Lessons Learned From an Outrageous Year of Individual Giving
2017 may be remembered best as the year of “emotion”: from outrage (political, social and cultural—some of which birthed new and sustainable movements), to fear (homegrown terrorism and threats of nuclear war), to compassion (outpouring of generosity for victims of devastating hurricanes, wildfires and mudslides).
Fundraisers learned a long time ago that these episodic and cultural events are newsworthy and can be leveraged to provide “bursts” of short-term revenue, but rarely, if ever, do they provide residual benefit or influence donor attitudes and behaviors. But by most standards, 2017 wasn’t a typical year. It was a carryover of perhaps the most memorable and emotionally charged presidential election ever: 2017 wasn’t one isolated event, but rather 12 months of extreme and prolonged emotion; the kind of raw emotion that some believe could influence long-term individual behavior and priorities.
For some, it’s a way to explain lower-than-expected performance for traditional fundraising programs, such as direct mail, and for others, an explanation for the decline in key performance metrics, such as retention rates and gift frequency. It’s a reasonable and believable story, but it might be just that—a story. A story without hard facts to back it up, according to Merkle’s Response Management Group’s report, research based on direct mail contribution volume to 55 large scale, national organizations across many sectors of the industry.
Individual giving got off to a strong start in 2017, as total direct mail contribution volume increased 25 percent, compared with January 2016. Many in the industry are quick to credit the increase to an extended hangover from the emotion-fueled presidential campaign, which based on response data would indeed be a reason, as contributions were up 31 percent. Although it’s not the only reason, giving also increased across many other non-political sectors, including a 26 percent increase in national health organization gifts. Overall, only eight of the 55 organizations analyzed actually had less volume in January 2017 than the year before.
The surge in giving was short-lived, as contribution volume abruptly declined, including 38 percent less political-related contributions in February, year over year, and by the midpoint of 2017, overall direct mail contribution ended up at 3.5 percent, as compared with the first six months of 2016.
The second half of 2017 was marred by what may be the worst hurricane season on record. Monster storms Harvey, Irma and Maria wreaked havoc in Texas, Florida, Puerto Rico, and the Virgin Islands, among others. Hundreds of lives were lost here in the states and in U.S. territories and the damage is estimated to be north of $210 billion. Individual donors, foundations and U.S. corporations united in support of the victims of these horrific storms. Estimates vary in total support, but it’s likely to have been in excess of $500 million. For non-disaster relief charities that rely on the ongoing generosity of individual donors, there was great concern that donors would prioritize giving to hurricane victims—not to mention the disruption of mail service to vital markets in Texas and Florida.
Despite all this, individual giving to non-disaster fundraising campaigns during and following the hurricanes was consistent with the prior year; down only .5 percent in September and October. Contribution volume was down in November and December, resulting in an overall decline in individual gifts around 2.5 percent in Q3 and Q4.
In total, despite all the distractions and the roller coaster of individual emotions, individual 2017 direct mail contributions were very similar to 2016—up about .6 percent, thus giving back all the increased volume in January.
So, what’s the point of all this? Despite the extraordinary events in 2017, both natural and cultural, individual donors demonstrated once again that they can give generously to people in urgent need, while also continuing to support causes and organizations where they have the greatest affinity and/or loyalty. One thing we can count on as we move forward into 2018 is that there will be more events that will play on our emotions and compete for individual attention. Fundraisers must stop looking for ways to explain why people aren’t giving, but rather find more compelling reasons why individuals should continue supporting their organizations.
In my next blog, I’ll explore some of the more unique trends in individual giving and how the greatest threats to charitable revenue is not because of external distractions, but rather internal influences.
Greg Fox is vice president of nonprofit vertical strategy at Merkle. He joined the company in 2000 to establish a data-driven, strategic fundraising agency group. Fox is a 30-year veteran of direct response fundraising, with expertise in developing innovative fundraising marketing strategies and solutions. He has helped raise hundreds of millions of dollars for many of the largest and most respected fundraising brands in America, and while he has broad-based fundraising experience, he is highly regarded as a leader in the national health-charity sector. Prior to joining Merkle, Fox was a founding partner in TheraCom, a leading provider of full-service specialty pharmacy solutions and marketing strategies that served the healthcare and charitable industries. He also served as vice president of direct response fundraising at the National Cystic Fibrosis Foundation, where he started his career and created the organization’s first national direct response program. Fox is an industry thought-leader, frequent speaker at industry conferences and an active participant in the DMA nonprofit federation. He graduated from Virginia Commonwealth University in Richmond, Va.