seen. The AI tool now knows them; your organization still doesn't.

The donors who stay for decades stay because someone called them after a hard year and asked how they were doing. Because the executive director remembered their kid’s name. Because they felt, genuinely, that their participation in the mission mattered to people who would notice if they stopped. That experience cannot be generated. It can only be given by humans who actually care, making it a priority in a sector that chronically underinvests in anything that doesn’t show up cleanly in a grant report.

The real risk is more subtle: organizations mistaking sophisticated processing for a genuine relationship and using the efficiency gains to avoid the harder investment entirely. AI that automates the logistics of donor communication while freeing humans to do the irreplaceable work of actually knowing people is a powerful tool. AI that replaces human work because it’s cheaper and faster is a more elegant version of the transactional thinking that eroded the giving base in the first place.

The organizations that will rebuild their donor base over the next decade will use both. They’ll let AI handle what AI does well. And they’ll treat the time that frees up as an obligation to be more human.

THE QUESTION

When did your organization last treat a donor like a community member rather than a funding source? And what would it cost, in time and attention, to do that systematically?

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