The giving crisis is finally beginning to hit nonprofits where it hurts — the pocketbook. But organizations are fighting to win back everyday donors.
For the past two decades, the share of American households that give to charity has been steadily falling — it’s less than half now, compared with two-thirds in the early 2000s. For a long time, contributions from big donors masked that drop as the total amount donated increased most years. But the cracks are starting to show.
Fundraisers work to engage donors and stop the bleeding before gifts plummet.
Last year’s “Giving USA” report found that in 2022, giving from individual donors fell to its lowest share of overall giving in the last 40 years: 64 percent. By contrast, in 1982, individual donors accounted for almost 81 percent of giving. Another sign: The number of donors who gave on GivingTuesday in 2023 was down 10 percent from the previous year.
If the decline in donors continues, it could spell disaster for nonprofits, says Nathan Chappell, co-author of the book The Generosity Crisis.
“Right now, our numbers show that giving could end up in the single digits in 49 years,” he says. “That’s the horror. Any downward trajectory ends at zero somewhere.”
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Fortunately, the people raising the alarm about the giving crisis aren’t in the same position as climate activists who warn of a point of “no return.” Giving experts say generosity is still out there; as evidence, they point to the many people who give to individuals through GoFundMe campaigns or in person. Charities, they say, must do a better job tapping into that generosity with a broader array of people.
As nonprofits combat the giving crisis, a few key strategies are emerging. Organizations are working to build out their base of everyday donors with the goal of ensuring a continuous pipeline. To do that, fundraisers are working hard to build personal relationships to hold on to existing supporters, take advantage of donors’ own networks to attract new support, and rethink how to measure fundraising success.
More Phone Calls
Job number one for organizations is to hold on to existing supporters. Building closer ties with donors through personalized stewardship — such as phone calls, handwritten notes, and messages tailored to each donor’s interests — is an important way to do that. Many organizations may worry they don’t have the staff to thank every donor, but getting creative with volunteers can help.
That’s what the Farmlink Project did. Started by a college student, the organization has long relied on the verve and exuberance of young-adult volunteers. These college volunteers help connect surplus produce to hungry people — and also interact with donors.
“Something that the Farmlink Project had as its advantage when it started was hundreds of student volunteers, which meant major capacity,” says Emma Worth, vice president of development. “This meant that if you gave even a pretty modest-size gift, you could expect to receive a phone call.”
That same energy carries forward today; volunteers share stories about the organization’s work when they call to thank donors. “We try to make sure that we’re demonstrating the impact of their gift,” Worth says.
At National Angels, which helps children and families in foster care, fundraisers make personal phone calls and send handwritten notes — but they also try to involve donors in volunteer activities. Supporters who can’t volunteer in person are encouraged to write a letter of encouragement to a child in care or a family who is fostering a child, says Erika Carley, chief development officer.
“What we’re trying to do is engage people based on doing something good,” she says.
Friend to Friend
While individuals make giving decisions, people are distinctly social animals. Nonprofits are finding clever ways to encourage donors to introduce their friends and family members to the cause.
The Food Bank for New York City has found success with events that let people come together and bring their networks with them. A favorite is the Five Borough Challenge, where the five sections of New York City compete against each other to see which can raise the most money for the charity.
It’s “just a fun way to have people show pride in their borough and to contribute,” says David Jones, vice president for fundraising operations. This event and others, like races, where donors ask people they know for support, have helped to expand the group’s base of supporters. The food bank has actually stopped new-donor acquisition campaigns. That means the group no longer sends new-member appeals to purchased lists of potential donors.
“We instead went more organic,” Jones says. “We relied on public relations … and then leaned more into peer-to-peer fundraising to try to get other people to identify friends for us. That’s been where we are for the last couple of years.” In that time, the food bank has won thousands of new supporters, whom it hopes will stick with the organization as a community of givers.
This strategy embraces research that suggests donors who have friends within an organization are more likely to stay, says Josh Birkholz, CEO of the fundraising consulting firm BWF.
“When the donors are friends with each other, they’re likely to keep giving,” he says. “When I give to an animal rescue, I’m not just giving because I care about animal rescue. I’m also in some ways declaring I want to make friends with other people that care about animal rescue. I’m joining an identity philanthropically.”
How to Measure Success
Getting closer to donors and encouraging connections among supporters is all well and good, but will fundraisers do it if they’re being evaluated strictly on how much money they bring in? Chappell, the author, doesn’t think so.
“The number-one thing that needs to happen for us to really reverse the giving crisis is that how [boards] evaluate nonprofits’ success has to be measured on relationships and not revenue,” he says.
Birkholz agrees. He argues that nonprofit leaders should rethink which metrics are rewarded so that the actions that contribute to the long-term health of the organization’s fundraising are as prized as bringing in an eye-popping donation. “There’s a ceiling on the career path for the everyday-donor functions,” he says. “The likelihood of me moving my way to being the chief fundraiser or climbing up the org chart is low unless I jump over to major giving.”
National Angels emphasizes donor engagement over dollars raised. Carley, who trains fundraisers throughout the group’s network of 20 organizations, doesn’t want fundraisers to make random cold calls. Instead, she wants them to make targeted asks of supporters after engaging “with them in really specific and individualized ways.” Fundraisers, Carley says, should focus on “high-touch, one-to-one communication.” Think phone calls, invitations to events, and updates on what the organization is doing.
“One of the things that I was really focused on was trying to shift the mind-set of how we measure success in fundraising,” she says. “The amount of money that you raised — that’s not where we look at success. That’s not how we measure success. We measure success by the number of people you ask.”
