You may be wondering where to focus your fundraising as we emerge from the fog of 2020 and into, perhaps, a less cloudy future when it comes to nonprofit giving trends.
Wonder no more.
The data is available, and we know dire predictions of the death of philanthropy early in the pandemic have been disproved. People continued to give more generously than before – often referred to as a “bump” – and the predicted “slump” never really arrived.
Charitable giving was up in 2020, and projections for nonprofit giving trends in 2021 and 2022 are even rosier.
I am not surprised, because I’ve been doing this work for four decades and it’s been ever thus. Giving in the U.S. has hovered around 2% of GDP ever since it began being measured post W.W.II. No matter what happens in the economy or world, be it war, recession or natural disaster, people who can help DO. Some say humans are wired this way.
Charities feared last year donors would lose jobs, see income diminish, worry their nest eggs were insecure, and would consequently stop giving. Some did. But people are generous, and generally want to help.
- For every donor who decreased their giving, another donor increased theirs.
- Or a new donor responded with bigheartedness to an emergency appeal.
- Or people simply chipped in what they could.
Nonprofit Giving Trends on the Horizon
Big hearts will respond to big-hearted, authentic, clearly-articulated, specific and resonant appeals. Appeals that make a strong case for why support is needed now – during a crisis and any other time — and how that support will be used to make a demonstrable impact.
This is what happened in 2020. When charities made their case, donors answered the calls to action with remarkable generosity. And projections from the Lilly Family School of Philanthropy at IUPUI in Indianapolis show it’s likely to happen again. In fact, charitable giving is expected to increase 4.1% and 5.7%, respectively, this year and next, buoyed by individual giving (+6% and +3.9%) and estates (+ 1.1% and +11.9%). Foundation and corporate giving are also projected to increase.
This is good news. It’s indicative of what I call “circle of life” theory. At particular points in their lifetimes, sometimes folks are on the giving end; sometimes on the receiving end.
But the circle can be broken. And that’s what happened with charities who froze in fear. Who didn’t solicit their donors, or did so more infrequently than usual. Who laid off their fundraising and marketing staff, and cut back on donor communications. Who tightened belts, cut back on programs that inspired donors, and especially budgeted less for ‘non-essentials’ like fundraising and marketing.
Nothing Comes from Nothing
If you rely on contributed income, fundraising and marketing are essential.
I tell nonprofits this all the time.
- You must spend money to make money.
- You must allocate human resources to strategically plan and implement development strategies.
- You must initiate communications to connect dynamically with likely supporters.
- You must proactively practice the craft of fundraising to reap active participation in philanthropy.
Fundraising should be viewed as a revenue center. If instead you think of it as a revenue-sucking cost center, fundamentally only about money, you’ll always consider it a “necessary evil” at best. This puts fundraising in an awkward and distasteful place. No one wants to be associated with it unless they absolutely have to. Development staff, and even development board committees, are shoved to a corner and ordered to “go raise money.” To the extent possible, nonprofits try to involve as few other people as possible so as not to expose them to all this nastiness.
The problem with viewing fundraising as primarily about money – still a largely taboo subject in our society – is it creates a tendency is to avoid the subject as much as possible. Especially during times when the economy is doing somersaults and people are nervous.
Sadly, while you may not overtly irritate anyone if you stop or cut back on fundraising, you certainly won’t fill anyone with joy either. And that’s a shame. Because, my friends, delivering happiness is the job of a true philanthropy (translated from the Greek as “love of humanity”) facilitator. Or as my mentor and teacher Hank Rosso said years ago: “Fundraising is the gentle art of teaching the joy of giving.”
People Yearn to Express their Love
Your job is to help them do so.
Philanthropically.
By practicing the gentle art of fundraising.
Because people want to come from a place of love. They want to do unto others as they would have others do unto them. They want to share their blessings. They want to find a higher purpose.
This has ever been the case.
I may want to help end homelessness, but not have a clue how to make a difference on a scale that moves the needle. I may want to see more kids from marginalized communities attend college, but not know where to begin. I may want to assure no one has to suffer from dementia like my grandmother, but have no understanding of science, medicine, or the scope of the problem. In these cases, having a nonprofit reach out to me with a vision, mission, demonstrated outcomes and plan to get the job done – with a clear place for me to plug in my assistance — would be a blessing.
Where is the Love?
It’s where it’s always been: individual giving. Both outright (annual and major gifts) and deferred (legacy gifts).
These are the fundraising programs where most charities get the biggest bang for their buck. It costs from 5 to 25 cents on the dollar to renew current donors and/or generate major, capital and legacy gifts from individuals. This doesn’t mean you have to jettison new donor acquisition ($1.25 to raise $1), special events ($1.50 to raise $1), business and/or foundation grants ($0.20 to raise $1). It’s always wise to diversify your income streams. But prioritizing securing the type of love that will sustain you throughout your life makes a whole lot of sense.
Individual donors stick with you if properly cultivated and asked, and will often include you in their estate plans if you’ve made them feel like members of your family. Now that you know who to target in the coming months and years, what can you do to make a noticeable difference in your fundraising results? My first piece of advice is this:
Prioritize sustainable individual donor and legacy fundraising if you’re not doing so already. Stop doing so many one-off campaigns, events and auctions that raise money short-term, but really are one-time transactions. Instead, strive for transformational strategies that have long-term ripple effects.
I have some favorite tips that will work for nonprofits of any shape and size. We’ll cover them over this 3-part article series. They’re simple, yet too infrequently used as part of a thoughtful, consistent plan. I’ve used them over and over – and they work!
Easy-to-Implement 2021-2022 Fundraising Strategies
1. First, Some Broad Brush Strokes
The easier you can make it for people to express the love, the more likely they are to do so. Likewise, the easier you can make it for your organization to receive donations, the more you will secure your future.
As you plan ahead for the coming years, begin by asking yourself:
- What creates ease for the donor?
- What creates ease for you?
2. Make Giving to You Easy
For the donor, creating ease means making it easy to find you, easy to know what you need and want, and easy to complete a donation. Per Firespring website experts, 81% of nonprofits have “Frankenstein websites” built out of spit and chewing gum — usually for $1,000 or less. Alas, as a consequence, they’re stale, difficult to navigate and when visitors want to engage, they’re sent elsewhere (e.g. to Paypal or an off-site website form) to do so. This can be confusing at best; destructive of trust at worst.
It’s a good time to evaluate where you may have gaps in your technology. Though still only 13% of total philanthropy, online giving as a percentage of total giving nearly caught up with online consumer spending as a percentage of total spending this past year. You can accomplish a lot through a user-friendly website and donation landing pages.
Did you know 8 out of 10 who make it to your donation page don’t end up donating?
ACTION: Conduct a website self-audit. The simplest thing to do is take the time to pretend you know nothing about your organization. Ask a friend or two to do this too. If you ended up on your website, would you want to take time to poke around and learn more? Would you consider joining your mailing list? Would you want to donate? If not, why not?
ACTION: Commit to making your website the foundation of your marketing and online fundraising strategy. Look at the following: (1) Does it have an intuitive navigation structure? (2) Does it have design elements that tell a story with words and pictures? (3) Does it have diverse content relevant to visitors? (4) Does it have a content management system that makes it easy to update without having to outsource this or rely on one IT staff person? (5) Does it have functional online tools that make it easy for folks to engage with you online (e.g., sign-up forms; donation pages; event registration)? (6) Is it freshly updated on a regular basis so it doesn’t look stale and irrelevant?
3. Make Receiving New, Renewed and Upgraded Gifts Easy
For you, creating ease means using leveraging strategies like corporate matching gifts, individual, organization or foundation challenge grants, peer-to-peer campaigns, and more-or-less automatic upgrading through tribute and monthly giving programs, and retention strategies like gratitude and ongoing cultivation and stewardship to reassure donors they’ve made a good decision investing with you.
ACTIONS: Take stock now of the LEVERAGING strategies you currently employ. Are you being thoughtful and proactive, or are these afterthoughts?
- For example, do you promote corporate matching gifts or just accept them when a donor is proactive?
- Do you take initiative to secure individual (can be anonymous), community or board challenges or foundation challenge grants for annual, capital, project-specific and/or giving day campaigns, or just accept them when a donor approaches you?
- Do you leverage the power of your current donors by engaging them in peer-to-peer campaigns that make their friends your friends?
- Do you multiply the number of gifts made by your donors by promoting tribute giving?
- Do you boost the likelihood donors will stick with you, and also likely give more, by enrolling them in a monthly giving club?
ACTIONS: Take stock now of the RETENTION strategies you currently employ. Are you being thoughtful in managing these strategies, or are they on your back burner?
- Do you have a written donor love and loyalty plan, with assigned responsibilities, tactics and timelines you prioritize as much as donor acquisition?
- Do you have an intentional gratitude strategy that sets the stage for future gifts and actually inspires donors to upgrade their own giving?
If you’re not actively endeavoring to piggyback on current donors and donations to cost-effectively boost your revenues, make a list of things you could do better.
NOTE: Each of these programs bears its own discussion, so feel free to click on the links offered above. I’ll also suggest specific strategies in my next two articles in this 3-part series.
Closing Thoughts
Organized and integrated with other strategies, the broad brush strategies above will build your well-oiled 21st century fundraising engine. It’s a big project, I know. But I’m guessing you also have a big vision and mission. One big dream deserves another. And if you take it step by step, it’s not that difficult. You should take it on and enlist others in your organization to play their parts.
People will respond when you make a compelling case for support and make giving to you easy and fulfilling. They’ll continue to respond over time, by renewing, upgrading and even leaving legacy gifts, if you continue to show them the meaningful impact of their philanthropy.
Nonprofit giving trends come and go. It’s good to be aware of them to adapt your messaging and evolve your tools. Yet the principles of good fundraising are evergreen.
In my next article of this two-part series with simple suggestions for smart fundraising strategies to take advantage of best practices and current nonprofit giving trends, “8 Tried-and-True (Secret) Individual Donor Fundraising Action Tips,” I’ll offer up some “secret sauce” – simple, yet incredibly powerful, action tips for securing and sustaining individual donations.
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