The latest GivingUSA numbers are out. And the numbers aren’t pretty.
Yes, the USA recorded over $499 billion was given from non-government sources last year. But the trend of fewer individuals giving accelerated. Individuals gave a 64% of the total – still the lion share of all giving – but a drastic drop from last year.
Are people less generous?
Does this mean people are less generous? Not necessarily. It’s easy to assume that people are less giving now. And that inflations in the economy is forcing people to be less generous.
But this data doesn’t include the money giving on GoFundMe’s and other, non-itemized, non-tax deductible giving.
According to the Nonprofit Times article:
“More troubling is when these numbers are paired with earlier research from the Lilly School that showed just 5.4% of American believe they had a personal interaction with a nonprofit – despite more than 10% of the population working at a nonprofit and tens of millions of people involved with organizations…”
One of the telling quotes in the article was from Chris Pitcher, CEO of fundraising firm RKD Group:
“Not enough people are being moved to contribute – because our practices perpetuate talking at them, not talking with them or listening to them,” said Pritcher. “As a sector, we have to change…”
That’s why it is imperative nonprofit leaders learn how to talk to donors more effectively.
For decades talking “at” donors has been “good enough” for the sector to get by. Sure, the return rates on that kind of fundraising were awful. But if nonprofits inflicted “talking at” materials to a large enough group of people, they could at least pay their bills.
But there are many more ways people can align with their values now. Rather than only having the option of giving to a nonprofit, now they can buy products or participate in activities that stand for the same values.
It’s not distracting us from the mission
Whether we like it or not, when we start a nonprofit, we commit to being funded by a community of people who don’t understand the work we do. That’s how the tax structure is in the United States. A board of individuals directs the nonprofit. And a group of people, companies, and foundations fund it.
To complain about having to learn to talk to donors is like a store owner complaining about having to learn to talk to customers. Store owners need to learn where to advertise and how to communicate and relate to customers in ways that encourage them to keep coming back. If the nonprofit cause is as important to nonprofit leaders as they say it is, nonprofit leaders need to learn to communicate effectively with donors.
- Not because donors are better.
- Not because nonprofits should exist to serve donors.
- Not because donors should direct our nonprofit’s mission.
- Not because donors are self-centered and egotistical.
Nonprofit leaders need to learn to effectively communicate with donors because nonprofit staffs deserve to get paid. And nonprofit causes deserve to be funded.
If our cause involves using donated funds, then learning exactly what to say to donors is not a distraction from our work. It’s part of the work.
As the Lily School’s Dr. Una Osili says in the article:
“The Giving USA results should be a bit of a reminder or maybe a nudge if not a direct catalyst for a lot of folks around the philanthropic sector to recognize and think about the importance of engagement and building those authentic relationships,” said Osili.
It’s not about focusing exclusively on rich people
While there are definitely incredibly large gifts represented in the “individual” category, it is better for a nonprofit to have a diversity of donors. Too often, nonprofit leaders and boards try to reach “rich” people. People in their community or in the nation that are wealthy. But an exclusive focus on wealthy people can put a nonprofit on very shaky financial ground. When on donor changes her focus, the nonprofit’s entire budget could be put at risk.
We ignore or take for granted our donors at our own peril. Fundraising opportunity exists with donors of all gift sizes. And the tools exist for even the smallest nonprofits to be more personal with donors. It doesn’t take much more effort than writing a letter or making a phone call. The hardest part is usually pushing through an awkwardness similar to learning to speak in a new dialect.
This work is worth it. The benefits of having relationships with donors include: more consistent funding, more engaged advocates for your nonprofit, and a better qualified pool of potential board members.
As you get better communicating with donors, you’ll get less distracted by people who seem obviously able to give “major” gifts. In fact, you may find yourself paying more attention to donors of all levels. For example, many of our nonprofit clients get smaller gifts from donors through donor advised funds. Rather than thinking of a person as a “small” donor, it may do well to treat them as an interested individual.
For example, the article says that:
According to the most recent data from the National Philanthropic Trust, $72.67 billion was deposited into DAFs and $45.74 billion was granted during 2021. The average DAF account was $183,842.
That means that $26.93 billion dollars put into donor advised funds (DAFs) last year wasn’t yet given out. Could your nonprofit use some of that money? It may well be sitting in the accounts of donors you’ve classified as “small.”
Is fundraising getting harder?
Not necessarily. But it is requiring more intentionality.
Nonprofits can no longer get by with crappy messaging or self-entitled assumptivism. Throughout history, human beings have been generous to one another. If your organization relies on donations, the good news is human beings still are generous.
And the opportunity is ripe for nonprofit who genuinely build relationships with donors.