4 Issues & Trends Affecting Fundraising In The US

This week, the CrowdRise by GoFundMe team is in San Antonio for the AFP ICON 2019 conference, and also to get in a few bites of Tex-Mex. While we’re at the conference, not only are we giving intimate product demos and taking Decent Human selfies, we’re also live-blogging some of our favorite education sessions from AFP ICON for those back at home. Here is a recap of one of those sessions now…

As fundraising has grown in importance over the last few decades, thanks to the overwhelming impact it has had on nonprofit success and advancement, so has the critical analysis of what we know (and what we think we know) about the topic.

It was this exact need for “critical fundraising” that prompted Rogare, the Fundraising Think Tank, to dedicate time, research, and analysis to attempting to understand the issues that nonprofits face in fundraising, so they can begin to make better decisions and grow their fundraising programs.

At AFP ICON 2019, several of Rogare’s Task Group members sat down to go over some of the findings of their most recent USA Critical Fundraising Report, including donor trust, donor retention rates, social fundraising, data, professional standardization, and more. Here is what they cited as some of the largest current issues and trends affecting fundraising in the US…

4 Issues & Trends Affecting Fundraising In The US

1. Donor trust in nonprofits is stagnant

Donors over the last 20 years have had more access to resources and reviews than ever before that allow them to do their own research before making giving decisions. Because of this, you can no longer rely on only your brand and marketing message to make you trustworthy to your donors — you need to be more transparent and accountable than ever before.

“Donor trust in the nonprofit sector has been stagnant since the early 2000s,” according to the USA Critical Fundraising Report #3. “Reports by the media in the late 1990s of mishandling of funds by a few organizations prompted wider questions about how nonprofits spend their budgets … Thus nonprofits feel compelled to limit their operating costs to appear more attractive to donors. But by doing so, they compromise their ability to produce results, scale, innovate, and have reserves.”

The solution? Better communication with donors about the impact they are making with their support.

Think about it… when you go to a store or a restaurant, you immediately see the value of your dollar because you are getting back something tangible. But nonprofit donors don’t know what they don’t know. They need to hear it from your nonprofit directly that their gift is making an impact. It falls to the nonprofit to be able to communicate to their supporters properly and make sure impact is known.

2. Donor retention rates are stagnant

Nonprofits in the U.S. are not doing great at retaining their existing donors. In fact, according to the Fundraising Effectiveness Project, nonprofits are only retaining 45% of donors, leaving them struggling to reinvent the wheel every year.

“It costs 10x more money to acquire a new donor than to retain an old one,” according to the Task Group member panel at AFP. “The cost to acquire new donors is rising, because they are getting immune to the old tactics. There is also a weird cycle that exists among nonprofit staff that they’re always trying to fill the bucket with water, instead of trying to plug the holes that are already in the bucket.”

The solution? Again, your donors need to hear your thanks and about the impact they are having. Also think about the story that you are telling your donors — are you quantifying donors with growing relationships with your nonprofit, but who only give sporadically? And are you letting it be known in your messaging that your cause has ongoing requirements?

Answering these questions will help to fill out the donor retention puzzle.

3. Data, technology, and social media are affecting fundraising

It goes without saying that we have more data and technology than we ever have in the profession — we don’t need research to tell us this. Our profession has grown from 3×5 cards storing data to CRMs in just a few decades. But even though we have access to more than ever before, we are accessing it less.

“We’re not using the data and technology we have, so are we any better at fundraising than we were before when we didn’t have all of this information?” asked the Task Group member panel. “Digital is only raising 10%. Is this online giving number so low because people don’t want to give online, or because we as an industry suck at it?”

As the Critical Fundraising Report #3 states, “The technological tools available to fundraisers now are myriad and offer solutions to nearly every aspect of fund development. However, many nonprofits cannot afford or do not have the expertise or knowledge to implement tools that would drastically increase their fundraising results. Many practitioners may not even know that the resources exist.”

The solution? If you’re not already investing in multi-channel communications and the data that is stored in these platforms, you’re falling behind. “Standard mail, email and phone are no longer viable stand-alone methodologies and donors of all generations are using multiple platforms for all their communications … Data quality can have the single largest impact on revenue; as data ages or becomes incorrect, fundraisers lose donors through the inability to contact them, or contact them correctly.”

4. The misalignment of social fundraising data sources and donor relations

Here at CrowdRise by GoFundMe, we are a broken record about the importance of social fundraising. But we are no longer the only ones shouting about it’s value.

According to Rogare’s Critical Fundraising Report #3, “Social fundraising and online giving platforms are changing the landscape of fundraising and marketing for nonprofits. In a world where technology innovation is happening at a faster rate than ever before, nonprofits are lagging in their ability to both keep up with the rate of innovation, and also in mining disparate data sources to drive true, intentional relationship fundraising.”

Many people wrongly assume that only Millennials are making donations online. But your aunt, your grandmother, your mother-in-law… they’re all on these channels and are mobile donors now. 46% of Americans say that they wake up and check their smartphones while they are still in bed.

The solution? “Nonprofit staff should be given time and dollars for training and continuing education on social engagement and online giving platforms.” Not only that, but as data continues to play a massive role in developing relationships with donors who give online, nonprofit orgs should invest time in understanding these donors in order to build meaningful relationships with them, and sustain loyalty to their cause.

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A big thanks to the Task Group members at Rogare for such an insightful session at AFP ICON 2019. To download their full United States of America, Critical Fundraising Report #3, click here.

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4 Issues & Trends Affecting Fundraising In The US
4 Issues & Trends Affecting Fundraising In The US
4 Issues & Trends Affecting Fundraising In The US
4 Issues & Trends Affecting Fundraising In The US
4 Issues & Trends Affecting Fundraising In The US

4 Issues & Trends Affecting Fundraising In The US

4 Issues & Trends Affecting Fundraising In The US