Giving Trends and Donor Relations
Strategic Philanthropy
While a lot has been made of “disruptors” coming into philanthropy—Sean Parker’s “Hacker Philanthropy” op-ed in The Wall Street Journal and the Chan Zuckerberg Initiative—that’s really just the tip of the proverbial iceberg. Below the surface we’re seeing a disruption of the entire philanthropic iceberg. Donors of all sizes are focusing their giving, asking metrics-focused questions about impact and are contemplating the return on their philanthropic investment.
Donors are becoming philanthropists and investors, and will require different types of information, greater transparency and access to leadership. As their needs evolve so must our approach to meeting them. In 2016, we’ll continue to see individuals giving larger gifts to fewer organizations.
—Craig H. Shelley, CFRE, vice president, board of directors, Association of Fundraising Professionals, New York City Chapter; and vice president, Orr Associates Inc. (OAI)
Fewer Donors
The consolidation of wealth in the U.S. continues. According to some reliable sources, more than 95 percent of the charitable gifts given in the U.S. will be made by fewer than 5 percent of all Americans. This fact will not only increase the competition among nonprofits for charitable donations—it will also change who charities market to and how they market to/engage them. At the same time, growth in new economies overseas may send some U.S. charities abroad looking for donors. Wherever they go, fundraisers will need to understand the needs and desires of wealthy donors and treat gifts to charity as though they are a luxury good.
—Mark Hefter, president, Association of Fundraising Professionals, New York City Chapter
Investment in Nonprofit Operations
For a very long time, there has been resistance to support operational and administrative costs for nonprofits. Donors have preferred to restrict their support to programs. This created what has been coined as the “nonprofit starvation cycle.” Nonprofits have been rewarded for spending as little as possible on operation costs, hence starving many organizations of necessary funds for research and development, talent acquisition and infrastructure building. With increased business practices entering the nonprofit space, donors are increasingly investing in operations to help ensure sustainability and scale.
—Wayne Elsey, CEO, Elsey Enterprises
Community Giving
Organizations will see more collaboration on the local level as donors have an increased desire to make an impact in their local communities. We have seen huge success when communities and nonprofits come together with corporate sponsors in large community-based giving days. These programs—Give Local America, North Texas Giving Day, Give to the Max Day and many others—benefit many organizations, both small and large, under one unified umbrella.
—Miriam Kagan, senior principal, Kimbia
Donor-Centric Is the New Standard
If “donor-centric” was the buzz term of 2015, 2016 will be the year of making good on the donor-centric promise. Organizations will invest in cultivating these critical relationships. How? They will mail or call donors just to say thank you, with no ask. They will segment and personalize copy to like-minded groups of donors. Organizations will also test the long-term value of such treatment. 2016 is where forward-thinking organizations will implement strategies that are truly donor-centric.
—Angela Struebing, president, CDR Fundraising Group
More Reporting Back to Donors
Nonprofits are learning that the best way to cultivate their donors is to let them know how the donations are being used. This also enables donors to rely on the organizations for this information and not turn to third party watchdog groups—which is great news! Charities are starting to do more of this type of “self-reporting,” but this is going to be a continuing need. Every nonprofit needs to develop clear methods of showing donors how their giving is making a difference in the world.
—Tiffany Neill, CFRE, partner; and Amy Sukol, CFRE, executive vice president, Lautman Maska Neill & Company
Online Is On-the-Rise
As I’m sure my fellow experts are also, I’m predicting that online giving is going to be on-the-rise in 2016. This may not be the most groundbreaking prediction, but it’s a pretty solid bet. The way the industry has been headed for the past three or four years, we’re looking at exponential online giving growth. #GivingTuesday 2015 marked the highest level of online donation and nonprofit engagement in recent memory. I predict 2016 will blow that number out of the water.
—Abby Jarvis, marketing and outreach, Qgiv
Impact Investing
In 2016, nonprofits will tell donors not just what their money was used for, but how it made a difference to others. Infographics are an easy way to quickly relay stats in an efficient manner, but donors also crave compelling stories with measurable results. It’s not just mid- and high-level donors that want more specifics on their contributions. Lower-level $25 donors care as well. In 2016, donors will value organizations that can demonstrate true social return and also steward their donations wisely. This will have little to do with overhead figures and more to do with the real difference the charity is making with people’s gifts.
—Angela Struebing, president, CDR Fundraising Group
Changes in Donor Giving Patterns
The ongoing changes in the distribution of wealth and demographic changes in society will continue to change patterns in giving. Large foundations and wealthy donors will continue to give much larger multi-million gifts, but to fewer organizations. The beneficiaries of these gifts will be larger institutions. The decline of the middle class will make it more challenging for nonprofits to receive gifts from this particular population. There will be fewer middle class people giving less money for charity
—Wayne Elsey, CEO, Elsey Enterprises
Election-Year Opportunities
The 2016 election received unprecedented press coverage in 2015, and that news cycle will only heat up going into the election year. Nonprofit organizations whose missions align with key election-year issues (immigration, economy, employment, etc.) have an opportunity to insert themselves into national conversations and gain positive attention by providing a voice of reason and perspective on key issues.
—Rich Dietz, director of fundraising strategy, Abila
More Focus on the Donor
Nonprofits are (direct) mailing less, and consumers are reading and responding less to direct mail. My recommendation is for nonprofits to focus in on the donor, leveraging new best practices such as persona development and donor journey mapping to craft the right marketing program providing the best donor experience that maximizes value to the organization across all channels—offline and online.
—Jeff Patrick, chief strategy officer and vice president, nonprofit, Merkle
Shifting Giving Models
Recent data show that the number of actual donors (as a percentage) giving to nonprofit organizations is on the decline, even with actual dollar amounts continuing to rise. Nonprofits will need to explore new giving models and look at ways to capitalize on opportunities to both engage donors and solicit funds. One example is to look more closely at foundations as a giving source. Per Giving USA’s most recent report, giving by foundations (as a percentage) is on the rise.
—Rich Dietz, director of fundraising strategy, Abila
The Donor Pyramid
Nonprofits will start to realize they can raise more money with fewer donors. There’s more and more focus at the top of the donor pyramid—where the biggest potential is for transformative giving. When nonprofit staffers focus on fewer donor prospects, they are able to spend more thoughtful time with each donor. Then they can take the time to be more careful, be more donor-centered, and listen closely to the donor’s dreams and vision. That’s how big gifts develop.
—Gail Perry, founder, Fired-Up Fundraising
Gamification of Philanthropy
Believe it or not, philanthropy can be fun. The Internet Age gives nonprofits the ability to connect with donors in unprecedented ways—including the opportunity to create interactive, engaging experiences that help build a community of passionate people. Integrating activities, rewards and (friendly) competitions into fundraising can help donors see the giving experience as an enjoyable, even everyday activity. Whether it’s creating teams or challenges—think the tip-jar “voting” effect—gamifying the donor experience will help build meaningful relationships and help campaigns rise above the noise.
—Dale Nirvani Pfeifer, founder and CEO, GoodWorld
Meaningful Engagement
Personalization is the new mantra for any organization looking to engage with consumers in meaningful ways—this is no different for nonprofits. With the likes of Amazon, Netflix and eBay providing a highly customized, segmented, personal experience that keeps individuals engaged and retained, nonprofits will need to explore a very similar strategy to secure the most fundraising dollars from individuals. A focus on tracking, conversation optimization and segmentation will be essential to fundraising success in 2016.
—Rich Dietz, director of fundraising strategy, Abila
