Why Acquisition Should Be a Top Priority

We spoke at a meeting of Susan G. Komen’s peer-to-peer fundraisers from all over the country this week in Dallas. Dallas in July is a good location to focus a group’s thoughts. It was 103 degrees outside. There was little motivation to venture beyond the air-conditioned rooms at the conference hotel. As at most of our client meetings, acquisition was a major topic. The data tells us that is exactly what we should be talking about. There is a troubling trend in American charitable giving that should be sobering to every nonprofit that depends on individual giving.

First, the good news: According to the “2018 Giving USA report,” in 2017, Americans donated a record of $410 billion to nonprofits (the chart below reflects inflation-adjusted dollars). This represents around 2.1 percent of the U.S. gross domestic product, a share that has remained pretty much constant since 1980.

Credit: University of Michigan/IUPUI Lilly School of Philanthropy Panel Study

More reason to celebrate is that the average annual amount donated increased from around $2,000 per household in 2002 to more than $2,500 in 2014 (adjusted for current dollars). People who support nonprofit missions are doing more.

Credit: University of Michigan/IUPUI Lilly School of Philanthropy Panel Study

Now the bad news: The percentage of Americans donating to nonprofits fell from more than 68 percent in 2002 to around 55 percent in 2014, the most recent year for which this data is available.

Credit: University of Michigan/IUPUI Lilly School of Philanthropy Panel Study

This is scary. Although the economy has strengthened steadily since the recession of 2008, the number of individuals making charitable contributions has continued to slide.

This year, the new tax laws are expected to reduce the number of families making contributions further, by shrinking the number of people who are able to deduct charitable contributions on their taxes. Research by the Lilly School of Philanthropy suggests that we can expect this to result in a drop of more than $13 billion in contributions.

If these trends are present in a good economy, with a booming stock market and low unemployment, what will happen when the next recession hits?

All this means that the smart strategy is to grow your base of supporters now. It is your best hedge against an uncertain economic future.

Katrina VanHuss and Otis Fulton have written a new book, Dollar Dash, on the psychology of peer-to-peer fundraising. Click here to download the first chapter, courtesy of NonProfit PRO!