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A weekly rundown of the latest fundraising news, ideas, and trends gathered by our fundraising editor Eden Stiffman and other Chronicle contributors. You’ll also find insights from your fundraising peers. Delivered every Wednesday.

February 24, 2021

From: Eden Stiffman

Subject: What Fundraisers Hope Will Stick Post-Pandemic

Welcome to Fundraising Update. This week, leaders share the pandemic-induced changes to fundraising they hope will stick around. Plus, new data on donor-advised-fund giving, fundraiser confidence, and endowment spending.

I’m Eden Stiffman, a senior editor at the Chronicle of Philanthropy. If you have ideas, comments, or questions about this newsletter, please write me at eden.stiffman@philanthropy.com.

Thanks to sponsor Data Axle for supporting Fundraising Update.

No Going Back

Abby Falik had spent a decade jumping on planes to meet donors on their time and turf ― at a ranch in Aspen, an airport lounge in San Francisco, a hair salon in New York City. She’d hop on red-eyes at a moment’s notice to have breakfast on another coast or in another country, believing that showing up in person was a requisite part of asking for a gift.

Suddenly, when the pandemic hit nearly a year ago, showing up was no longer an option.

In a new essay, Falik, the leader of Global Citizen Year, reflects on how she and her team have worked amid the constraints of Covid-19. Global Citizen Year has been successful in its fundraising, thanks to seeing these constraints as opportunities. She makes the case that many adaptations fundraisers have made over the past year should stick around.

In conversations on Zoom, Falik allowed herself to let down her guard with donors in a new way. “The old currency — performative confidence — was devalued,” she writes. “Authenticity, directness, and, surprisingly, vulnerability took its place.” 'How are you?’ was no longer a rhetorical question.

With pets and kids interrupting meetings and so much uncertainty about the future, Falik let herself go off script.

Under the old “rules” of fundraising, there was an agreed-upon playbook. You didn’t ask someone to give you money during the first conversation, for example. But during the pandemic, those rules went out the window, she writes. She and her team became comfortable making bigger and bolder asks for donors to support their vision. And donors trusted them.

“I was able to say, ‘I don’t know what happens next, but with enough financial runway, I know my team will find a way to expand our impact,’” she writes. “From this pitch, which would have seemed absurdly vague just months before, money flowed. People weren’t funding a plan or a promise; they were investing in potential and possibility.”

While Falik, like so many of us, eagerly awaits a time when she can travel safely once again, the pandemic has raised the bar both on what warrants a trip and on donor-fundraiser relationships, she says.

“Post-Covid, showing up to raise money will no longer mean always showing up in person,” she writes. “Rather, it means showing up as a person — confident, yes, but humble, whole, and human, too.”

In another essay, Lisa Hartsock, foundation relations executive at Valleywise Health, and Kate Fassett, vice president for development at Valleywise Health Foundation, make a similar case for continuing to use the technology fundraisers were forced to adopt over the past year.

In many cases, the changes that were forced upon development staff actually helped them improve their efforts. The Phoenix-based foundation, which raises funds and community awareness for the area’s only public teaching health-care system that serves uninsured and underinsured people, raised more money in 2020 than in any other year in its history.

After converting many of its in-person events to virtual gatherings, the foundation saw a 24 percent increase in new donors over the same period in 2019. The foundation couldn’t have managed the surge in donors without new tech tools to facilitate those relationships, the authors write. For example, they partnered with an online fundraising platform that allowed donors to set up their own web page to raise money from family and friends. That strategy allowed the organization to reach previously untapped audiences.

Scrapping in-person events and galas while leaning more heavily on virtual engagement also lowered the foundation’s cost-per-dollar raised, enabling the group to put more funds where they were needed most.

And in addition, previously tried-and-true performance measures were revisited and slightly modified to reflect the way fundraisers communicate with supporters in socially distanced times. “In the past, it would never have occurred to us to use text messages, cellphone videos, or Zoom meetings when cultivating a major gift, relying instead on in-home and dinner meetings as best practices,” the authors write. But donors appreciated those time-efficient modes of communication.

“As we look ahead to some degree of normalcy in the coming year, fundraisers should think twice before stepping back into the old ways,” Hartsock and Fassett write. “Instead, we should embrace and improve upon what we’ve learned during the pandemic.”

Read the rest of these essays from Falik and from Hartsock and Fassett.

Hear From You

What aspects of pandemic-era fundraising do you hope are here to stay? What elements of fundraising from the before times are you eager to resurrect? Drop me a line and let me know.

Need to Know

$9.1 Billion

— Total contributions from Fidelity Charitable donor-advised funds in 2020

Fidelity Charitable, the nation’s largest grant maker, reported a banner 2020, with grants surging 24 percent from 2019. That’s by far the largest total on record and comes after donors contributed $14.4 billion to Fidelity’s DAFs last year.

Yet even these record high contributions fell short of meeting the deep needs caused by the pandemic. The charity reported that donations to nonprofits that address food insecurity rocketed up twelvefold, with Feeding America, Meals on Wheels, and World Central Kitchen becoming among Fidelity Charitable’s top 20 most popular charities for the first time, reports Glen Gamboa, who covers philanthropy for the Associated Press, which is in partnership with the Chronicle to expand coverage of the nonprofit world.

Contributions to the CDC Foundation, which advances the mission of the Centers for Disease Control and Prevention, jumped 9,582 percent. But the president of that charity said it could have used a lot more. The CDC Foundation lacked enough funding to fully support some projects involved in monitoring the effectiveness of Covid-19 preventive measures in schools, for example.

So far this year, grant making from Fidelity DAFs is up 50 percent, said Fidelity Charitable president Pamela Norley. “We’re trying to make sure people know this isn’t over,” she said. “It’s important for people to recognize that there’s still a huge demand for funding.”

Plus:

  • After tanking last spring, college fundraisers’ confidence in meeting their annual benchmarks has been on the upswing since June, according to a series of surveys of development officials by the fundraising consultancy Washburn & McGoldrick. Sixty-five percent of fundraisers now say they’re confident they will meet their goals for fiscal year 2021, according to a January survey of 506 fundraisers at 84 institutions — mostly colleges and universities but also 11 independent schools and one art museum.

    My colleague Emily Haynes has been tracking fundraiser confidence. As in previous surveys, advancement leaders were more confident than gift officers about reaching goals, but in the latest survey, both groups had a more positive outlook than a few months ago. Sixty-six percent of chief advancement officers, vice presidents, and associate vice presidents said they expected their institution to meet its fundraising goals for fiscal year 2021. Among gift and alumni officers, that share was 62 percent. The survey also asked fundraisers about burnout, remote work, and productivity.

  • As they grappled with revenue losses and increased expenses linked to the pandemic, almost half of colleges increased spending from their endowments to support their operating budget in the 2020 fiscal year. That’s according to the annual Nacubo-TIAA Study of Endowments, which Chronicle of Higher Education reporter Audrey Williams June covered.

    Institutional spending from endowments increased by 4 percent in the last fiscal year despite lower average returns, according to the study, which reflects responses from 705 institutions with endowment assets of $637.7 billion. It found that endowments had an average one-year return of 1.8 percent for the last fiscal year, down from 5.3 percent from the year before. The 2020 fiscal year overlapped with only the first few months of the pandemic, which means the survey doesn’t capture how endowments might have fared during the rebound in the markets that occurred later in 2020.

    More than 40 percent of respondents reported a decline in cash flow — most likely from less tuition and auxiliary-services revenue — and a drop in giving. New gifts to endowments fell 16 percent from the 2019 fiscal year, the study found.

Turning Fine Wines Into Donations

Some wine lovers have been building their collections for decades — in some cases, more bottles than they know what to do with. Collectors often say they want to see their wines go to people who will cherish them as much as they do. Now Garth Hodgdon, who previously worked as a sommelier in some of the country’s finest restaurants, says he can help them achieve that goal — plus do some additional good for the world through his nonprofit Legacy Cellar Foundation.

Here’s how it works: When collectors decide they want to donate, they sign a one-page contract stating their intention to give wine to the Legacy Cellar Foundation and its donor-advised fund. Hodgdon then compiles a cellar inventory and brings in a third-party appraiser to estimate the wine’s value.

After that, the Legacy Cellar Foundation takes possession of the wine and finds the best way to liquidate it — either through auction or direct sales to other collectors.

Once those sales go through, the proceeds go into the foundation’s DAF. The donor indicates which charity or charities should receive the gift, and the foundation transfers the funds in the donor’s name. Donors can also sign a bequest agreement, committing to leave their wine to the Legacy Cellar Foundation to liquidate for their desired charity after they die.

Any wine collector could take a cellar to an auction house, sell the wine, and then donate the proceeds to charity. But auction houses often take a percentage of the lot. What makes the Legacy Cellar Foundation unique is its commitment to donate all of the cellar value to charity. The foundation is supported by private donors and doesn’t take a cut of the proceeds from sales of wine.

“There’s a lot of money in wine and a lot of money in wine cellars,” Hodgdon says “It can do a lot of good in the world.”

Tips & Tools

What We’re Reading

  • “People are really looking for something more than a transaction.” The annual gala, the glossy annual report, the generic requests for donations? According to a new report, a growing number of wealthy people are turned off by these traditional tools trotted out by nonprofits seeking their donations. Instead, donors are looking for a genuine relationship and partnership and are more likely to give when fundraisers present opportunities for them to give in a way that resonates with them. For example, a major donor who had attended Texas A&M University for its more generous financial aid gave $500,000 to help students stay in school after their parents had lost jobs during the pandemic. This group of donors is generally more interested in solving a problem than seeing their names on buildings. “People used to be OK with just giving the money and being done with it, but that isn’t the case anymore,” one family wealth manager said. (New York Times)
  • A fundraising effort started by New York Rep. Alexandria Ocasio-Cortez to help storm-battered Texans raised nearly $5 million in just a few days. Ocasio-Cortez announced the fundraising drive Thursday afternoon and by that evening had raised more than $1 million. “This is just something that we should be able to do whenever there is an area in our country that’s in need,” she said. The money will go toward several organizations, including the Houston Food Bank, Family Eldercare, Feeding Texas, and the Bridge Homeless Recovery Center. Winter storms across Texas left dozens dead and knocked out power for millions for days. Many still do not have safe drinking water. (CNN, NPR)
Eden Stiffman is a Chronicle senior editor. Subscribe to her weekly fundraising newsletter.