Top 10 Strategies to Navigate the Current Cloudy Nonprofit Landscape
In Take Heed Nonprofits: The Sky is Not Falling, but it’s Cloudy we looked at trends in giving and how this might impact your strategic fundraising planning. Some of the data-based take-aways included:
- Less Donors and Dollars Overall
- Less Individual Donors — Shrinking Slice of Fundraising Pie
- More Foundation and Corporate Giving
- Focus of Giving Changed – or Did It?
- Overall Giving Pie Shifting to Ultra-Wealthy
If you haven’t read the afore-mentioned article, I encourage you to go back and do so now. Being armed with the facts is always useful, especially if you take the time to consider what underlies the facts. Because things are not always what they seem, and taking things at face value may lead you astray.
Philanthropic Giving Trends
While you may not be able to control the current trends in giving, you can control the way you respond to them. Once you’ve taken a hard, thoughtful look at the data, you can begin to develop your proactive stance
Remember, a trend means something is shifting, either as a general inclination or movement or in a statistically noticeable way. It’s a type of bending in a new direction, and if you want to adapt to the trend you need to be able to bend as well. Unless you’ve been studiously adapting to changing times over the past decade, status quo fundraising and marketing is not going to set you up for success in the year, and decade, to come. Now is the time to re-evaluate your primary fundraising strategies.
Please read these suggested strategies carefully, being honest about whether you’re really doing all you can do in these areas. To raise money in today’s environment, all of them are important. They each deserve a dedicated, written plan you share broadly with your entire team of stakeholders – executive director, fundraising and marketing directors, finance director, other development staff, program staff, board members and other volunteers. Development is hard work, requiring active commitment. The more publicly folks commit, the more resistant they are to changing their minds. Increasingly, it’s a team sport.
What to Do: 10 Fundraising Strategies to Create Blue Skies
Learn how to ask. If there are fewer donors and dollars, you’re going to need strategies to assure you make your best case for support with the folks who are philanthropic. This means being equipped with knowledge about donor preferences, habits and motivations so you know how best to approach them.
In particular, you should begin with the folks most likely to support you. Your best donors have linkage, interest and ability (LIA). Begin with those already linked to you by virtue of having made a previous donation, been a loyal volunteer, served on your staff or board, or been a repeat purchase of services or products. In other words, they’re hiding in plain sight in your database. They’re easy to find! Now, consider how you might learn more about these folks to better connect with them and make the best use of limited resources.
Finding what most floats people’s boats makes asking a walk in the park. Honestly, this is not rocket science. You’re a matchmaker tasked with aligning the values your organization enacts with the values your donors want to enact. Achieving this win/win should be easy, yet nonprofits have been leaving easy money on the table for years, simply because they don’t go as far as they should. They generate a gift from someone who could easily give them more, but then they kind of blow it by not taking the next logical step.
In today’s giving environment, you must go the extra mile. In the nine strategies that follow, I’m going to suggest calculated tweaks to what you’re likely already doing that will take your fundraising to the next level. These strategies work. If you invest in them, you’ll be amazed to see the money come rolling in.
1. Invest in Strategies to Retain More Donors
The donors who already give to you are your best prospects. If you haven’t yet heard the alarm to focus on donor retention, listen up now! On average, less than 20% of first-time donors renew (Fundraising Effectiveness Project), and since donor acquisition is so expensive (roughly $1.25 to acquire $1.00), you’re going to go bankrupt soon if you don’t focus on increasing the lifetime value of these new supporters. So, put in place a distinct strategy to secure a second gift from these folks.
I implore you to develop a gratitude-based donor love and loyalty program as a core fundraising strategy. Be thoughtful and methodical about this. If you don’t, you’re going to continue recruiting donors at a loss – so many, in fact, that mega-rich donors will not be able to replace the dollars lost by the decline in donor population. You can fix this, but you have to commit. The simplest way to look at this is to think about some version of the Golden Rule: Do unto donors as you would have them do unto you. Do not do unto donors as you would not have them do unto you.
2. Ask for a Larger Gift
Look for signals some of your supporters might be receptive to an increased ask. Many people really do want to help – even more than you may think. Stop thinking of asking as an imposition! Asking may actually be one of the most donor-centered things you can do, giving people an opportunity to enact their highest values. Folks just need to know specifically that you need their help, how much you hope they will give, and what the impact of their philanthropy will be. Otherwise, they’ll go someplace else that makes them feel needed.
Here are some signals to watch for:
- Their first gift was above average (e.g., $100+ for many nonprofits; perhaps $500, $1,000 or more for you).
- They’ve given multiple gifts in a year.
- They’ve given consistently over a period of years.
- They once gave a significantly larger gift, showing capacity may exist if motivation is strong enough.
- They’ve notified you they’ve made provision for your organization in their estate plan, indicating they are passionate about the values you enact.
3. Ask for a Monthly Gift
This should be part and parcel of your written donor retention plan. Retention rates for monthly donors are a good 30 percentage points higher than for single gift donors, and this has been demonstrated repeatedly over the past decade by both Blackbaud and the Fundraising Effectiveness Project. Ramping up monthly giving should be a no-brainer, but for some reason a majority of nonprofits are quite passive about soliciting recurring gifts. For tips on how to become proactive, see:
- Monthly Giving Made Easy by Erica Waasdorp;
- Hidden Gold by Harvey McKinnon;
- This free paper from Blackbaud, Sustaining Your Mission;
- Creating a Monthly Giving Program: Tips for Nonprofits by Jay Love on the Bloomerang blog, and
- Easy Ways to Boost Your Nonprofit’s Monthly Giving and Monthly Giving! Not-so-Secret Strategy to Keep Your Nonprofit Afloat Today on my blog.
4. Ask for Gifts from Donor Advised Funds
If you’ve just been waiting for these gifts to come to you, now is the time to get proactive. Money is flowing in by the billions to these philanthropic vehicles, and you need a written plan to leverage this DAF giving. More of your donors than you might imagine have these funds, and since the money is already set up in a “philanthropic wallet,” they’ve got a way to make a gift to you that’s relatively painless since it won’t impact their regular checking or savings accounts. The donated funds are already heading down the hill, like the proverbial rolling stone, without a home, direction unknown.
Do something to make your organization the home for some of this DAF money! If you’re enrolled in Clairification School (which you should be if you’re reading this article), you can watch a free student webinar on this topic. Just go here and look at the “Timely Topics” section on the top left-hand side of the page. Everything you see is available to you, 24/7, to watch or listen to at your convenience. My mission is to help you get smarter, so don’t hesitate to reach out at any time.
5. Ask for Engagement in Peer-to-Peer Fundraising
In addition to asking people to make a larger gift themselves, you can also seek the equivalent of a larger gift by tapping into people’s networks. This is where peer-to-peer (P2P) fundraising comes in. You ask current donors to leverage the dynamic of peer influence and social proof, on your behalf, encouraging folks in their networks to join them in supporting your cause.
People will listen to their peers more than they’ll listen to you! In fact, response to P2P fundraising is about 25% compared with direct-to-donor campaigns where response is 1 – 2%. If Jen Jenerosity gives you $100, and then asks 9 friends to match her gift, she becomes the equivalent of a $1,000 donors. Plus you’ve just added 9 new donors to your list, folks you can continue to cultivate and build relationships with.
My favorite P2P strategy is DIY campaigns donors can activate on their own, without the need for you to orchestrate a campaign. Once you set these up, you can more or less set them and forget them. The most popular began with “birthday campaigns,” spearheaded by Charity: water. Those were so successful they’ve now made it easy for individuals to launch a campaign for any reason (e.g., birthday, wedding, or just because).
6. Ask for Matching Gifts
These are the “Buy One, Get One” of philanthropy. Many companies will match employee gifts, but only if the employee submits the paperwork. Many donors simply aren’t aware of this benefit. Others need to be prodded to take this extra step. They need you to shine a light on the fact their donation can be amplified, making it as easy as possible for them to follow through. Check out 3 Ways to Get More of Your Donors to Match Their Gifts from Adam Wenger, President of Double the Donation.
7. Suggest Gifts of Stock
It turns out this is a terrific upgrade strategy because gifts of stock can cost a donor less than a gift of cash. Yet many donors don’t think of this, and many organizations fail to suggest stock gifts. Consequently, donors fail to consider this as a giving option.
If you learn to ask for gifts from appreciated assets, you’ll get more generous gifts. One study showed organizations who actively accepted gifts of securities achieved 66% growth! It’s one small step to add a page to your website describing the benefits of giving stocks, including instructions to make it super easy, but one giant leap for your organization in terms of the philanthropy it will unlock.
8. Ask for Legacy Gifts
A bequest will be the largest gift most donors will ever give you, so it makes sense to make a direct case for legacy support. Even though what you do today won’t result in a gift tomorrow, over time this can become a significant and reliable source of funding for your nonprofit. Check out It’s Fundraising Malpractice Not to Build Future Reserves.
9. Test, Test, Test!
There is almost always a better way to do what you’re already doing. Maybe it’s a different outer envelope or subject line that gets more of your appeals opened. Maybe it’s a change in the color, wording or placement of your donate button that persuades more folks to click on it. Maybe it’s a change in your landing page ask string, or… the list goes on. I love to check out the NextAfter archives where they generously share results from all the tests they do for their clients. Find one that intrigues you? Steal it and try it for yourself. [How about this addition of a monthly donation button that resulted in a 143% increase in conversions?]
10. Treat Donors Respectfully
Over the past several years, the concept of donor-centered fundraising has received a bad rap in some circles. This is unfortunate. When you listen to donors, and help them be their best selves, everyone comes out ahead. Because, whether a person is rich or poor, they’re likely on a quest to find greater meaning and joy in their life. And part of your sacred mission of repairing the world is to help them, much as you help those you consider beneficiaries. We’re all in this together. This is why I lead with the notion of the fundraiser as “philanthropy facilitator,” enabling everyone to come from a place of love rather than resentment or privilege. While there are certainly inequities within the social benefit sector, and beyond, these problems will not be resolved by treating donors as if they, with their whiteness, privilege and savior complex, are the problem. This goes overboard, and risks throwing the baby out with the bathwater (i.e., it risks raising a lot less money that could be going to help the missions of all the organizations who’ve decided not to treat their donors with kindness, compassion and respect).
Parting the Clouds Take-Aways
Both the GivingUSA and Fundraising Effectiveness Project reports are a reminder donors give to both what they love and in the face of something urgent, like the pandemic, immigration, the social unrest we saw in 2020 and 2021, perceived unraveling of rights (e.g., recent Supreme Court decisions) and, today, climate change.
This is not new.
Donors also give in a manner reflecting changes in their wealth, or their feelings of optimism or pessimism about their financial picture. It’s important, when planning how to engage in the marketplace, to take into account what donors are thinking and what is motivating giving. You do not abandon your efforts, but you might need to adjust your strategy to appropriately align your messaging to match what you do with what’s in people’s heads and hearts.
This is not new.
These external forces have always existed, and recent events only reinforced trends and accelerated changes. More changes are on the horizon, including adaptation to disruptive technology, greater insistence by supporters on active engagement, and the increasingly global scope of marketplace events.
This is not new.
When forces are beyond your control, your job is not to wring your hands or crawl under a table, but to lift your head high, gaze outward with clarity and focus, ground yourself in reality, and become smart, transparent and innovative in your approach to your work.
This is how smart nonprofits survive and thrive.
Bob Dylan wrote “For the times they are a-changin’.” That wasn’t a one-time state of affairs, but an evergreen universal one. Heed the call.
… And you better start swimmin’
Or you’ll sink like a stone…
… For he that gets hurt
Will be he who has stalled…
… And the first one now will later be last
For the times they are a-changin’.
Philanthropy is always changing, yet it’s also part of the human condition.
Claire, J.D., CFRE, is a former AFP-GGC board member and 2010 recipient of the AFP “Outstanding Fundraising Professional of the Year” award. After a 30-year in-the-trenches development career, Claire began her own coaching/teaching practice in 2011. Her Clairification School has been called “the best bargain in fundraising!” She also curates a biweekly e-newsletter, the “Clairity Click-it,” offering free nonprofit resources found across the web, and serves as featured expert and Chief Fundraising Coach for Bloomerang. A member of the California State Bar and graduate of Princeton University, Claire currently resides in San Francisco California.