Fundraising Trends

Good News/Bad News

The 2019 M+R Benchmark Report is out and, like most assessments of 2018, it offers a mixed perspective.

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“Another way of looking at 2018 online revenue: nonprofits were poised, with nearly perfect balance, between growth and decline.”

So, how you see the year may depend which side of that fence you were on!

Overall, online revenue was up by 1%, virtually flat, compared to last year’s 23% increase.

The report points out some bright spots.

  • Revenue from recurring monthly gifts grew 17% and now accounts for 16% of online revenue.

  • Social media has experienced growth, with Facebook Fundraisers providing a sizable boost for some organizations.

Both of these trends underscore the importance of engaged, committed donors.

It notes some areas for concern as well.

  • Email, while still the “workhorse” of online fundraising saw declines open and click-through rates and an 8% fall-off in revenue. Meanwhile, lists continue to grow (up 5%) as do the number of messages per subscriber (up 8%).

  • Retention is falling. Only 25% of donors who made a first time gift in 2017 gave again in 2018. For the smallest givers ($25 or less) that drops to 10%.

And there are some areas in which the jury is still out.

  • Digital ad budgets grew by 144%, with just over half (55%) committed to direct fundraising, and the balance to lead generation (23%) or awareness and education (21%). Return on that investment is difficult to measure; it’s often not immediate or directly attributable.

  • Mobile web traffic continues to grow, currently accounting for 48% of visitors compared to 44% for desktop users. However, desktop users account for 63% of gifts and 71% of revenue. Again there are a number of possible reasons, from demographic changes to privacy concerns.

So, what does it mean to you?

It likely depends. The report is based on multi-year data provided by 135 non-profit organizations. There’s a lot of good information to be distilled, including dramatic variance among some sectors. You may need to dig into the details to figure out what applies to you.

Assessing 2018 Fundraising Results

A recent headline – “Dec. 31, 2018: The Day Fundraising as We Know It... Died?” – reflected some of the conversations I’ve been having with clients and colleagues.

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How are your 2018 results looking? Preliminary reports seem to be mixed: some organizations are up slightly; some are down dramatically.

A number of broad market concerns are being cited.

The new tax law. From the outset, there have been fears that increasing the size of the standard deduction would cause a decrease in the number of people making charitable contributions. A number of studies appear to support this. For example, the Fundraising Effectiveness Project’s Quarterly Fundraising Report for Q3 2018 showed a 4.3% decline in the number of donors and a 2.6% drop in revenue (compared to 2017 results).

A volatile economy. From early November to Christmas, the Dow Jones Industrial Average shed nearly 17% of its overall value. What impact might that have had, especially among older donors nearing or already in retirement?

Contentious political environment. Nationally, the polarization leading up to the 2018 mid-term elections appears to have continued, culminating in a government shutdown just prior to Christmas. Internationally, pivotal trade partnerships and political alliances  appear to be precarious as well. Is this an additional concern? Even a distraction?

Donor fatigue. While giving was strong in 2017 – Giving USA reported a 5.2% increase in giving by individuals – some interpreted it as a short term reaction to the 2016 election results. In the months since, more organizations seem to be sending more appeals than ever before, hoping to maintain or even increase fundraising budgets.

So, what’s an individual development director to do?

While broad market forces may be beyond your control, the specific acquisition, retention and reactivation strategies you can implement are not. Some of the trends that appear to be working among our clients:

  • More targeted versioning, in both email and direct mail appeals

  • Acknowledgement of prior involvement and giving

  • Increased emphasis on monthly/sustainer programs

  • More careful monitoring and management of retention status

  • Increased use of social media as engagement tool

What’s working for you? Please chime in on Facebook and Twitter.

Checking the Pulse of our "Culture of Giving"

More people donate every year than vote for president.”

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That was just one of the pithy observations Patrick M. Rooney, Ph.D, offered to the roomful of nonprofit executives as Nonprofit Connect hosted its annual presentation of Giving USA: The Annual Report on Philanthropy. Published since 1956, this is the longest running annual report on U.S. charitable giving. 

But, is this comparison more a positive indicator of our philanthropic commitment or a negative reflection of our political connection?

Overall, the tone of the presentation was upbeat as Dr. Rooney reported that total giving increased 2.7% from 2015 to 2016. With this, the third consecutive year of growth, total giving has finally regained virtually all of the 15% drop experienced during the Great Recession of 2007-2009.

The increase was spread across giving from Individuals (72% of total), Foundations (15%) and Corporations (5%), while giving through Bequests (8% of total) experienced a decline of 9%.  Dr. Rooney was quick to point out that this category, often driven by one or two of the wealthiest estates, is typically more volatile than the other three.

All nine subsectors saw an increase in revenue. While Religion continues to be the largest of category, accounting for 32% of all giving, it saw the slowest rate of growth (3%). This trend is contributing to an overall decline in share of giving; the sector represented 33% of total revenue just 10 years ago and 58% in 1985. 

The three fastest growing subsectors are:
• Environment/Animals - up 7.2%
• Arts/Humanities - up 6.4%
• Health - up 5.7%

For the skeptics among us, there's ample room for concern about the overall health of our “culture of giving.”

  • While total giving is up slightly, it still remains at about 2.1% of Gross Domestic Product. This has ranged from 1.7% to 2.2% over the past 50 years, but has not been able to move beyond.
  • The total number of 501(c)3 organizations continues to grow and has also now reached pre-recession levels. 
  • Both the number of volunteers and volunteer hours are up, but not enough to have kept pace with overall population growth.
  • While overall corporate giving was up, much of the increase was from increased marketing spending (sponsorships, etc.) rather than “pure” philanthropy.

So, what can we do to keep our culture fit?

I think objective assessments like this are critically important and I applaud Nonprofit Connect for their ongoing commitment to providing such perspectives. I’m also grateful for Jeffry Byrne’s connection, which allows Kansas City to be one of the first markets in which the study is unveiled.   

But we obviously have to do more than simply watch the numbers. Engagement. Encouragement. Empowerment. What role do you play?