The Nonprofit Landscape Has Changed. Here are the Latest Trends.
Until recently, giving to charity was marketed as an ethical way to get a tax break—and doing so was a strategy that spoke to many. Tech and shifting public perceptions about giving, spurred by the rise of Gen Z and millennials in the philanthropy sector, have permanently altered core axioms of nonprofit giving. Younger generations overwhelmingly consider the moral implications of how they spend, and the shift in public perception has been comprehensive. Nonprofits must respond accordingly.
While it remains true that giving to a 501(c)(3) organization allows you to claim a tax deduction, that’s no longer the driving motivator behind donation for most everyday donors. People can easily find resources that show what charities use their donations most effectively. And to this new generation of givers, how you give has become almost as important as how much you give.
There are several key takeaways we can deduce from the trends.
Digital reigns supreme
Sure, you can pay people to stand outside Whole Foods or email slickly designed pleas for donation, but nothing is as effective as a user-friendly website or landing page. This is probably not surprising; however, many nonprofits still have yet to shift their strategy.
Websites outperformed all other revenue streams last year, holding a whopping 40 percent slice of the total revenue pie. Email and social ad campaigns still do well, but nothing brings in donations like a great web campaign, especially one that features engaging content and compelling storytelling.
Targeting mid-level donors works
Lower dollar amount donations are on the rise thanks in part to younger folks’ propensity to prefer recurring donations, and in part because of the normalization of fundraising through crowdfunding sites.
If the rise of GoFundMe has taught us anything, it’s that small amount donations add up. Through social giving sites, we have been conditioned to see giving regular small amounts as normal. When creating donation drive campaigns, remember: A good story targeting many minnows can be just as effective as netting a big fish.
Competition matters, but not the way you expect it to
Many nonprofits sit out major giving holidays in fear of facing too much competition. The numbers suggest this is a mistake. For example, despite heavy competition, Giving Tuesday is consistently one of the most important days of the year for online fundraising. An estimated 35 million U.S. adults participated in Giving Tuesday in 2021, a six percent increase over the previous year. If you are a nonprofit, you need to be participating in events like Giving Tuesday.
Instead, the competition you should be mindful of is generated by sites like GiveWell that assess a nonprofit’s effectiveness. You don’t want other nonprofits that target similar donor pools to have higher scores.
Year-end giving is still king
This one is clear. Nearly one-third of annual giving occurs in the month of December. Despite the rise in recurring donations, the end of the year is still the time when most giving occurs. Ideally, a good campaign should be ready and already engaging with potential givers throughout the autumn months before gearing up for an end of the year push.
The landscape of giving has changed, with shifting incentives for both donors and nonprofits. However, this is all good news. Donations of all amounts are up across the board, with 58 percent of charitable organizations seeing growth in their overall donor numbers, which has translated into a 5.1 percent rise in giving and a total amount given of $471.44 billion in the last year.
With correct utilization of the tools at your disposal, there’s no reason to think you can’t grow your donor pool and donations. Know the trends and market accordingly.