Is charitable giving up, down or sideways? Maybe we are.
Vice President of Research
March 18, 2019
Recent headlines report that giving grew sluggishly in 2018. AFP’s Fundraising Effectiveness Report says that growth was about 1.6 percent. Blackbaud estimated about 1.5 percent growth. That is potentially below inflation—depending on how you look at it, giving went down.
Well, actually, the charitable giving story is a bit more complicated than that:
- Higher education giving is up. We saw a substantial increase of over 7 percent in cash receipts at the end of fiscal year 2018 (usually July) per the VSE survey. Giving is also changing. A large part of that increase was in alternate giving vehicles like donor advised funds and individually-directed but “other organization” receipted funds like family foundations, etc.
- Campaigns continue to set records. One reason for this is something all the giving reports have pointed to, a massive growth in really big givers. Many charities are setting records for mega-donations at a time when their donor retention, overall participation, and total number of donors are declining. If your organization has the fundraising infrastructure and giving opportunities in place to court these big donors, you are going to see the impact of this historic wealth transfer.
- Broad giving statistics require context. Overall, giving is likely to be sluggish when considered in comparison to things like GDP and inflation in a slow growth economy. Income inequality is getting worse and the student loan debt crisis is an actual crisis that we know is impacting alumni willingness to give.
In fact, as a few of my favorite industry pundits have put it, most of the doom and gloom about fundraising results is overblown, tax policy didn’t really have that much impact and most of the problem is how we’re engaging donors.
- Younger donors are giving differently. Millennials make up a huge portion of our potential donor base. They are responding to different types of appeals, are more burdened by debt, and may be just as likely to give to a compelling GoFundMe campaign directly supporting a friend in need (or a compelling social media case). We ultimately will all start to behave like the young people. So, if you’re not adapting to these new, digital first and socially networked giving tactics, you are going to have trouble attracting and keeping all types of donors.
- Reports from fundraising CRMs and fundraiser surveys are only one part of the picture. If people are giving differently, donor advised funds, Facebook giving, and other methods are changing the game, our impressions and data are going to lag donor behavior. I would suggest that we can talk to the donors directly and ask them how they are giving and how they plan to give.
…if you’re not adapting to these new, digital first and socially networked giving tactics, you are going to have trouble attracting and keeping all types of donors.
In just a few months, we will have some more tools like the Non-Profit Research Collaborative winter survey and Giving USA to give us a bit more insight. I bet we are going to hear a similar story—that organizations report pretty mixed results. We will probably hear that once again, giving fell within 1.5-2 percent of GDP and disposable income. We will also hear once again that a larger share of that giving was accounted for by top-end donors.
So, what does this mean for fundraising strategy in 2019 and beyond?
- The first thing to do is make sure you have vehicles in place to attract, engage, and steward top-end donors and mega donors. That’s just smart.
- Second, really think about the way in which you are building a pipeline to get people to that greater investment. One suggestion: raise the bar on new donor retention and overall donor retention in general. I am embarrassed that most institutions have new donor retention below 30 percent. Why spend so much time convincing people to give for the first time when we can’t thank, cultivate, involve, and engage them to stay with us at least a 50 percent + rate? Stop accepting mediocrity from your stewardship.
- For example, where are you at on monthly giving? Recent benchmark reports tell us that monthly giving grew at almost 3x the rate of overall online giving. And programs with strong “sustainer” programs were the most likely to see overall growth. With 92 percent of Americans on some form of online subscription consumer service, if you’re not asking for monthly gifts, you’re missing out on a key economic and philanthropic trend. I bet in a few years we’ll be publishing reports about how many of these monthly givers became major and planned givers.
- Third, invest in listening to your donor base and adapt your marketing accordingly. We’ve found that when you go out and engage in actionable market research (essentially donor surveys that you can tie back to the data in your CRM), you can quickly find what donors really care about. Then, adapt your messages to match. For example, if you are hearing that many of your donors are attuned to social justice, take that group and make sure to highlight what students, faculty and the impact of philanthropy are doing to address change in the world. You will see higher response from that group.
We are not going to grow the number of passionate, engaged, and loyal givers if we continue to send dull messages that are the same old thing to everyone because we can’t take the time or find the systems to listen and personalize for donors. The same old tactics are likely to land you in that 1.5-1.6 percent growth range. The economic hurdles of mass donor acquisition are against us, so it’s time to counter with some exciting, data-driven individual donor engagement.
RNL offers an array of data-driven fundraising consulting solutions to help you take your donor engagement strategy to the next level. Each consulting engagement is tailored to your goals and institution–no cookie cutters allowed. Contact us to find out how a RNL consulting partnership can help amplify your fundraising results today.