Giving outlook grim, fundraising poor but hey we’re tweeting!
- Wed, August 18 2010
- Filed under: Fundraising essentials
Today, some important news released:
1. GuideStar said today the giving outlook is grim (though as I always like to point out, online giving is up). Notably, The Effect of the Economy on the Nonprofit Sector: A June 2010 Survey said:
•Some 40 percent of participants reported that contributions to their organizations dropped between January 1 and May 31, 2010, compared to the same period a year earlier.
•Eight percent indicated that their organizations were in imminent danger of closing.
•Sixty-three percent reported a total increase in demand for their organization’s services between January 1, 2010 and May 31, 2010, compared to the same period a year prior.
•In order to balance budgets, 17 percent of respondents reduced program services, and 11 percent laid off employees.
•More than 60 percent of participants reporting decreased contributions attributed the drop to a decline in both the number of individual donors and the size of their donations.
•Among organizations that use volunteers, 17 percent used one or more in what had formerly been paid positions.
•About a third (32 percent) of organizations increased their reliance on volunteers, whereas 9 percent experienced a decline.
2. We’re not doing a good job cultivating large donors.
This, according to Greg Ulrich, a management consultant who has worked with businesses and nonprofit groups. He led the study, Money for Good, and he said in today’s Chronicle of Philanthropy (article requires membership to access):
What we learned is both encouraging and frightening. On the encouraging side, we found that $45-billion in potential donations is available annually from people who make $80,000 or more a year. (Those people make up the wealthiest 30 percent of American households.) That figure includes gifts that donors would be willing to switch from the charities they support now and new money they would be willing to donate to organizations that appeal to them the right way.
On the frightening side, we learned that most nonprofit groups are pursuing the $45-billion in the wrong ways—ways that, despite their best intentions and efforts, are unlikely to be effective. And being ineffective is easy given that $150-billion of the donations that affluent Americans contribute annually is essentially out of reach. Donors are exceedingly loyal to the organizations they already support, and they are not likely to change their minds about how to distribute that $150-billion.
In case you are concluding this is my most depressing post ever, he has some good advice for you, which includes:
*Approach your donors with a focus on their motivations and behaviors, not simple demographics.
*Concentrate on just a few types of donors that may be attracted to your cause, not everyone!
*Be focused, consistent and simple in your marketing approach.
Listen to this:
It turns out that only about one-third of all donors do any research before making a donation, and the vast majority of those who do, research simply to validate their gift (not to look for the charity that will make the greatest difference with their donation). Donors also want simple facts and figures and look to the nonprofit itself for that information. So make that easy to find. You don’t need to provide them with 15 key measures of performance or an abundance of information that does not matter to them (like, for instance, the size of the problem you are trying to solve).
Great advice in my view.
3. While we may stink at fundraising and giving is down, at least we’re tweeting! Yikes. Maybe our time would be better spent following Greg Ulrich’s advice.
Hat tip to Agitator for highlighting this data:
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Comments
I think nonprofits aren’t doing a good job of cultivating donors, period. Regardless if they’re large or small. And regardless of the means used to communicate - be it Twitter or social networking or whatever else.
I think we’re witnessing a serious paradigm shift: once upon a time, an entire generation of donors donated just because it was the “right thing” to do. Now that generation is passing, and nonprofits have to deal with that on top of a recession and everything else. May you live in interesting times, I guess!
Lastly, I wonder what is motivating the two thirds of donors who don’t do any research… somehow I don’t think it’s an organization’s awesome impact metrics, but probably something more banal, like an organization’s awesome marketing. Or being in a donor’s general vicinity…
You’re completely right in your second point about donors becoming more choosy about where they put their charitable income. Some more food for thought on donors catching cut back fever: http://bit.ly/a2HbdL
But ultimately it’s about engaging with those donors, not just accepting a check (or PayPal contribution). It’s about building the relationship, engaging them on an emotional level, and showing them that you care. Make a good first impression, educate them on the cause, check in not to talk about a contribution, and follow up.
On the other hand, 30% of the respondents noted the contributions INCREASED and 28% reported that donations had stayed the same.
Wouldn’t a better question be: what is the 30% doing differently that we’re not doing? How is the 28% maintaining the same level of contributions - despite the economy?
As Cherita notes, ultimately it about truly engaging our donors - no, not when you send out your once-a-year appeal (and if you’re still only sending out an appeal once a year, shame on you) or thank you letter, but engaging year-round (I recommend a minimum of 12 *touches* per year) via direct mail, social media, email and phone.
Fantastic points.
Pamela, I completely agree the question should be: what are the 30% who are doing well, doing right? I agree the touches are what matters—touches that use compelling stories to show great impact.
That is great advise about stressing where the most good can be done with the donors gift and using simple facts and figures to back this up. This is a very easy way to get someone to reevaluate how to distribute their donations.
In addition, the Amazon acai is an all-in-one multi-vitamin product. Another significant fact is that the Amazon acai berry is an all-inclusive vitamin product.
The 30% are most probably using modern technology/techniques and new ways to raise funds. I know of one non-profit organisation which now uses the internet (which generates word-of-mouth if done correctly) to raise awareness/funds. Before they used somewhat expensive advertsing (mailing etc) and a lot went into resources. I think it is a matter of ‘how’ you use what you have to hand, rather than using a fixed process for every problem/changelle etc.
Here’s my thought.
So what if we’re tweeting?
Tweeting is good, but giving is better.
We wonder why we’re not getting major donors? Because if nonprofits are not investing in fundraisers, if they are contributing to massive fundraiser turnover, then they are going to get inefficient systems with no major donor programs.
We need to treat fundraisers with more respect. We need to attempt to understand what they’re doing and to help them. We need to see fundraising as everyone’s job in the nonprofit, not just the Development person.
People who have thriving major donor programs have put the resources into the teams to create these connections.
Why not talk about paying fundraisers more, to retain them, or making major gifts a focus of AFP meetings or other regional nonprofit meetings?
Mazarine
You’re completely right in your second point about donors becoming more choosy about where they put their charitable income. Some more food for thought on donors catching cut back fever
The tips are justified but come on, the nonprofits are really good at cultivating donors. And most of them are using the online media in this way.
While we (as a business and from our family) aren’t giving as much this year, we are still very conscious of the importance to do so. While it may be more difficult to get donations than in the past, donations are not the only thing that is low right now…
Effective distribution to the right people is one of the key elements of this. Just raining more money by itself will not do.
I think the recession has made alot of people look at how much & who they’re giving to. Organisations need to try even harder to convince people to donote.
I agree with Matt,recession has one factor people are choosing who they’re giving to & they are now thinking wisely for even a single cents they have to put.
I know business is tough here and has effected my ability to even consider giving.
I am a small business owner who has begun offering my services to the charitys that I used to just write a check to. We just can’t afford to give.
I would rather update a website or trade services to another local business then just say no.
But with the economy the way it is my customers are folding faster then I can finish work that has been ordered.
Something for other businesses to think about.
Joey Starkey
The economy has had a drastic toll on peoples thinking. Many are unable to contribute and a lot of those that are able are afraid things will get worse. I suppose some of the problem is whether you look at the glass half full or half empty.
I think that twitter is not a great thing. As far as the economy, we all are watching who we give our money too.