But most say overall 2018 fundraising is the same or better than last year’s.
What a year 2018 was here in the USA. It started with a lot of nonprofit professionals and boards scared that the new charitable deduction would hurt giving. As the year went on, others worried about the tariffs and their impact on the economy and specific donors’ businesses. Then came the wild fluctuations of the stock market in December, causing donors to reconsider year-end giving.
As the dust settles on 2018 and nonprofits begin to close their books, we wondered, “Was all the worry warranted?” So we launched a 90-second survey to find out. It asked how overall fundraising was compared to 2017’s, specifically how December’s fundraising was compared to December 2017, and if people that the tax law was helpful or harmful to their fundraising.
Sent to the subscribers of our fundraising coaching emails and leadership coaching emaillists, as well as shared through social media, the sample was a relatively small 178 respondees. But the results are interesting to look at. The following is the findings in this survey followed by some interpretation of the results. Hopefully these findings will help you as you work to understand your 2018 fundraising results.
The first question was about overall 2018 fundraising results. Of those located in the USA, about two-thirds reported their fundraising for the year was the same as or better than, last year. The results were:
- Lower – 35%
- About the same – 18%
- Better – 47%
While 92% of answers were from within the USA, it might be helpful to look at the international responses. These were: lower – 36%, same – 7%, better – 57%.
The response shifted a dramatically when fundraising was focused on December. Practically a reverse of the numbers above. Almost half of responses from the USA said their December 2018 fundraising was the worse than last year. The breakdown is:
- Lower – 48%
- About the same – 17%
- Better – 35%
For nonprofits outside of the USA, the responses were: lower – 21%, same – 21%, better 58%. Interestingly, over one quarter of nonprofits in this group said December 2018 fundraising was “significantly better” than the prior year.
What Does This All Mean?
So why such a dramatic shift in December results? The comments that came with these responses suggested some interesting themes.
Lower Retention – Higher Average Gifts: Multiple nonprofits reported that while their dollars raised stayed the same, their number of donors dropped. Often dramatically. At least two nonprofits said they had half as many donors but still raised the same amount of money. Perhaps these nonprofits are getting better at asking for larger gifts. But this drastic drop in retention should be a major concern.
December 2017 was abnormal: Many nonprofits experienced a higher than normal level of giving in 2017. Donors unclear on the implications of the new tax law chose to give more generous gifts creating a spike in giving. Some of the responses on the survey indicated that, while December 2018 giving was lower than December 2017, it was on par with December 2016. So perhaps December giving was stabilizing. (Although, at least two nonprofits saw their December 2018 giving drop by about 50%.)
Tax law unclarity continues: While 39% of the USA responses said the new tax code was hurt their fundraising. Many nonprofits left comments that donors were advised by their accountants to skip giving this year in favor of “bundling” their gifts next year. But a full 59% said that it had no impact on their fundraising. These comments shared that their donors were more interested in the impact of their gift than the tax deductibility.
Politics continues to shift giving: Another trend in the results was nonprofits being told by donors that all their giving was focusing toward mid-term election campaigns. It will be important for nonprofits to follow up with each of these donors to re-engage them in this coming off year.
Rough waters ahead
These themes point to some rough waters ahead. Especially when combining the drop in donors with the prospect accountants and financial planners encouraging donors to “bundle” their giving. Since most nonprofit communications systems are tied to donations, this could mean that donors who didn’t give this year will hear less from the nonprofits they’ve historically supported. Or they’ll be treated more like first-time donors with “acquisition” appeals than trusted supporters. These donors run an higher than normal risk of permanently dropping the nonprofit from their philanthropic giving priorities.
And if bundling becomes the norm, nonprofits will need to consciously work harder than ever at retaining donors. We are suggest nonprofits adjust their communications in two ways.
- Nonprofits should get better at showing donors the impact of their giving. Based on survey comments, nonprofits indicated that better storytelling increased their fundraising results. Showing donors the impact of their giving helped across all gift ranges. And likely protects the nonprofit from the affects of politics and tax code changes. As one nonprofit stated, “If we’re not raising funds, it’s because of a lack of compelling story, not tax laws.”
- Nonprofits need to review their normal donor communications and budgeting systems. If donors are going to shift to giving every other year, nonprofits will need to figure out how they’ll disburse the funds. Will they use half for this year’s operating and hold the other half in reserve for next year? Executive Directors and boards will have to be careful of unrealistically raising fundraising goals mistaking a donor’s doubled gift as a new level of annual giving. Nonprofits that currently celebrate “consecutive years” of giving will have to decide if giving two years worth of gifts every other year still counts as “consecutive.” (Odds are, the donor will think it does.)
And nonprofits will have to create donor communications systems that are effective at showing donors their impact powerfully enough to keep donors engaged over these much longer two-year spans. A number of nonprofits reported very poor results with their “lapsed donor” campaigns. So it’s more critical than ever to keep these donors from becoming lapsed.
Fundraising effectiveness is always a moving target. Hopefully nonprofits will be able to use these challenges to get better at communicating the powerful impact donors have. The good news? Paying attention to these suggestions for stewarding donors will help your fundraising no matter what the economy does!
How was your 2018 fundraising? What trends are you seeing? Tell us in the comments below.
And for how board members can help with fundraising, check out 21 Ways for Board Members to Help With Their Nonprofit’s Fundraising at https://fundraisingcoach.com/board-fundraising/