State of Good for Dec 16, 2025
Weekly insights on donor behavior, industry trends, and what’s shaping generosity
⏱️ 4 minutes | Once a week
Donors & Industry Indicators
The Concentration Game: What Happens When Fewer Donors Control More Donations
The philanthropic landscape is experiencing a fundamental shift in how charitable dollars flow. Inside Philanthropy’s analysis reveals that billionaire philanthropy will become increasingly dominant in the coming years, with ultra-wealthy donors having an outsized influence on charitable sector priorities.
This concentration of giving creates distinct strategic considerations for fundraisers. When small numbers of extremely wealthy donors can fund entire sectors, the priorities of those sectors are naturally influenced by fewer decision-makers versus a broader base of mid-level donors.
What This Means for You:
- Organizations whose missions align with mega-donor interests may find unprecedented funding opportunities
- Those working in areas outside current mega-donor focus areas need stronger mid-level donor strategies
- Building relationships with donor-advised fund (DAF) holders becomes critical, DAFs provide flexible, tax-advantaged giving options for donors planning to contribute more than a few thousand dollars
The Retention Revolution: One Simple Change That Triple-Boosted Donor Loyalty
New data shows the average first-year donor retention rate across the nonprofit sector hovers around 15-20%, according to NonProfit Fundraising. That means 80-85% of people who make a first gift to your organization will never give again.
But here’s where it gets interesting: One nonprofit increased its donor retention from 6% to 22% through a single strategic shift. While the sector average remains dismally low, this case study proves dramatic improvements are possible with the right approach.
What This Means for You:
- If your first-year retention is below 20%, you’re leaving significant revenue on the table
- Small changes in donor communication and acknowledgment can yield 3-4x improvements
- Focus on the first 90 days after a donor’s initial gift — this window determines whether they’ll give again
💡 Pure Charity’s features can increase donor retention initiatives
Tax Law Changes: A Permanent Shift in Giving Incentives
The landscape shifted again with the One, Big, Beautiful Bill Act, signed into law on July 4, 2025. This legislation significantly affects federal taxes, credits, and deductions, with permanent incentives to encourage broad-based giving.
For fundraisers, this represents a fundamental change in how donors calculate their giving decisions. The law includes key changes for higher-income donors who itemize deductions, while also creating modest but permanent incentives for all donors.
What This Means for You:
- Update your planned giving materials to reflect new tax advantages by January 2026
- Prepare talking points for major donors about how the law affects their giving strategy
- Consider promoting the permanent incentives in your year-end campaigns to encourage first-time donors
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Why Donors Give?
The Setup: Despite all the talk about tax benefits, research consistently shows that tax deductions rank 7th or lower on the list of why people give to charity.
The Psychology: Behavioral science work from Ideas42 and GivingTuesday reveals that donors are primarily motivated by emotional connection and perceived impact. The feeling of making a difference outweighs financial incentives by a factor of 3-to-1 in donor decision-making.
Try This:
- Lead with impact stories in your appeals, not tax benefits
- Show donors exactly what their gift accomplishes (“Your $50 provides…”)
- Create “impact receipts” that focus on outcomes rather than just tax documentation
- Test emotion-driven subject lines against benefit-driven ones
Go Deeper: The Forces Redefining Philanthropy in 2026
What Changed from Last Week?
The Measurement Revolution in Digital Fundraising
New guidance on crowdfunding KPIs signals a broader shift in how nonprofits measure online campaign success. The focus has moved from vanity metrics (page views, social shares) to conversion-focused indicators that directly correlate with revenue.
Why It Matters: As donor attention spans shrink and digital noise increases, nonprofits that measure the right things will outperform those tracking outdated metrics. The organizations seeing 200-300% improvements in online giving are those tracking micro-conversions throughout their donor journey.
Your Move:
- Audit your current metrics — if you’re not tracking conversion rate by source, start Monday
- Implement the 8 essential crowdfunding KPIs for your next campaign
- Set up automated reporting that shows daily progress against these indicators
- Train your team to read data dashboards, not just campaign reports
Gen Z Enters the Donor Pool
Nonprofit Hub’s analysis shows Gen Z values purpose-driven work and wants to make tangible impact. This generation, born between 1997 and 2012, represents $360 billion in disposable income and is beginning to establish giving patterns.
Why It Matters: While Gen Z may not have the capacity for major gifts yet, they’re establishing philanthropic habits that will last decades. Organizations that engage them now as volunteers and small-dollar donors position themselves for long-term support.
Your Move:
- Create volunteer experiences that lead naturally to giving opportunities
- Develop mobile-first donation pages — Gen Z completes 70% of transactions on phones
- Show immediate impact through real-time giving thermometers and progress updates
- Partner micro-donations with social sharing features
Bottom Line
This week’s takeaway:
The concentration of charitable giving among ultra-wealthy donors is accelerating, but smart fundraisers can thrive by building diversified revenue strategies that leverage new tax incentives, improve retention through behavioral insights, and engage emerging donor segments like Gen Z.
Three actions for this week:
1) Schedule a strategy session to evaluate whether your mission aligns with current mega-donor priorities — then adjust your major gift or mid-level donor focus accordingly
2) Run your first-year donor retention rate and implement one specific change to your new donor journey by Friday
3) Update your website’s donation page with new tax law benefits and test it with five donors for feedback
Good In Action
In Seattle and Nashville, something remarkable is happening. Community members are directly shaping city budgets through participatory democratic practices, proving that engaged citizens can influence how public funds support local nonprofits.
In Seattle, residents allocated $2.7 million in city funds directly to community projects. One participant, Maria Rodriguez, attended her first budget meeting, skeptical that her voice would matter. By the third meeting, she was leading a coalition that secured $180,000 for youth mental health services in her neighborhood. “I went from feeling powerless to realizing I could directly impact which nonprofits received funding,” she said.
The model is spreading; 14 cities have launched similar initiatives this year, channeling $47 million in public funds through community-led decision-making.
The Lesson:
When you give donors real control over specific outcomes, not just asking for money but involving them in allocation decisions, engagement skyrockets. Consider creating donor circles that collectively decide how to allocate pooled funds, or let monthly donors vote on which program receives extra support each quarter. The feeling of control transforms donors from ATMs into advocates.
💡 Pure Charity’s Giving Circle features can support Donor Circle Initiatives.