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Nonprofits that want better fundraising results will need to engage donors in a wider variety of ways, creating a dialogue that isn’t always about money, especially in difficult times, two recently released studies suggest.
One perspective comes from the Indiana University Lilly Family School of Philanthropy, which released “The Giving Environment: Giving During Times of Uncertainty.” The study uses data from the Philanthropy Panel Study, which followed specific families during the pandemic. Giving patterns during that time offer important lessons for today, the report contends — chiefly that people give, even in times of economic uncertainty, when they understand there is a pressing need, says Una Osili, associate dean for research and international programs.
“There are lot of really good lessons to take away from the pandemic,” Osili says. “There was a lot of awareness of need. Even though it was a challenging time, people saw an opportunity and a way to make a difference.”
The report found that the decades-long trend of fewer donors giving more dollars continued throughout the pandemic but that some new donors emerged. “This new group of donors may be more responsive to rapid community support, nonconventional forms of philanthropy, and digital fundraising efforts,” the report says.
The panel data doesn’t go beyond 2020, but Osili says anecdotal evidence suggests that engagement tailored to those donors’ needs helps them stick around.
“One size fits all doesn’t work,” she says. “In this era, it’s much easier to actually tailor those appeals so that they are more attuned or aligned with the donor’s values and interests.”
‘Donor Fatigue Is a Myth’
Separate data from the Fundraising Effectiveness Project identifies similar themes. According to that report, in the second quarter of this year, the number of donors declined in every category — from micro-donors who give less than $100 to supersize donors who give more than $50,000. However, the amount donated was up by 3.7 percent. Donor retention fell 4.5 percent, according to the report.
This data suggests nonprofits need to do more to engage their donors, says Woodrow Rosenbaum, chief data officer for GivingTuesday, which helps compile the FEP report alongside the Association of Fundraising Professionals.
“Donor fatigue is a myth,” he says. “But that doesn’t mean that the donors aren’t tired of the same old transactional engagement.” Donors want to “maintain a dialogue that isn’t always just asking for money,” Rosenbaum says. When they get that, they are engaged longer.
Rosenbaum, who collects data for a variety of reports that GivingTuesday participates in, says data from the GivingPulse report suggests that engagement with donors is the key to retaining them.
“If we don’t show up as organizations and give people an opportunity to be part of our mission, then they’re not gonna stick with us,” Rosenbaum says.
Independently, he added that the pandemic showed that engaged donors give and stick around. “We saw in 2020 — that giving moment driving lots of new donors,” Rosenbaum says. “A lot of those donors stuck around the following year at a much higher level than had ever been experienced. That’s the recipe. We just need to be properly engaging.”
Other findings from the Giving Environment report:
- Although people of color saw a disproportionately higher rate of Covid mortality, their giving did not decline disproportionately.
- Secular giving rates declined more than religious giving during the first year of the pandemic.
- Recipients of stimulus checks donated “greater amounts than would have been predicted without the pandemic.”
Other findings from the FEP report:
- New donor retention declined by 9 percent, year over year.
- When looked at by size, most organizations saw their average fundraising performance decrease. The two exceptions were groups raising less than $100,000, or raising $250,000 to $1 million. However, the report notes the increase for the smallest organizations was driven by a few outliers that did exceptionally well.
- Education as a sector had the largest year-over-year growth, with a 5.9 percent increase in dollars, but it was driven by a small number of organizations. Median year-over-year support for education was down 1.7 percent. Environment and animals saw median fundraising growth of 4.6 percent but a 1.8 percent decline in overall dollars raised by the sector.
