With 2023 in the rearview mirror, many fundraisers are looking ahead and thinking about what this year will bring. Here are five issues — which present both challenges and opportunities — that nonprofits should have on their radar as they strive to reach their 2024 fundraising goals.
Artificial Intelligence
A.I. use grew exponentially in 2023, and that trend will continue this year. Fundraisers are testing how best to integrate A.I. tools, so expect more learning on that front. They’re using simple writing tools like ChatGPT and Google’s Bard to help write appeals, thank-you letters, and grants. A slew of paid products and services also have become available, allowing fundraisers to better target donors. But this new technology brings ethical and legal concerns — such as protecting donors’ sensitive information by not uploading it to A.I. systems the nonprofit doesn’t control.
To help nonprofits better understand what’s happening with A.I., GivingTuesday has created a new online working group to get beyond the “hype” and showcase what’s practical and useful. Nathan Chappell, senior vice president of the donor-intelligence data company DonorSearch, said at a Chronicle event that fundraisers will need to use A.I. for future success.
“I do not believe that A.I. will replace fundraisers or nonprofits, but nonprofits that use A.I. will replace those that don’t,” he says. “Start — because if you don’t, you will be left behind.”
This year, nonprofits will need to figure out how A.I. fits into their fundraising strategy, and begin executing that game plan.
Donor-Advised Funds
Ten years ago, it might have been hard to find many charitable-minded folks who knew what a donor-advised fund was. Nowadays, DAFs are the giving vehicle donors are contributing to most, with gifts to DAFs outpacing gifts to foundations. These funds, which allow donors to get the tax write-off immediately, are like foundations but with fewer regulations. Money in the funds is invested, and donors can dole out grants to their favorite charity. They’re especially useful in a down economy because the money has already been set aside. Unlike foundations, there are no distribution requirements for DAFs, leading to criticism that money that should go to charity — and for which donors have already received a charitable deduction — is sitting unused.
Despite the criticisms, DAFs have become a big player in the nonprofit world. Last month, several charities appealed to DAF account holders in their year-end giving campaigns.
With the new year ahead and an uncertain economy, fundraisers are expected to encourage DAF account holders to make gifts from their funds. DAFs hold more than $228 billion, according to the National Philanthropic Trust, so reaching donors with those funds should be top of mind in 2024.
Recruiting New Young Donors
The most recent fundraising data from “Giving USA” shows giving by individuals, who typically provide the bulk of all donations, fell by 13.4 percent after inflation. With the number of donors decreasing, many nonprofits have been relying on big donors, often older individuals. One fundraiser at a conference last year noted her organization’s best donor was 102 years old, and that was worrisome for future fundraising. To expand donor pools and tap into the great wealth transfer expected to happen in the coming years, fundraisers need to focus on including more donors from younger generations.
GivingTuesday CEO Asha Curran reminded fundraisers to “be very intentional and mindful about engaging younger supporters, remembering that they become bigger givers later in life.”
To tap into younger generations, fundraisers will need to meet them where they are. That means building a rapport with them because research shows they’re less trusting of traditional charities. Younger donors are more likely to give to a GoFundMe campaign than to a nonprofit. That doesn’t mean they’re less generous, but it does mean that fundraisers will need to shift strategies and bring their A game to attract them.
These changes can be big or small. The Mohawk Hudson Humane Society created a fundraiser known as Oktopurrfest to appeal to younger donors. The Brooklyn Community Foundation rebranded to Brooklyn.org so it didn’t seem so old and controlling and would appeal to younger supporters.
While most charities won’t require a name change, fundraisers will need to design a blueprint to reach these younger givers — and then put it into practice.
Polarization
It’s a presidential election year, which is bound to amplify division in an already polarized country.
At the end of 2023, some very wealthy philanthropists revolted. Donors at Harvard and the University of Pennsylvania pulled gifts over concerns that the universities weren’t doing enough to fight antisemitism. Charities began to rethink whether they should issue statements on current events. What this means for the nonprofit world as a whole isn’t clear, but some experts weighed in. Opinion is wide-ranging. Some say donors have the right — and responsibility — to wield their influence on important issues they care about. Others argue that donors flexing their financial power “will have a long-lasting and chilling effect on the nonprofit sector.”
It’s not just fundraisers who work with billionaire donors who encounter polarization’s effects on giving. Navigating difficult conversations will require poise and careful preparation.
Polarization isn’t going away, according to Kristen Cambell, CEO of Philanthropy for Active Civic Engagement. “Democracy actually requires us to have different and sometimes polarized opinions,” she says. “It’s how we debate things. It’s how we make difficult decisions.”
Fundraisers have always had to walk a fine line with mercurial donors, but with the election and emotions at a fever pitch, it will be more of a high-wire act than ever this year. Making a plan to deal with potential hot-button issues in advance should be on every fundraiser’s bingo card this year.
Staff Retention
Continuity is important for fundraising: Donors know what to expect, and the organization can find a rhythm.
Unfortunately, turnover and vacancies remain a persistent problem. Last year, 52 percent of nonprofits said they had more vacancies than before the pandemic. In the Chronicle’s recent, exclusive poll of 1,000 fundraisers, 53 percent reported that filling open fundraising positions was challenging, and 40 percent said their organizations currently had open fundraising positions. Because life just keeps making things harder, research also found that fundraisers are heavily recruited by other fields.
Many people thought the end of the pandemic would help alleviate staffing issues, but so far, that hasn’t been the case.
This year, it will be important for nonprofits to create a working environment that can help attract and retain fundraisers. Hybrid and remote work options may be helpful. The University of Virginia’s development department reduced its turnover rate from 30 percent to a 10 percent, in part by implementing remote and hybrid work. Also, look at your organization’s fundraising atmosphere to make sure staff have the support they need, especially to deal with difficult or harassing donors.
One way to start the year off right: Watch our online briefing on how to improve fundraiser satisfaction. Advice from expert panelists will help you take stock of where your fundraisers are and what options they want — such as flexibility or more training. That can help keep them at your org.
