What does 2020 look like for your nonprofit? It can seem there are many unknowns that affect volunteer habits and philanthropic trends. However, your organization can better prepare for tomorrow by (1) understanding the sentiment of today’s donors and volunteers, and (2) considering important predictors that tend to affect giving. We have scoured a variety of resources to bring you nonprofit trends, from corporate philanthropy to nonprofit management, that may give your organization the edge and help inform your 2020 strategy:
Trends in Nonprofit Fundraising
What are the current trends in philanthropy and nonprofit fundraising? Let’s look at the current state of giving that can help shape your 2020 fundraising strategy:
New Strategies for Building Donor Loyalty
Today’s consumers are more likely to purchase a product if they receive personalized communication, and nonprofit fundraising trends are following suit. So it’s more important than ever to build better relationships with your donors.
In 2020, fundraising should feel less transactional and more personal. But personalized fundraising is about more than just using a name on an email. Get to know your donors, large or small, and make an appropriate donor recommendation; demonstrate that your organization shares their values; provide opportunities for your existing volunteers and donors to contribute their ideas and feedback. Donors who engage with your cause on a deeper level are more likely to become loyal supporters.
Nonprofits are also finding increased success with membership programs that offer tangible benefits. These benefits may include swag (like t-shirts, hats, water bottles), VIP admission to an event, or any other perk that the donor receives in exchange their annual donation. In 2018, these types of memberships accounted for 77% of total online revenue for those nonprofits who offered them. Memberships are not only an opportunity to boost revenue, they also offer the long-term benefit of bolstering donor loyalty.
A Different (and Direct) Way to Ask
Charitable organizations have often used their past successes to appeal to donors, asking for donations to help continue its efforts. However, this model may prove less effective going into 2020. Today’s donors want to know their contributions are making a difference. Younger givers are especially motivated by a sense of social responsibility; they want to be a part of the change-making process. To engage the next generation of donors, you may need to change the way you ask for funds. This article suggests using the following outline to appeal to donors:
- There’s a problem occurring right now.
- You’re needed to solve the problem.
- Here’s how your gift, or time, will solve the problem.
This model tends to engage the proactive donor by identifying a current need and shifting the focus from the past to the present.
Monthly Giving on the Rise
Subscription services are flourishing—and that’s no surprise. Smaller, monthly payments that automatically renew tend to be more manageable and convenient for consumers, while companies enjoy increased customer retention. The concept has influenced philanthropy trends, too. Monthly givers tend to donate more over time than their counterparts who donate once per year. In fact, the annual value of regular givers is worth nearly 3 times more than that of one-time donors! Check out this article for ways your organization can promote monthly giving.
Online Fundraising: A Major Source of Revenue
Digital philanthropy is widely favorable among donors (and the nonprofits they support). Nonprofits have reported a 77% increase in online revenue over the past 5 years! Email accounts for 13% of online giving, but successful email fundraising can require a bit of strategy. This article by Whole Whale is a great resource to help nonprofits like yours to optimize fundraising emails.
Despite Facebook’s rocky year in the public eye, nonprofits saw a steep increase in revenue from a peer-to-peer fundraising tool called Facebook Fundraisers in 2018. Studies have yet to be completed for 2019, but experts are predicting further growth into 2020. On average, nonprofits raised $1.77 through Facebook for every $100 of total online revenue.
The uptick in direct donation platforms like Facebook Fundraisers suggests that it’s worth diversifying online fundraising efforts. In fact, many nonprofits rely on social media to help supplement fundraising efforts, and we don’t see that changing in 2020. Quick tip: bare in mind that photo posts have the highest virality; pair your Twitter, Instagram, or Facebook donation requests with an image and they’re more likely to heed your call to action.
While technology is the biggest driver of change, according to this report, you may not want to discount the power of person-to-person interactions. The same report reveals that a significant portion of consumers actually want to disconnect from their devices (this social interaction is why volunteers are happier and healthier). Your nonprofit may consider appropriate ways to provide donors an authentic and engaging giving experience.
Smarter Fundraising in the Face of Disaster
Experts are predicting a surge in environmental activism over the next 10 years, as communities demand action. And as natural disasters become increasingly devastating, disaster prevention and recovery are relying more on the good will of individual citizens. Many disaster funds receive outpourings of charitable donations from individuals and corporations immediately after a disaster event.
However, funding can just as quickly subside, even when significant need remains. If your nonprofit gets involved in disaster mitigation and relief, the Center for Disaster Preparedness suggests shifting the focus from short-term, reactionary giving toward a more sustainable, strategic giving plan to have the most impact. Here are some ways to prepare for disaster smarter:
- Plan ahead: Have a program in place, ready to collect donations or lend services for planning, recovery, and immediate relief efforts.
- Think holistically: How can your organization, your volunteers, and their skill sets make a difference?
- Be strategic and sustainable: Waiting for a disaster to strike before we act is unsustainable. A changing climate calls for creative thinking and preparation. Support innovative prevention, mitigation, and adaptability programs.
Research has shown that disaster-relief giving can heighten “prosocial behavior such as charitable giving and volunteering in the long-term.” Make sure your nonprofit has a program in place to receive donations and supplies when disaster strikes (and consider partnering your community’s disaster mitigation efforts).
Preparing for the “Election Effect”
2020 is election year. 2016 saw an outpouring of donations and volunteers participating in civil rights, social action, and advocacy programs. In the aftermath of the 2016 election, many nonprofits experienced an increase in recurring donations and volunteer participants. In fact, donors who signed up for a recurring donation around the election were 50% more likely to donate again within 18 months. Social sector nonprofits can capitalize on the “election effect” by offering recurring donations and boosting fundraising efforts around election time.
Shifting Trends in Corporate Philanthropy
Since 1978, the Business Roundtable has issued a public statement setting the standard for the Principles of Corporate Governance. Historically, these statements endorsed the philosophy that corporations exist “principally to serve stakeholders.” However, in August of 2019, Business Roundtable released a different message; 181 CEOs committed to put in place practices that benefit all stakeholders, including customers, employees, suppliers, shareholders, and communities.
Jamie Dimon, Business Roundtable Chairman, announced, “Employers are investing in their workers and communities because they know is the only way to be successful over the long term. These modernized principles reflect the business community’s unwavering commitment to continue to push for an economy that serves all Americans.”
Nonprofits are expected to benefit from the changing attitudes of consumers and forward-thinking CEOs, so it’s especially important that organizations are looking to adopt best practices when it comes to leveraging corporate philanthropy in 2020:
Corporate Giving on the Rise
The shift in corporate philanthropy trends is good news for nonprofits and charities across the country. With changing sentiment from employers and consumers, corporate giving and volunteerism are on the rise. Giving by corporations was up 3.2% in 2019 and is expected to rise another 2.6% in 2020. Furthermore, the Philanthropy Outlook predicts giving by corporations to “exceed the historical 10-year annualized average rates of growth.” While there are many factors that affect giving tendencies, experts suggest that corporate philanthropy in 2020 will be impacted most by (1) growth in GDP and (2) growth in corporate savings.
Upward trends in corporate philanthropy are reinforced by an expanding variety of giving options. One promising option is impact investing, an emerging movement in which investments are made in companies, funds, or organizations for the purpose of creating social impact in addition to financial gain. Choices like these are making workplace giving more appealing to employees, and support more modern principles of corporate governance. Regardless of how companies and their employees choose to give, strong corporate partnerships will become increasingly necessary to sustain community-based and national nonprofits.
Employee Sentiment Drives Corporate Giving Trends
According to the Philanthropy Outlook for 2018-2019, companies have begun to recognize the benefits of focusing on their employees’ philanthropic interests. In fact, 58% of Americans consider a company’s social and environmental commitments when deciding where to work. In this report, employees cited lack of choice in eligible nonprofits as the biggest deterrent from giving. Companies who allow employees to choose the causes or organization in which they donated experience greater employee engagement with workplace giving programs. Nonprofits should also work to connect with corporate giving programs to solidify eligibility.
From employee volunteer grant programs to company-wide volunteer days, businesses are looking for creative ways to improve public image, lend a hand, and promote employee well-being. To foster meaningful corporate partnerships, nonprofits can strive to be receptive to the goals and interests of employees and suggest opportunities accordingly. Processes like simple team sign-up and volunteer impact reporting are inviting to businesses with workplace volunteer programs. Employees who have a positive experience volunteering through a company program are more likely to volunteer with your organization again (and refer their coworkers and friends)!
Nonprofit Management Trends
Let’s shift our focus inward. What will nonprofit and volunteer management look like in 2020? Here’s what we found for emerging trends in nonprofit management:
More Inclusive and Diverse Leadership
Historically, the key strategists at nonprofits were less entwined with the fabric of communities, “women of color do the lion’s share of work in nonprofit organizations, yet they fail to make it to the top leadership and strategy roles,” says Denise Collazo, Senior Advisor at Faith In Action. The past few years, however, are encouraging. Organizations are making more of a concerted effort to establish thoughtful leadership practices. 2020 is the year to evaluate your organization’s leadership structure and ensure your it’s representing a range of community voices.
Maintain a Clear Mission
With an impending presidential election on the horizon, history dictates that a record number of nonprofits are competing for the public’s attention and resources. Thom Ruhe, President and CEO of NC IDEA, urges, “the nonprofit sector, more than ever before, will need to stay mission-focused and clear about their priorities. We will need to be the safe port in the storm.” The new year is the natural time for nonprofit organizations to review missions, goals, and procedures in light of current fundraising and volunteer engagement strategies.
Transparency is Key
By definition, nonprofits are required to be agents of transparency in order to maintain 501(c)(3) status. But transparency is becoming increasingly important to your community supporters. Tracking and reporting on data such as volunteer impact and Return on Investment can not only help you win grants, it can also attract more donors and volunteers. For-profit companies are reporting that transparency is becoming increasingly important to their customers; consumers want to know they’re purchasing socially-responsible products or services. Likewise donors and volunteers like to understand how their efforts are making a lasting difference, and where their contributions are going. But transparency isn’t the tricky part; it’s keeping track of the data that nonprofits tend to struggle with. It’s not uncommon for nonprofits to find themselves strapped for resources, or simply without data-tracking technology in place. Organizations are therefore finding it increasingly important to invest in digital tracking tools. Check out this article for more on nonprofit technology trends.
Nonprofit Networking and Management Platforms
Nonprofits act as community hubs. They connect the private sector, donors, volunteers, stakeholders, and decision makers. Heading into 2020, it’s essential that organizations like yours have the tools to more easily develop, maintain, and manage these relationships. Software is getting smarter and can often serve multiple functions within your organization, from email marketing to donor and volunteer management. When used effectively, implementing relationship management technology can ultimately increase your return on investment.
While it’s difficult to predict the exact course of future nonprofit trends, organizations can better prepare for a new year of change-making by remaining abreast of public sentiment toward giving and volunteering. We hope that these insights will help you to better strategize for 2020.