A weekly rundown of the latest fundraising news, ideas, and trends gathered by our fundraising editor Rasheeda Childress, fundraising reporter Emily Haynes, and other Chronicle contributors. You’ll also find insights from your fundraising peers. Delivered every Wednesday.
From: Emily Haynes
Subject: Why the Generosity Crisis Is a Fundraising Crisis
Welcome to Fundraising Update. This week, we explore what Millennial fundraisers want from their employers. Plus, just how much is the economy spooking donors?
I’m Emily Haynes, staff writer at the Chronicle of Philanthropy. If you have ideas, comments, or questions about this newsletter, please
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Welcome to Fundraising Update. This week we look into why so many people have stopped giving to nonprofits — and how fundraisers can bring them back. Plus, we take a temperature check on contributions during the first quarter of the year.
I’m Emily Haynes, staff writer at the Chronicle of Philanthropy. If you have ideas, comments, or questions about this newsletter, please write me.
The Giving Crisis
Why did 20 million households stop giving to charity?
That’s the question my colleague Drew Lindsay set out to answer in the cover story for this month’s issue of the Chronicle. He talked to experts and fundraisers who believe fundraising strategies and tactics may be contributing to the declining rates of giving in the past 20 years. One theory: An obsession with cash may be tamping down donors’ desire to give. That threatens not only revenues but also the standing of nonprofits as a primary force for good — this at a time when Americans enjoy a superabundance of choices for doing good.
Other data points to fraying connections between nonprofits and their supporters, Drew reports. Donor-retention rates have fallen from about half to around 43 percent over the past 15 years. Nonprofits can attract donors, it seems. But building the relationship that makes them want to give again? That’s another story.
Nathan Chappell, a former fundraiser who’s now an executive at the data firm DonorSearch, has been raising alarms about the declining rates of support for some time. But, Drew writes, he’s met largely with indifference. People discount the numbers when they see each year’s tally of total giving break records, driven by bigger donations by the wealthy. “Maybe it’s like The Inconvenient Truth,” Chappell says later, referencing Al Gore’s doomsday documentary about climate change. “In 15 years, people will say, ‘I wish I’d paid attention back then.’”
He ticks off nearly a dozen likely reasons for the decline. The flagging attendance in houses of worship. The decline of happiness among Americans. Slumping trust in institutions and nonprofits specifically.
Chappell doesn’t mention them, but critiques by some conservatives argue nonprofits have lost favor with Americans because they are pursuing increasingly political agendas. Others point to the hollowing out of the middle class; economic calamity hammered average Americans in the Great Recession-to-Great Pandemic years.
Nonprofits, obviously, can’t control the economy or improve the country’s collective state of mind. But Chappell doesn’t let fundraisers play the victim. Many nonprofits have depersonalized philanthropy, he says, letting the chase for dollars dominate their messaging and relationships with supporters.
“Nonprofits over time have traded the relationship for the transaction,” he says. “When revenue is the ultimate goal, what’s sacrificed is the long-term relationship.”
Drew’s story includes examples of nonprofits — like Charity:water, the Children’s Home Society of Florida, and Share Omaha — that are finding innovative, even radical ways to re-energize their relationships with donors. I hope you’ll take some time to read it.
For Chappell, solutions can be found in a renewed focus on what inspires generosity. “It’s about going back to the roots of what nonprofits are built to do, to bring people together to accomplish something that they couldn’t do alone,” he says. “There’s been a trade-off — money for relationships — and it’s time to reverse that. Otherwise, this crisis won’t end.”
Need to Know
— Drop in donors who gave less than $100 to charity from January 1 to March 30, 2022
Donors started off the year in a tight-fisted mood, according to data from the Fundraising Effectiveness Project. No category of the 3.7 million donors in the analysis posted growth in the first quarter of the year, though supporters who give $5,000 to $50,000 managed to maintain about the same level of giving in 2022 as they did in 2021.
The most worrisome numbers came from the set of donors who make small gifts. The number of donors who gave $99 or less declined by 15 percent from the first quarter of 2021. Also, the number of donors who give $101 to $500 dropped nearly 10 percent. Collectively, these two sets of supporters account for nearly 90 percent of the donors in the analysis.
- Do the basics to cultivate small-gift donors. That’s a simple piece of advice in Drew’s list of nine strategies fundraisers should adopt to forge stronger connections with supporters. While at least one study has noticed small donors shying away from giving, there are tactics you can use to keep them close. Make sure gift acknowledgments and thank-you notes go out promptly with thoughtful, more-than-perfunctory messages, experts say. And spell the donor’s name correctly. “People gave us money and entrusted us to use it wisely, and we can’t even remember their name?” says Jim Greenfield, a former college and hospital fundraiser.
Advice and Opinion
- How to Connect With Affluent Donors of Color: The number of high-net-worth people of color is expanding rapidly in America, but nonprofits often fail to bring many of them into the fold, said panelists in a Chronicle online briefing. Here’s what works.
- Donors Need to Recognize the Link Between Abortion and Democracy — and Fund Accordingly: Grant makers that support efforts to strengthen American democracy and those committed to reproductive justice will be more effective if they see the connection between the two issues and work together to achieve their goals.
What We’re Reading
Abortion funds across the country have received a torrent of contributions from donors expressing outrage after the Supreme Court overturned Roe v. Wade last month. Now employees at these funds are trying to figure out how to put that money to use — without breaking the law. “The words ‘overwhelmed’ and ‘inundated’ don’t fully cover how the funds’ staffs and volunteers have felt in the two weeks since the SCOTUS decision,” reports Andrea González-Ramírez. (The Cut)