How do you forecast fundraising revenue for a nonprofit budget?

Build it by donor segment. For each group, multiply the number of donors expected to give again by their gifts per donor and their average gift. Forecast major donors one by one, add new-donor acquisition as its own line, and show any gap against a top-down target as a list of named plans.

Why not just budget last year plus a percentage?

Because it assumes every lost donor is replaced. In 2025 only 18.9% of first-time donors and 59.3% of repeat donors gave again (FEP Q4 2025). A flat percentage hides how much of next year's revenue must come from new or returning donors, and what finding them will cost.

What retention rate should I use in a budget?

Your own, by segment. Sector rates such as FEP's 43.3% overall retention for 2025 are useful for comparison, but a budget built on your own first-time, repeat, and major-donor rates will be more accurate for your organization.

Will the new tax law increase donations in 2027?

The IU Lilly Family School's model estimates the 2026 tax changes lower U.S. giving by about $5.69 billion a year, roughly 1%, against prior law, while adding about 8 million giving households. That suggests more small donors and less top-end giving, so budget modestly and confirm major donors' plans individually.

When should a nonprofit build its fundraising budget?

Many boards approve next year's budget in November or December. Build the segment forecast from actual results through the third quarter, then update it in January once year-end giving is counted, and review it by segment every quarter.

Donor economics

Nonprofit Budget 2027: Forecast Revenue From the Donors Who Stay

First-quarter 2026 data shows dollars rising while donor counts fall. This guide shows why a 2027 revenue budget should be built segment by segment from the donors likely to stay, and works one for a fictional organization.

By Donor Insights · Published November 1, 2026 · Updated September 25, 2026 · 8 min read

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Key takeaways

In the first quarter of 2026, dollars raised grew 4.3% while the number of donors fell 0.8%, compared with the first quarter of 2025 (Fundraising Effectiveness Project).
A budget built as last year's total plus a growth percentage assumes that every lost donor is replaced, even though only 18.9% of first-time donors and 59.3% of repeat donors gave again in 2025 (FEP Q4 2025).
A segment-built budget multiplies, for each group of donors, the number expected to give again by their gifts per donor and their average gift, then adds a separate line for new donors.
In an illustrative budget for a fictional $520,000 organization, the segment build forecasts $386,280 from the segments in the plan ($322,280 from donors already on file and $64,000 from new donors not yet acquired), $159,720 short of a last-year-plus-5% target, and the difference becomes a list of named plans.
The IU Lilly Family School models the 2026 tax law at about $5.69 billion a year less U.S. giving than prior law, about 1%, while adding about 8 million giving households, so a 2027 budget should not assume the tax law will lift giving.

A 2027 nonprofit budget is more accurate when revenue is forecast from the donors likely to stay than when it is set as last year's total plus a percentage. The reason is visible in the sector's newest data. In the first quarter of 2026, dollars raised grew 4.3% while the number of donors fell 0.8%, compared with the first quarter of 2025, according to the Fundraising Effectiveness Project (FEP), which tracks giving across about 15,700 U.S. nonprofits in its first-quarter 2026 panel, as reported in its July 2026 release. More money from fewer people is a pattern a single growth percentage hides. A budget built segment by segment, from how many donors are expected to give again, how often, and how much, shows where next year's money is coming from and where it is not.

What does the 2026 data say about next year's revenue?

The pattern of more dollars from fewer donors is several years old. FEP's Q4 2025 report, covering 15,102 organizations, found that giving grew an estimated 5.0% in 2025 while donor counts fell an estimated 3.6%, and that overall donor retention, the share of last year's donors who gave again, edged up to 43.3%. In the first quarter of 2026 the decline in donors slowed to 0.8%, and FEP reported that donor counts and dollars grew in every donor segment except Micro donors, those giving $1 to $100.

Two cautions apply to the 2026 figure. First, FEP's own reading is that "some of it was likely borrowed from an active Q4," and it warned that "the second half of 2026 could prove tougher as a result." In other words, FEP suspects some of the strong late-2025 giving was pulled forward from later, which argues for caution in 2026 and 2027 forecasts. Second, the Q1 2026 report introduced FEP's first major methodology update in five years, changing how organizations enter and leave the panel, how late-arriving gifts are counted, and how organizations are weighted, as the NonProfit Times reported. Treat year-over-year comparisons across that change with care.

+4.3% vs -0.8%

change in dollars raised against change in number of donors, first quarter of 2026 compared with the first quarter of 2025 — Fundraising Effectiveness Project, Q1 2026 report (July 2026)

The donors who stay are also giving more. The Virtuous 2026 benchmark report, drawn from 771 mid-sized and large U.S. nonprofits, found that in 2025 the median gift "increased approximately 20%" and donor lifetime value, the total a donor gives over their whole relationship with an organization, "grew nearly 18%." Donors there averaged 4.15 gifts a year. Those figures describe larger organizations than most, so they are a direction rather than a benchmark for a small shop.

Why does a last-year-plus-5% budget fail?

A budget line that reads "individual giving: last year plus 5%" carries an unstated assumption: that every donor who stops giving will be replaced by someone who gives as much. Sector retention says that assumption is large. In 2025, only 18.9% of first-time donors gave again the next year and 59.3% of repeat donors did, according to FEP's Q4 2025 retention by donor type. A growth percentage applied to the total quietly counts on new donors, returning donors, and larger gifts to fill that gap, without naming any of them or budgeting what they cost to find.

The same budget also hides where growth came from. If last year's increase came from a handful of larger gifts while smaller donors drifted away, then a flat percentage forecasts the mix to repeat. Across the sector, the FEP Q4 2025 report found that 2025's growth came almost entirely from its two largest donor segments, Major and Supersize donors. A board that sees only the total cannot tell whether the organization is building a broader base of donors or depending on fewer of them each year.

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How do you build a nonprofit budget from the donors who stay?

The method multiplies three numbers for each group of donors: how many are expected to give again, how many gifts each makes in a year, and the average gift. The groups can be as simple as repeat donors, first-time donors, and major donors, with a separate line for new donors the organization plans to acquire. Each line uses the retention rate, gifts per donor, and average gift that group actually produced, which is why the budget ends up explaining itself.

The example below is for a fictional organization, Riverside Tutoring Collaborative, which raised $520,000 from individuals in 2026. The figures are illustrative. The retention rates are FEP's 2025 sector rates, used here to show the arithmetic. Your own file's rates should replace them.

Illustrative 2027 revenue budget built by donor segment for a fictional organization, Riverside Tutoring Collaborative (hypothetical file, FEP 2025 retention rates)
Segment	2026 donors	Rate used	Expected 2027 donors	Gifts per donor	Average gift	2027 revenue
Repeat donors	1,200	59.3% retained (FEP)	712	2.0	$112.50	$160,200
First-time donors	800	18.9% retained (FEP)	151	1.0	$80	$12,080
Major donors	20	Forecast one by one	16	1.0	Varies	$150,000
New donors to acquire	None yet	Acquisition plan	800	1.0	$80	$64,000
Lapsed donors who return	Not yet giving	Your own file's return rate	From your history	From your history	From your history	Budget only from your own history
Total from identified segments						$386,280

The segment build forecasts $386,280 from the segments in the plan: $322,280 from donors already on file and $64,000 from 800 new donors the organization has not yet acquired. A last-year-plus-5% budget would have set the target at $546,000. The $159,720 difference is money the growth percentage assumes will appear without a plan. Put that way, the gap becomes a set of decisions the board can see: raise repeat-donor retention, bring back lapsed donors, acquire more new donors, or grow average gifts, each with an owner and a cost. Our guide to net revenue retention shows how to measure the dollars kept from last year's donors alongside the headcount.

$159,720

gap between a last-year-plus-5% target and a segment-built forecast for a fictional $520,000 organization, before any plan to close it (illustrative) — Illustrative calculation using FEP Q4 2025 retention rates

Should a 2027 budget assume the new tax law raises giving?

No. The IU Lilly Family School of Philanthropy, in a study presented by CCS Fundraising in March 2026, modeled the 2026 federal tax changes in P.L. 119-21 against the rules that would otherwise have applied. It estimated U.S. giving about $5.69 billion a year lower, roughly 1%, while about 8 million more households give. The estimate suggests more small donors and less from high-income households, whose deductions shrink under the new rules. For a budget, that points toward modest assumptions: a possible rise in the number of small donors, and caution about top-end gifts until your own major donors' plans are known. The model compares against prior law, so it does not forecast that giving will fall below 2025 levels.

How do you present a segment budget to the board in November?

1.Start from last year's actual revenue by segment, with each segment's donor count, retention rate, gifts per donor, and average gift.
2.Forecast each segment from its own rates, and forecast major donors one at a time from the conversations your team has had.
3.Add new-donor acquisition as its own line, with its expected cost beside it.
4.Show the gap between the segment forecast and any top-down target, and assign each part of the gap to a named plan with an owner.
5.Review the budget by segment each quarter, so a shortfall in one group is seen in April rather than in December.

A segment budget is only as good as the rates you feed it, and the best rates are your own. Donor Insights reads your contacts and gifts, so each segment's retention, gifts per donor, and average gift come from your own file rather than a sector average. The methodology starts from your own giving records, and the platform tracks the same segments through 2027, so the board sees each quarter how the donors who stayed are carrying the plan. For the other numbers worth watching alongside the budget, see our fundraising KPIs guide.

Frequently asked questions

How do you forecast fundraising revenue for a nonprofit budget?: Build it by donor segment. For each group, multiply the number of donors expected to give again by their gifts per donor and their average gift. Forecast major donors one by one, add new-donor acquisition as its own line, and show any gap against a top-down target as a list of named plans.
Why not just budget last year plus a percentage?: Because it assumes every lost donor is replaced. In 2025 only 18.9% of first-time donors and 59.3% of repeat donors gave again (FEP Q4 2025). A flat percentage hides how much of next year's revenue must come from new or returning donors, and what finding them will cost.
What retention rate should I use in a budget?: Your own, by segment. Sector rates such as FEP's 43.3% overall retention for 2025 are useful for comparison, but a budget built on your own first-time, repeat, and major-donor rates will be more accurate for your organization.
Will the new tax law increase donations in 2027?: The IU Lilly Family School's model estimates the 2026 tax changes lower U.S. giving by about $5.69 billion a year, roughly 1%, against prior law, while adding about 8 million giving households. That suggests more small donors and less top-end giving, so budget modestly and confirm major donors' plans individually.
When should a nonprofit build its fundraising budget?: Many boards approve next year's budget in November or December. Build the segment forecast from actual results through the third quarter, then update it in January once year-end giving is counted, and review it by segment every quarter.

Sources

Disclaimer

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