Nonprofit Trends of 2019
As detailed in a recent Chronicle of Philanthropy article, gifts to the top 10 charitable organizations in the US are up more than 17%, however, overall contributions when adjusted for inflation are down 1.7% —just the 13th decline in overall giving in the past four decades. The report describes a widening gap in fundraising between the top charities and the remaining 1.5 million nonprofits. Top charities are raising historic amounts, and projections for this year show this trend will continue as nonprofits further expand by investing in innovative technology, forging new partnerships, and diversifying fundraising revenue streams. Having experienced these changes firsthand over the past year through our clients, we took what we learned and identified seven top trends among nonprofits throughout 2019 that improved their fundraising operations.
#1 Using Artificial Intelligence to Target Your Donor Base
From targeted advertising on social media to Google Home, Artificial Intelligence (AI) is everywhere in our modern world. Beyond its everyday capabilities, it can now also affect how you interact with your donor base. Every year, nonprofit organizations spend countless hours digging through annual campaign numbers to determine their most successful appeals and campaigns. But, with today’s AI platforms, it is now possible to pull this data (and more) with just a few clicks. Products like Salesforce Einstein and Gravyty use back-end algorithms to synthesize appeals and donor data to determine what is working and what should be adjusted moving forward. These platforms are also able to review donor segments and appeal language to help develop more relatable messaging that better aligns with your donors’ interests. In fact, marketing firms have been using this technology for years to help create their advertising campaigns. According to a 2018 study from Researchscape International, 74% of marketing professionals feel that this next level personalization has had a “strong” or “extreme” impact on advancing customer relationships. This technology will inevitably become a useful tool for fundraisers to personalize and craft compelling appeals for their audiences.
#2 Donor Advised Funds
Though Donor Advised Funds (DAFs) aren’t new to the nonprofit sector, their growth in popularity over recent years has dramatically changed the impact of this giving vehicle. Donors open a DAF by investing cash and other appreciated assets through a charitable sponsor, typically in a mutual fund, and then over time recommend grants to nonprofit organizations from the fund. In the 2019 Fidelity Charitable Giving Report, it was disclosed that, “Fidelity Charitable made nearly 1.3 million donor-recommended grants, totaling more than $5.2 billion” in 2018. This number is up $700 million from the previous year. Recent tax reform has also helped boost the prevalence of DAFs as it allows donors to strategically plan out their giving while receiving an immediate tax benefit. This striking growth opens a new realm of possibilities for grant seeking organizations.
Developing a strong relationship with DAFs can help secure annual major gifts for your organization for many years to come, but it is important to properly cultivate and steward these relationships. If your organization is looking to expand its pool of DAF Donors, first develop relationships with local community foundations like New York Community Trust and financial institutions like Fidelity Charitable. These organizations are the gatekeepers to DAFs and have preexisting relationships and trust of the high-net-worth donors. To preserve relationships with your existing DAF donors, be sure to soft credit gifts to the individuals funding the DAF, not just the organization that the check comes from. Following that gift, steward those individuals, similar to someone that made a typical major gift. This will help ensure that these individuals continue to give to your organization year-over-year.
#3 Donor-Friendly Digital Wallets
By 2022, it is estimated that 1.2 billion users worldwide will utilize digital wallets. As more people use digital wallets (or payment methods stored on one’s phone, such as ApplePay and SamsungPay), it’s crucial that online donation platforms accommodate these payment methods. A similar study by finder.com found that 1 in 4 Americans say they’re willing to spend more money when using a digital wallet. In the fundraising world, that statistic should be the equivalent to hearing a slot machine hit the jackpot.
Despite this overwhelming evidence, only 6% of nonprofits utilize digital wallets. As the trend of online donations continues to grow, and the technology to do so also evolves, nonprofits must keep up with this changing landscape and adapt to make online donations as seamless as possible for donors. Platforms such as GiveLively and Funraise have seamless integration to utilize digital wallets on your donation pages. Not only do these two platforms offer innovative payment methods, along with cleaner and visually appealing pages, they’re cost effective as well! GiveLively is a free platform with a 2.9% fee imposed by their payment processor, and Funraise has a low monthly fee with pricing to fit the size of your nonprofit.
#4 Strategic Corporate Partnerships
Investing in a Corporate Social Responsibility (CSR) initiative was once only recommended for good business practice, but now it is expected. In addition, companies are shifting their corporate giving guidelines to be more deliberate by focusing on thoughtful, symbiotic relationships and partnerships with organizations that align with their company values. They are investing in these long-term partnerships to boost employee retention, improve public image, increase media coverage and attract investors.
While nonprofit organizations can benefit from corporate partnerships through increased and sustainable funding, enhanced numbers of volunteer and donor prospects, and increased awareness of their mission, members of the Forbes Nonprofit Council highlight clear red flags to watch for in a potential corporate partner. Despite the positive opportunities that exist, it is important not to jump into any partnership before carefully conducting research to ensure their values and goals align with yours. Once you have determined your top corporate partner prospects, investing time in the pitch is important. Since you have likely already confirmed via the company or foundation website that their giving priorities align, sitting down with their Corporate Social Responsibility representative is the best way to uncover the organization’s internal goals to cater a proposal that will meet their needs. Once secured, investing time into stewarding these partners is essential for maintaining them long-term. Communicate the impact their company is having on your organization and constituents, write thoughtful and personalized thank you notes, and invite them to special events or mission moments. These are just a few ways to ensure they see the value of the partnership – with the ultimate goal of keeping them on board for years to come.
#5 Fundraising Through E-Sports
Forget charity runs, pancake dinners and silent auctions—livestream gaming is starting to become one of the most lucrative fundraising opportunities you can find. A recent article published in Candid and authored by Orr Group staff members, CJ Orr and Jack Little, reported that “over $22 million was raised in 2018 by gamers, live streamers, and enthusiasts alike.”
Skeptical about online fundraising? The annual TwitchCon (a livestream gaming conference held in San Diego) held a Charity Decathlon raising over $200,000 for ten charities in a few hours. In addition, in December 2018, one online gaming team raised over $500,000 to benefit St. Jude Children’s Research Hospital. As we look ahead, it’s clear this area of fundraising is likely to expand and become an additional tool in the event fundraiser’s kit. This year, be sure to pay attention to how this fundraising evolves and look for partnership opportunities with gamers!
One additional benefit is increased exposure of your nonprofit among Millennial and Gen Zers, a demographic that is traditionally difficult for nonprofit employees to reach. This fundraising strategy requires minimal work but has a high return in support and visibility among a growing group of donors.
#6 Cause-Related Marketing and Social Issue Involvement
A few years ago, REI and North Face pioneered how to take a stand on social issues via cause marketing. Despite numerous risks, the benefits have proven to be worth it. The Brands Taking Stands 2019 survey reported that 66% of young consumers say a brand’s association with a social cause or platform positively impacts their overall impression of a brand; and 58% say this association is also a positive driver of their likelihood to purchase from that brand.
One great example of this partnership is the “Shred Hate” campaign launched by ESPN and MLB in partnership with the nonprofit, No Bully. Major corporations are taking stances on social issues that may be contrary to perceptions of their brand (such as bullying and sports), and the commitment to overcoming these issues sends a strong message to consumers. As more companies are interested in increasing their visibility to drive business and enhance their image, they are being thoughtful and selective in order to find the right nonprofit partner to help them exceed their goals. When thinking about how to demonstrate your nonprofit’s appeal to a potential partner, think about how your mission may align with their consumers, if you have any highly visible events they could attend, how they may get in front of your audience, or even special relationships with celebrities or athletes they can connect with. When submitting a proposal, you will want to ensure your team is prepared to execute. Cause related marketing opportunities will be most successful through cross-department collaboration between marketing, development and a dedicated leadership team.
#7 Meeting Campaign Goals with Planned Gifts
In 2019, the idea of using planned giving as a vehicle for fundraising became more prevalent. In Orr Group’s article by John-Anthony Bruno and Angela Mestre, A Beginner’s Guide to Planned Giving, we explore why nonprofits are moving towards a proactive giving model as we approach the greatest wealth transfer in U.S. history. With $68 trillion expected to be transferred to Generation X and the Millennial generations over the next few decades, fundraisers have a unique opportunity to maximize dollars raised through charitable bequests. Organizations like Niagara University have utilized a proactive planned giving model to complement their campaign and strengthen and systematize their planned giving program. By implementing the central tenets of planned giving, developing personalized blended gifts (donations made in cash combined with other assets such as gift annuities, retirement funds, bequests, etc.), plus implementing new methods like premium financed life insurance policies, Niagara is now on the path to closing more significant lead gifts for their campaign than initially thought possible.
Planned giving can provide significant revenue for your organization, as well as build loyalty among your most passionate supporters. As we make our way towards such a monumental wealth transfer, we recommend that nonprofits set themselves up for success by implementing a planned giving program. Regardless of where your organization falls in its planned giving journey, know that it is not too late to become more organized and targeted with these efforts.
One of the common themes amongst these top trends is collaboration. Now is the time to reinvent how we collaborate with our donors and corporate partners by effectively leveraging new technologies, exploring new giving vehicles, and taking time to develop deeper relationships.
As you begin to execute your fundraising strategy this year, we hope these takeaways help inform your decisions. The 11% jump seen in fundraising among top nonprofits is a result of organizations focusing on investing in their fundraising operations and developing creative strategies to expand their fundraising revenue.
Interested in learning how Orr Group can help your organization this year? Contact us today!