Compassion fade is a big way of saying that sometimes people start to care less about helping others the more people there are who need help. Imagine you have a bunch of toys to share with your friends. If you have just one friend, you might share all of your toys with them. But if you have lots of friends, you might not want to share as much, because you think there won't be enough toys to go around.
People can feel the same way when it comes to helping others. If they hear about just one person who needs help, they might be very willing to give them help. But if they hear about lots of people who need help, they might feel less willing to help each individual person. This can make it harder for charities and organizations to get people to donate money or time to help others.
Compassion fade can happen because our brains can have a hard time processing large numbers of people in need. We might feel overwhelmed or think that our individual help won't make much of a difference. But it's important to remember that every small act of kindness or support can add up to make a big impact on someone's life, even if there are many people who need help.