Electrifying Results: Fundraising Insights to Move the Needle for Your Nonprofit

New Year, New Decade – Fundraising Trends in 2020

2020 Piggy BankCharitable giving increased by over $147 billion from 2009–2019 (Lilly Family School of Philanthropy at Indiana University). As we begin a new year and decade, nonprofits will need to adapt to the changes in how and why donors contribute to charity.

Virtual fundraising has been on the rise for years. The ease to interact, participate and fundraise on one’s own time make virtual fundraising an attractive option to support charities. Online fundraising platforms such as crowd-funding and virtual events are relatively low-cost and low-maintenance for nonprofits to implement compared to traditional fundraising methods and have the potential to engage a larger audience.

The digital age has also allowed donors the ease and ability to research organizations before making a gift. (All the more reason to make sure your 990s and other organizational information are current on Becoming transparent about use of funds and making asks for tangible items such as a project or program will appeal more to donors. To ensure future engagement with your organization, report on the donor’s impact of their gift.

A new decade also means a new generation of donors. Focus will shift to attracting Generation Z (individuals born between 1995–2015) into philanthropic giving. This generation is just entering into the workforce, but their heightened social awareness and desire to make positive change is an opportunity to engage this audience in philanthropy early in their adulthood.

To appeal to the new workforce, corporations will become more focused and strategic about their philanthropic giving in the community. This opens the door for nonprofits to enhance their corporate engagement initiatives with event sponsorships and volunteer activities for corporate employees.

Year-End Giving

The last quarter of the calendar year generates the most revenue for nonprofits. In fact, according to CauseVox, nonprofits receive 50% of their donations between October and December. Nonprofit Tech for Good reports 12% of annual giving occurs the last three days of the year. Whatever a donor’s motivation may be — the spirit of the holidays or a last chance for a tax deduction — a year-end giving campaign is vital for a nonprofit organization.

Here are some strategies to guide the success of a year-end campaign:

  1. Develop a Plan
    Developing a plan takes time. Many organizations may begin planning as early as August for their year-end appeal. Carefully decide your approach, set a goal, create a timeline, determine how to segment your donor list and select which compelling stories will be featured to articulate need for support.
  2. Use a Multichannel Approach
    Generations of donors respond to different mediums to donate. For example, older generations prefer to make annual contributions through direct mail while millennials are attracted to the ease of donating via social media using their mobile device. Others may need to see a message more than once before they make a gift. Consider a multichannel approach integrating direct mail, email appeals, social media and website for your year-end giving campaign.
  3. Personalize the Appeal
    Donors receive many requests at this time of year from worthwhile organizations. Help your appeal stand out by personalizing the ask. Include the donor’s name in the salutation and ask for a specific gift amount according to the donor’s previous giving history. A handwritten signature with a personal note from the organization’s executive director, board member or volunteer also can personalize the gift ask.
  4. Follow Up
    Provide prompt confirmation and receipt for gifts received. Again, adding a personal thank-you note to the donor can add a special touch. For donors who do not respond, develop a follow-up plan for contact, particularly with those who have supported your organization annually. Finally, donors want to know how their gift has made an impact. Provide regular communication about how the gift has influenced your work throughout the year. Therefore, when next year end rolls around, they will feel satisfied to continue supporting your organization.

Creating an Engaging Volunteer Experience

Excited VolunteersVolunteers are the lifeblood of an organization. They are advocates for a cause, ambassadors to create awareness and champions for services. It only makes sense that we focus on retaining our volunteers as we do with our donors.

Onboarding a new volunteer should be much the same as a new employee to your organization. Although a volunteer may be interested in helping your organization, they may not know all about your mission and services. Provide an orientation to equip volunteers with education and materials. It is also a good idea to repeat the orientation annually with volunteers that have been engaged with your organization so that they are up-to-date and prepared to share the same messages as staff and new volunteers.

Additionally, ensure volunteers are equipped with resources to do their volunteer duties. For example, if they are serving as a spokesperson on behalf of your organization, do they have brochures and referral sheets about your services? Do they have talking points if approached by the media? Branded apparel for a presentation such as tablecloths and displays for informational booths? Volunteer t-shirt or nametag to identify as a credible representative of your organization? Volunteers are an extension of your organization’s services and they should be primed with the knowledge and resources to be an ambassador to your organization.

Check-in regularly with volunteers. A Fidelity Charitable Gift Fund survey found 44 percent of respondents would rather volunteer somewhere else than stay with an organization that does not utilize their skills. In other words, get to know your volunteers and leverage their skills and strengths.

Individuals choose to volunteer because they want to make a difference. Share with volunteers the impact they are making to your organization. Are you able to increase the number of those served with your programs because of their help? Did event participation increase due to their work on a committee or awareness activity? Providing tangible, positive outcomes for their work, continues to keep volunteers interested and engaged in your organization. In addition, soliciting volunteers’ input about a project or process makes them feel that you value their feedback and they become more vested in your organization.

Finally, thank volunteers timely and often. A simple handwritten note, recognition in front of their peers, or simple treat of gratitude go a long way in keeping volunteers excited about serving your organization.

Bunching/Bundling on the Rise

Jar full of changeWhen the Tax Cuts and Jobs Act of 2017 was put into place, the standard deduction increased to about $12,000 for an individual and about $24,000 for a married couple. In a 2018 article, the Tax Policy Center estimated that the number of taxpayers that itemize their deductions would fall from 46.5 million into 2017 to 19.3 million in 2018. The Joint Committee on Taxation estimated that individuals would reduce charitable giving by $13 billion annually because their donations would no longer be tax deductible.

Since this time, “bunching” or “bundling” gifts for charitable giving has become an increasingly popular trend. Though not a new concept, this allows for people to still donate to their favorite charities while reaping tax incentives.

Instead of making yearly gifts in the same amount, people may bunch together their gifts and make a major gift every two to three years. The major gift would be itemized for that year, and the standard tax deductions would be taken for the other years until a donor decides to make another major gift.

Donors could either give that major gift to the charity directly, or they could create a donor advised fund (DAF), an alternative that is becoming increasingly popular because of its flexibility and immediate tax incentives. By setting up a DAF, the recipient organization holding it would be in control over that fund; however, the donor would have a say on how and when they would like to spread their gift.

The National Philanthropic Trust reports that the number of DAF accounts has increased by more than 100% the past five years and “outnumber private foundations by more than 5:1” – making it the “fastest-growing charitable giving vehicle.” The Trust also notes that in 2017, contributions to the 463,622 funds totaled more than $29 billion, and now estimates that DAFs hold about $110 billion in assets.

To illustrate how the concept of bunching gifts and how a DAF works, the American Endowment Foundation gives this example:

Before the change in standard deduction, a married couple used to donate $14,000 in each year. With the tax change, in order to still donate that amount and receive tax benefits, they created a DAF, contributing two years’ worth of donations at one time. The $28,000 in donations along with state and local taxes and mortgage interest at an estimated $10,000 would bring them to $38,000. They’d surpass the $24,000 standard deduction by $14,000, which would be an additional deduction. From their DAF, they would donate to their favorite charities.

The next year, they would not make any direct donations and would take the standard deduction. However, they would distribute funds from their DAF so that charities would benefit from their philanthropy. The next year, they may decide to make another “bundled” gift to the DAF as they did in the first year.

DAFs have their set of challenges and there are various thoughts on the distribution requirements. The trends show that donors continue to open them and see them as a benefit for themselves and charities, so continuing the conversation on them will be important.

Make It Transparent

Transparency is important among donors. And more than other generations, Generation X and Millennials like to see proof of their donations being put to good use and the impact they are making toward the organization.

Using social media is a great way to demonstrate transparency. Here are a few ways in which you can do so:

    • Livestreaming and short videos
      Authentic videos or your work in action allow donors and potential donors to get a behind-the-scenes look into your organization. This makes them feel included, and the content can also create empathy.
    • Dollars raised into tangible amounts
      Instead of just stating the dollar amount that was raised, turn it into something tangible that people will understand. For example, donors like to read about how their contributions to the overall goal helped to “give meals to 2,000 people” or the “46 gifts of $100 each provided bedding and hygiene supplies for one month to 46 people.”
    • Visuals
      Everyone likes to look at a great photo. Writing a post may demonstrate transparency and validity, but like the saying goes, “a picture is worth 1,000 words.” Show photos of those you serve as well.

We see many organizations utilizing social media to show transparency and promote their organization, but their posts lack variety. Don’t post the same topics over and over again. For example, if you only post pictures of volunteers packing meals for the homeless or of fundraising events, your audience is going to think that is all your organization does. When you start to post a variety of content throughout a page, you are showing your audience impact and that the organization is making a difference in more ways than just one. It offers more insight into your mission, vision and values.

If there is no variety, you will lose followers, traffic and possibly people being involved with your organization overall. When you post, keep variety in mind. Instead of a volunteer in an assembly line packing meals for the homeless again, post a picture of a family that received one of those meals. Next time, maybe you show a truck full of boxed meals, explaining your distribution. After that, maybe it’s the driver of the truck who is proud to be part of your organization. All of these better tell your story of true impact.

Keeping Donors Loyal

Cost Per Dollar RaisedIn fundraising, it is important to attract new and big donors, and it’s exciting when we do! However, relying solely on a small pool of new and big donors is unsustainable — it costs time, money and other resources. We need to remember the importance of donor loyalty, regardless of the donation size.

A January 2019 article from CallHub said, “According to the Fundraising Effectiveness Project report, only 45.5% of donors make a gift the year after an initial donation. That means nonprofits lose more than half their donors right after their first contribution.” This statistic is an example of the importance of building donor loyalty.

Loyal donors are the people who are going to raise awareness of the organization, spread its message and mission and be advocates for the organization. Put a stewardship plan in place for your donors. This could include many types of “touches.” For example, some donors will have specialized plans while others will be grouped into a plan that you use for other donors. The key is to have a plan, implement it and be sure your donors are at the heart of it.

Invite them to an event, to volunteer or to an opportunity to get “hands-on” with the organization and see their donations in action, allowing them to further their personal connection. The organization needs to make those kinds of friends a priority.

Send them a handwritten note or an email or give them a buzz on the phone. Consider sending them a newsletter, picture from a recent event or some kind of update to keep the donor in the loop and make them feel connected.

Whether it’s a donor who gave yesterday, last month or last year, or a donor who hasn’t given in a couple years, their ongoing support is invaluable. Many donors will give again if they are familiar with or have a connection to the organization. And long-term donors are your best source of planned gifts — usually the largest gifts anyone will ever make. Trust, loyalty and respect can go a long way. Keep the donor relationship active!

Video Continues Trending in 2019

Video ScreenshotIt’s no secret that “going digital” continues to rise and won’t be going away anytime soon, especially in 2019. Though traditional forms of fundraising are far from dead, digital forms of fundraising benefit organizations in more ways than one. These include:

  • Cost less in general
  • Help establish and cultivate relationships
  • Allow the use of videos, which leverages the cause
  • Offer more simplicity overall

One of the biggest patterns already seen in 2019 is the use of digital video over social media platforms for fundraising.

The Chronicle of Philanthropy says livestreaming is the new telethon: People retain 95% of a message when they watch it in video compared to the 10% who read it in text format. DonorBox says, “Video, Video, Video,” is going to be one of the biggest trends in 2019. In addition, DonorBox statistics show marketers who use videos grow their revenue 49% faster than non-video users, and social video generates 1200% more shares than text and images combined.

Donors want to see firsthand where their money is going and how their donation is going to impact an organization. These days, many people don’t want to be handed a pamphlet with very few images and overkill of text that is going to take time to read. People want additional tools and resources to learn the impact they could possibly make. They want personalization, simplicity and to be talked with, not at.

The ultimate goal? Turn that video viewer into a donor.

Charitable IRA Rollover Presents Opportunity in New Tax Legislation

Charitable IRA RolloverHere we are already, the end of the year push. It seems like just yesterday the new tax legislation was passed and hardly a day went by without some prediction of the impact on the nonprofit sector (including us).

Once we move into 2019 and are able to look back and start dissecting giving data from 2018, we should gain a clearer picture of how donors are reacting to the tax changes. Are taxes really a motivator for giving, and if so, for which groups? Will certain sectors be more affected than others? Will philanthropic giving track with the growth of the economy?

Unfortunately, we won’t have those answers until we can look at the whole of giving in 2018, including the final months, when most donors typically make their gifts. So what can you do to encourage giving by donors who have the potential to make major gifts but are unsure how it will affect their tax situation?

One relatively simple idea, for donors over 70 ½, is the charitable IRA rollover, in which donors can direct all or part of their required IRA distribution directly to a charity. One of the main benefits of this type of gift is that donors don’t even have to worry if they will itemize or not. They simply don’t pay the tax they normally would on the distribution.

Start by segmenting out all your donors over 70 1/2, and see if there are some loyal donors who may be good candidates for this type of gift. With a small enough number of prospects, a simple phone call or visit might suffice. If you have a large number of prospects in this age range, you may even consider planning a targeted direct-mail piece as part of your annual fundraising plan.

Shocking Statistic: According to a Charity Navigator survey, nonprofits receive, on average, 41 percent of their contributions from Thanksgiving to New Year’s.

JJ Watt Provides Another Fundraising Lesson

If JJ Watt is looking for a career once he retires from the NFL, he may want to consider fundraising. About a year ago he raised just over $40 million (with an original goal of $200,000) for Hurricane Harvey relief. And even if the cynic in you discounts that figure as being a wealthy and influential individual with a lot of wealthy friends that your organization could never duplicate, JJ’s efforts provide another lesson, this time in the area of stewardship.

At the end of August, the JJ Watt Foundation released this report detailing the work they have done with the funds they raised. Short and simple, the report does an outstanding job of giving specifics into the impact of the foundation’s work. Also notable is the recognition of other nonprofit partners who received the majority of the funds. Here, JJ is showing how efficiently the funds were used—not to start completely new programs (that may be duplicative), but to utilize the programmatic expertise of other organizations in the area.

Overall, this report demonstrates elements of a great stewardship piece: 1) A thank you; 2) Examples of the impact donated funds have had, providing as much specificity as possible; and 3) Another thank you. JJ and his team earn bonus for alluding to future plans, which says we’re thinking strategically and are still a smart place for you to invest (without a direct ask). Other nice features include a number of pictures of beneficiaries of the Watt Foundation work, a timeline and a well-written, personal note from JJ. If your donor retention rate isn’t where you want it to be, review your stewardship materials to see where you could bolster your thank you, impact reporting and future funding needs.

Shocking Statistic: The work of the JJ Watt Foundation facilitated distribution of 26 million meals to those affected by Hurricane Harvey.

Ten Reasons to Conduct a Feasibility Study

Feasibility Study

A feasibility study provides invaluable feedback for launching a fundraising campaign, yet many organizations still hesitate to invest in this key early step. So if you happen to be wondering whether your organization should just jump into a campaign without a feasibility study, consider the benefits a study can provide.

  1. Flags areas of concern for key donors or influencers. This allows you to address these concerns prior to the campaign and strengthens support from key individuals or groups. Are there pieces of the campaign that key stakeholders view as nonessential to your mission?
  2. Measure board support. While every board has different financial capacities, it’s important that everyone is supportive of the project and campaign. A study allows board members to share concerns they might not otherwise share in a group setting.
  3. Identify leadership gift prospects. Leadership donors can make or break your campaign. A study should verify whether or not those you suspect of being lead donors are supportive, and allow you to adjust your plans accordingly.
  4. Identify leaders and volunteers. You will need volunteers for a variety of roles during a campaign. Do you have people willing to fill those positions? Who do your stakeholders view as influential leaders?
  5. Check for competing campaigns. Even if it’s not public, perhaps another organization is preparing a campaign of its own. Depending on how much your constituencies overlap, this may affect how much can be raised.
  6. Collect organizational feedback. Is your organization well-known in the community? Do people know what the mission is? Is the leadership known and trusted?
  7. Show you have done your homework. Some donors, especially foundations and businesses, might ask if you have conducted a feasibility study before awarding a grant. They want to know a project they are supporting has a high likelihood of success.
  8. Cultivate potential donors. Potential donors will appreciate that they were engaged and asked for their feedback early in the process, increasing your chances of a gift when the time comes to ask for one.
  9. Gauge internal readiness. Do you have the staff and operational resources necessary to undertake a campaign?
  10. Find out how much can actually be raised. You want a campaign goal that is challenging and bold, but also realistic. A sound feasibility study will take all the above factors into account and give you an honest assessment of how much can ultimately be raised.

Shocking Statistic: Charitable giving has historically risen at about one-third the rate of the stock market (The Foundation Center).