Donor Giving Behaviors are Re-Aligning to Pre-Pandemic Preferences.
What It Means for You: Be Proactive as New Doors May Be Opening – and Transition Communications to Focus on the Long-Term, Not Just Emergency Response.
Key sub-sectors, most notably Arts, Culture, & Humanities and also Environment/Animals, saw a resurgence in giving as opportunities for in-person activities resumed and donor audiences were not occupied with urgent health and community interventions. This means that many organizations that felt a significant hit in revenues as donors prioritized Covid relief are experiencing a welcome relief.
We encouraged all our nonprofit partners to continue fundraising through the pandemic, regardless of their mission. But we also know from those conversations that many individuals were hesitant to ask – because they thought it was insensitive, may reach people at the wrong moment, or wasn’t appropriate because their mission was unrelated to pandemic response. If your team held back before, the renewed behaviors of donors to support a broad swathe of missions should certainly assuage previous concerns you may have felt.
What this also shows us is that even though the global community has not fully put Covid in the rearview mirror, the public is largely eager to reorient their focus to diverse areas of interest and concern. Your communications across donor and non-donor audiences should reflect this change so that these important constituencies can understand the broader impact you have on society, program participants, and more.
Individuals Still Rule the Day in Giving, But Household Participation Continues to Stagnate.
What It Means for You: Place a Renewed Stress on Stewardship to Build Retention!
Lagging retention has been a scourge of the nonprofit sector for years, and since the Great Recession in 2008, it has been coupled with low levels of household participation in giving. Prior to that time, approximately two-thirds of all American households participated in charitable giving – while we are now sitting at only about half of all households. (Average giving totaled $2,581.)
Organizations certainly can and need to do more to re-engage audiences that have fallen out of the habit of giving. But this can be a long road, and the first priority organizations should stress is keeping the audience they have now engaged. That means investing in stewardship efforts that inform donors about the good they are doing by partnering with your organization, as well as deepening links with them to create greater two-way exchange and meaning in those relationships.
Tried-and-true methods like thank you calls, personal notes, and in-person tours, events, and visits will always be valuable as part of your stewardship toolkit. But organizations should also look to the new ways that technology was used to maintain connections with donors through lockdowns to create other avenues and opportunities. Creating a diverse stewardship menu will allow you to reach more donors with their preferred channel or method of engagement, building greater loyalty and longevity.
Growth in Individual Giving Driven by Major Donors.
What It Means for You: Create Pipelines to Higher-Dollar Support and Publicize Alternative Giving Vehicles Leveraging Wealth.
Said another way, declining household (and therefore individual) participation in giving means that giving is increasingly concentrated into the hands of fewer and fewer people. Importantly, this smaller group continues to drive individual giving revenue totals up over time – underscoring the continued relevance of major giving for nonprofits. In fact, in the most recent year, mega-giving totaled $15 billion or 5 percent of total individual giving – illustrating just how significant the gifts of a very few individuals can be.
This means it is more important now than ever to invest in opportunities to develop higher-dollar giving. Many donors, even those of great wealth, may enter your pool of supporters with a more modest contribution. It then falls to you to honor that support and steward those connections as part of an overall process of making the case that they should invest even more with you. Creating structured mid-level giving programs can provide the framework for that stewardship while also helping you define a case for upgrade and calendar of making approaches for renewed, larger gifts.
Your organization can also encourage larger gifts by publicizing key giving vehicles preferred by wealthy donors – educating donors on these opportunities as well as highlighting that you can accept such gifts. These vehicles include increasingly popular donor-advised funds, gifts of stock, gifts of cryptocurrency, and other forms of planned gifts, like charitable gift annuities. (Prior to highlighting all of these areas of giving, it is important to define your own gift acceptance policies as well – noting that some of these contributions are more complicated to manage than others.)
Online Giving Growth to More than 10 Percent of Total.
What It Means for You: Ensure Consistent, Seamless, and Engaging Multi-Channel Experiences for Donors.
For the first time, online giving as a percentage of total giving reached 12 percent, showcasing the degree to which donors of all stripes are comfortable with and in many cases prefer to give online. This is not surprising, given that online activities have saturated our lives, including purchasing behaviors that are now more normalized and secure.
Importantly, the mix of fundraising methods used to approach donors may still be incredibly diverse, crossing mail, email, online and offline marketing, television and telemarketing, and a host of in-person approaches incorporating personal relationship management. Yet across this mix, many donors are now preferring the convenience of giving online.
This means that organizations must up their digital game to ensure consistency of communications across all channels and create a smooth donor experience, no matter how they are coming to you. Your nonprofit presence absolutely must be mobile friendly, and if donors are opting to give to you through online channels – your donation page must be optimized for the prime user experience. These efforts should likewise be paired with integrations of newer digital tools to donor relationship building that allow for greater personalization of the online experience to enhance some of the earlier priorities highlighted, like stewardship and retention – including opportunities like personalized video and text messaging.
Economic Volatility Spurred Resurgence of Corporate Giving in 2021, but Inflationary Impacts Signal Possible Trouble to Come.
What It Means for You: Diversify Your Revenue Streams and Strengthen Lines of Communication to be Responsive to Changes on the Horizon.
A final headline coming out of the Giving USA report was the resurgence of corporate giving after a poor performance early in the pandemic. As the stock market yielded strong corporate profits – noting that GDP grew over 10 percent and corporate pre-tax profits grew over 37 percent – giving by these philanthropic players even when adjusted for inflation grew by almost 20 percent.
This is definitely fantastic news – but we would temper the celebration by noting that corporate giving still is a small percentage of total giving at roughly 4 percent, and the first half of 2022 has revealed persistent economic challenges that may put a stranglehold on continued major growth in corporate giving. Instead, what we take away from this headline is the importance of cultivating a diverse base of supporters that will allow for greater consistency in revenues over time. After all, economic indicators – whether good or bad – hit populations and sectors differently, so the smartest long-term strategy is to reach as broad a base of supporters as possible to minimize the risks of lagging economic performance or security for any one group.
As we continue to operate in an uncertain landscape and plan for potential economic shocks ahead, we encourage you to be open and available to your varied donor constituencies so you can be understanding towards them in the event of negative impacts, as well as leave the door open for continued support from those who are weathering any storms in greater security.
These are just a few of our initial considerations as we weigh Giving USA findings in our future strategy development, but we would love to talk with you more about your thoughts, concerns, and plans for the future as well! Please feel free to reach out to our team to schedule a time to speak about how you can set up a strong roadmap for fundraising through 2022 and beyond. We look forward to connecting with you!