2024 Food Bank Benchmark Report
As we noted in our end-of-year recap for food banks, 2023 was a challenging year for the nonprofit sector as a whole. Food banks, in particular, were hit on two fronts by inflation:
- Increasing demand for services
- Increasing costs to meet that demand
Economic conditions began to stabilize in the second half of 2023, leaving some uncertainty about how the year-end giving season would play out. Now, we have the data from 62 food banks to share those results.
Here is a look at our top three takeaways:
1. Food banks remain in a strong position.
Overall, we continue to see a stabilization from the highs of the COVID-19 pandemic.
In total, food banks are better off today than they were before the pandemic by $112 million, for an average of $1.8 million more revenue per food bank.
2. Donor value hits a new high.
The average donor value at food banks reached $361—the highest point in history. This can be attributed largely to a lift in gift frequency (up 33% over FY19 and 3% over FY22).
Average gift also went up 1% year over year and is 8% higher than FY19.
3. Soft response rates hampered new donor acquisition.
Food banks saw the number of new donors drop 17.4% year over year. That figure is still up 5.5% from FY19, but food banks were not able to escape industrywide challenges in acquiring new donors.
Based on this benchmark data, RKD’s strategy and decision science experts developed three recommendations for food bank programs going forward:
1. Continue to focus on retention.
Donor retention improved 16% in FY23, but that wasn’t enough. Active donor files still declined 10% year over year.
The acquisition challenges meant that food banks did not bring in enough new donors to offset those lost to attrition. This increases the need to focus on improving retention.
2. Adopt a recapture-first mindset.
Due to the softness of acquisition, food banks must consider investing more in recapturing lapsed donors. This approach paid off in FY23, with a 41.7% lift in recapture revenue over FY22.
There is a great opportunity here to reactivate a large group of “warm” prospects who have previously given, compared to “cold” prospects in acquisition.
3. Use LTN to guide your path.
Long-term net (LTN) is a data-mining tool designed to assess—at the point of acquisition—the net value of a donor across five years. LTN helps nonprofit organizations invest more wisely to achieve a higher financial return.
Through this lens, we can look at factors like seasonality, age and wealth clusters to better optimize growth.
In the following sections, we’ll review the data from 2023 and close the report with a more detailed look at the future recommendations for growth.
What we measured
The 2024 Food Bank Benchmark Report contains full-file data from 62 RKD food bank clients across the United States from Jan. 1, 2019, to Dec. 31, 2023. The data includes overall program metrics, like total revenue, active donors, new donors, retention rate, average gift size, donor value and gift frequency.
Trends are based on all donors and all gift types. Donors with a gift of $10,000 or more were excluded.
Total Revenue
Three years out from the dramatic influx of generosity to food banks during the COVID-19 pandemic, revenue remains up 66% over pre-pandemic conditions in FY19.
Revenue in FY23 was down 6% year over year, roughly $18.5 million. Nevertheless, food bank revenue is in a much stronger position today than yesterday (FY19).
Cultivation
Much of the revenue growth since FY19 can be attributed to food banks’ cultivation programs. In FY23, cultivation accounted for 85% of revenue.
Cultivation is up $101 million since FY19, but it declined $16.3 million (6.3%) year over year despite a 16.1% bump in retention.
Acquisition
New donors accounted for $29.5 million in FY23—10.5% of gross revenue. That’s $5.6 million more than FY19 but $5.8 million less than FY22 due to soft response rates.
Recapture
Recaptured donors accounted for $11.9 million in FY23—4.2% of gross revenue. That’s $3.5 million more than FY22 and the highest since FY20.
Active Donors
Active donors are down 10% year over year but remain up 28% compared to FY19. The decline in FY23 is primarily due to regression within cultivation.
Retention
Donor retention rate improved 16.1% year over year. However, that increase was not strong enough to offset the attrition rates of donors moving out of core.
This chart breaks down the retention floor and ceiling by donor lifecycle. All numbers for FY23 fall within the expected range.
In order to balance attrition, retention must be improved—particularly the retention of transition donors, which sat at 31.8% in FY23.
Average Gift
Average gift size remained relatively flat (up 1% or $1.27) year over year. An average gift of $131 in FY23 marks an 8% increase over FY19.
Looking again at our different donor lifecycles, we see that all dollar amounts fall within the expected range of outcomes.
Gift Frequency
As food banks have focused more on their sustainer programs, gift frequency reached a new height of 2.75 in FY23. That’s a 3% lift over FY22 and a 33% jump since FY19.
Each lifecycle fell within the expected range. However, overall gift frequency broke through its previous ceiling, thanks largely to the weight of cultivation.
Donor Value
Driven by gift frequency, donor value also reached its highest point in history. The donor value of $361 in FY23 is a $15 (4.3%) increase over FY22 and an incredible $88 (32.2%) lift over FY19.
All lifecycles showed strength in donor value, contributing to a new ceiling in FY23.
Our decision science team wanted to go one step further in our benchmark report to examine some notable digital statistics.
RKD gathered the digital data on 28 food bank clients. We then appended CRM data to get an omnichannel view on these clients with channel-level business rules.
Paid Media Investment
Food banks spent 43.2% of their digital media investment in the last two months of the year. A full-funnel approach and an always-on strategy pays off.
Single vs. Recurring Gifts
Creating a dedicated strategy for a sustainer program builds an important foundation for recurring gifts.
In FY23, 28% of digital revenue for food banks came from sustainers. And those recurring gifts averaged $48, compared to $221 per average single gift.
Email KPIs
Curious about other email programs? Here’s a look at some averages across the food bank space.
Improve Core Donor Retention
Core balance index (CBI) is a measure of how well an organization is doing in replacing the number of donors moving out of core. A CBI of 1.0 is a perfect balance. Above 1.0 means you’re growing your core, while below 1.0 means you’re losing core donors.
In the last two years, food banks have not been able to offset the loss of core donors through acquisition or cultivation. Thus, active donor files have shrunk.
Moving forward, retention of transition and core donors must be a top priority—especially with recent challenges in the acquisition space. This is especially critical because it takes more than two new donors to replace every core donor lost.
Adopt a Recapture-First Mindset
Food banks should also adopt a recapture-first mindset to help offset acquisition softness. This area was a bright spot in FY22 and FY23 and must continue to grow.
These 25+ month donors are aware of your organization and showed an affinity for you previously. This alone provides more value than a potential new donor, who may not be aware of your organization and your mission.
Use LTN To Guide Your Way
Fundraisers have long used lifetime value (LTV)—the amount of projected revenue across a donor’s lifetime—as a metric for targeting donors. Long-term net (LTN) is a better metric because it calculates both the revenue and the cost of a donor relationship over a five-year period from the point of acquisition.
This chart shows that year-end season accounts for 60.3% of new donor acquisition.
In a year that will feature a presidential election on Nov. 5, looking for acquisition opportunities outside of Q4 will be helpful. Using LTN as a guide, we can see that investments in January, February, June and July have returned high-value donors.
Food banks continue to reach Baby Boomers, who have the highest LTN of any generation.
However, in the last three years, we’ve seen an increase in new donors from the lowest LTN group (the Silent Generation) and a decrease in new donors from Generation X. Food banks must make more efforts to reach Gen Xers, the next big cohort of wealth.
Measuring LTN by geographic footprint, we can break acquisition down into three wealth clusters.
Food banks are acquiring 46% of their new donors from the middle cluster and 24% from the high cluster. Food banks must push the high-wealth cluster closer to 40% in order to grow.
RKD Group is North America's leading fundraising and marketing solutions provider to hundreds of growth-focused nonprofit organizations. With five decades of experience, RKD leverages technology, advanced data science and award-winning strategic and creative leadership to accelerate net revenue growth, build long-term donor relationships and drive the best return on investment.