Did you know that despite economic challenges, Americans donated approximately $499.33 billion to charitable causes in 2023? This is amazing news for community leaders and nonprofits alike. Since donor trends are radically changing fundraising, organizations in Miami County need to stay up-to-date to get funding for important education and youth programs.
Corporate giving in 2022 reached $29.48 billion, a 3.4% increase from the previous year. Additionally, Donor-advised funds (DAFs) have grown significantly, with $23 billion in grants and 3.5 million distributed in 2023. This goes against the idea that DAF owners hold onto their money.
Monthly giving also saw an 11% increase, accounting for nearly a third of all online donations. This shift towards sustained donor engagement over one-time contributions mirrors a new direction in donor behavior.
These are just a few of the emerging trends for the coming years. Spotting them can help you test new funding sources and techniques, not just to raise more money but to invest in a more promising future for Miami County.
A Look at Some Nonprofit Fundraising Trends
Building trust is the foundation of successful donor relationships. Being authentic and transparent in your communication will make your donors happier and more likely to stick around. This is the first of several critical fundraising trends worth knowing for the next decade.
Donor trends cover a wide range of factors that influence how nonprofits connect with their supporters. These include the communication channels used, global events, donors’ age, and the overall context in which they live and give. Personal values, emotional connections, backgrounds, and temporary situations like the economy and politics can also affect donors’ decisions.
Below are the latest nonprofit fundraising trends you should know about.
Trust as a leading value
“Trust between donors and organizations sometimes resembles that of a long-time couple,” says Daniel H. Lanteigne, a philanthropy professional and Vice President of Talent, Strategy, and Impact at BNP Philanthropic Performance. “There is undoubtedly great respect, yet at times, a certain lack of communication. Communication needs to be authentic, even vulnerable, so that trust can either be maintained or, in some cases, built.”
Effective communication must be authentic and transparent to build and maintain trust. Studies confirm that transparent practices lead to higher donor satisfaction and retention rates.
Decline in the number of donors
Overall charitable giving has held steady, but the number of individual donors has been dropping year after year.
For example, taxfiler data reveals that the percentage of Canadians making charitable donations declined from 23.4% in 2010 to 17.7% in 2021. Additionally, survey data shows that 82% of Canadians contributed to charitable organizations a decade ago, which has now dropped to 60% in 2023.
GivingTuesday, 2023 report
As a result, nonprofits are increasingly dependent on a smaller group of donors who give larger amounts.
Raise video content
Platforms like TikTok and Instagram Reels have become must-have tools. They help nonprofits educate, entertain, and get more people to support their cause.
Research shows that video content can boost engagement by up to 80%. This is especially true for younger donors, who respond better to visual and dynamic content compared to traditional text-based approaches.
For this reason, nonprofits that want to reach and engage more people, especially the younger crowd, need to invest in creating killer video content.
Online giving by Millennials and Gen Z
Millennials and Gen Z are becoming the mainstream for online giving. Over the past three years, online donations have jumped by 42%. This shows that younger people prefer to donate digitally.
Mobile giving has also increased by 28%, highlighting the need for mobile-friendly donation platforms and digital engagement strategies.
Advanced fundraising technology
Nonprofits are using more advanced technology to improve communication with donors, personalize their experience, and keep them engaged over the long run.
For example, linking a donor database (CRM) with online donation processing can increase data accuracy by 60% and make donors 25% more likely to give again. Automated marketing tools help create personalized email campaigns with 82% higher open rates than generic emails.
Additionally, email-based marketing and promotional campaigns generate around 28% of all online nonprofit revenue, and for every 1,000 fundraising emails sent, nonprofits raise an average of $90.
Social media, another crucial component, inspires 32% of donors to give, making it the top channel for donor inspiration, followed by email at 30% and websites at 17%.
Importance of donor metrics
Nonprofit organizations need easy-to-use dashboards that quickly show important donor data. Tools like Google Looker Studio let executives track key performance indicators (KPIs) for planning, reporting, and accountability, boosting fundraising efficiency by 31%.
Nonprofits can monitor things like donor retention rates, average donation size, and campaign effectiveness in real-time. For example, the average donor retention rate for nonprofits is around 45%, and the average donation was $737 in 2020.
These tools also make it easier to segment data so nonprofits can personalize their outreach. Knowing that social media inspires 32% of donors can help target campaigns on specific platforms like Facebook or TikTok.
By adapting to these trends, nonprofits can ensure sustained growth and deeper engagement with their supporters.
Join us in shaping a better tomorrow for Miami County. Your support is more than just a donation. It’s an investment in our community.
Other Philanthropy Trends Shaping the Work of Nonprofits
As philanthropy trends continue to evolve, nonprofits must stay attuned to the latest donor trends and shifts in charitable giving to remain effective and impactful.
These trends influence how organizations engage with supporters, allocate resources, and pursue their missions.
- Dreaming big: Nonprofits should aim high and dream big, even as they work to address pressing needs. Pursuing ambitious, large-scale goals can help organizations access more funding opportunities. Major donors and philanthropic groups tend to invest more in projects that promise significant social impact.
Research indicates that nonprofits pursuing bold, far-reaching objectives saw their major donations increase by an average of 25% compared to those with more modest targets. These ambitious projects often involve multi-million dollar campaigns focused on tackling deep-rooted challenges like poverty, educational inequity, and climate change.
- Changing cause: Experts have noticed a shift in how donors use their money. These days, more people are giving to international aid, climate change efforts, and support for Black and Indigenous communities.
For instance, relief efforts in Ukraine and Gaza have received a lot of donations, showing that people are more aware of global crises and want to help.
GivingTuesday, 2023 report
Climate change is also a big priority for donors now. The Ivey Foundation is investing $100 million to fight climate change by 2027, and the Walmart Foundation is investing $20 million to support equity for Black and Indigenous Canadians.
We’re also seeing more donations go towards reconciliation with Indigenous communities. TD Bank is pledging $5 million to support these important initiatives.
- Evolution of Corporate Social Responsibility (CSR): Corporations increasingly integrate CSR into their business models, contributing financial resources and volunteer time to social causes. This trend is driven by consumer demand for corporate accountability and the desire of employees to work for socially responsible companies.
Corporate giving reached $29.48 billion in 2023, a 3.4% increase from the previous year, showcasing the potential of corporate partnerships in boosting fundraising efforts. Companies are also focusing on sustainability and ethical practices, aligning their philanthropic efforts with their corporate values to create a positive impact on society and the environment.
- Impact and ethics of AI: As we mentioned, AI has significant potential benefits. For instance, AI can enhance donor segmentation, allowing for more targeted and effective outreach. Personalized engagement through AI-driven insights can significantly improve donor retention rates, which currently hover around 45% across the sector.
However, ethical considerations must guide AI implementation. Nonprofits must ensure that AI algorithms are transparent and free from biases that could affect donor trust. Protecting donor privacy and using data responsibly is critical to maintaining ethical standards in AI use.
- Hiring challenges: Hiring fundraisers has become increasingly difficult for nonprofits, a challenge intensified by the COVID-19 pandemic. Many fundraisers have left the sector, while others seek remote work, creating a competitive job market.
Before the pandemic, interim fundraisers were a minor part of staffing, but now they constitute about 30% of placement business. Salary competition is a significant barrier, with 72.2% of nonprofits citing it as a primary issue. Additionally, 66.3% face budget constraints, and 50.2% deal with stress and burnout among staff. Issues with government grants and contracts impact 20.6% of organizations, and childcare unavailability affects 14.6%, complicating hiring further.
- Increased focus on equity and inclusion: This includes supporting initiatives that advance racial equity, gender equality, and social justice. Programs addressing systemic inequalities are receiving more attention and funding, reflecting a broader commitment to creating inclusive and equitable societies.
- Influencer philanthropy: Influencers play a significant role in mobilizing resources for various causes. Their ability to reach large audiences quickly makes them valuable partners for fundraising campaigns and advocacy efforts. By taking advantage of the reach and credibility of influencers, nonprofits can raise awareness and funds more effectively. Influencer-driven campaigns often engage younger audiences, making them a powerful tool for modern philanthropy.
- Donor anonymity and transparency: While some donors prefer to remain anonymous, there is a growing demand for transparency in philanthropic activities. Nonprofits must navigate these preferences carefully to maintain donor trust and comply with regulatory requirements.
- The rise of Donor-Advised Funds (DAFs): DAFs have become increasingly popular, allowing donors to make flexible and tax-efficient contributions. In 2023, DAFs distributed $23 billion in grants, indicating their significant impact on the nonprofit sector. DAFs enable donors to set aside funds for charitable giving and decide later which organizations to support, providing a new approach to philanthropy that can lead to substantial contributions over time.
By dreaming big and setting ambitious goals, adapting to changing causes, embracing corporate social responsibility, and harnessing the power of AI in ethical ways, nonprofits can keep up with fundraising trends and improve donor relations over time.
Addressing hiring challenges, focusing on equity and inclusion, and utilizing influencer philanthropy and donor-advised funds can provide new avenues for growth and sustainability.
Donor Trends: Conclusion
Understanding donor trends can help nonprofits improve their relationships with donors, tailor their campaigns, and develop a new, modern approach to fundraising.
Moreover, addressing hiring challenges, focusing on equity and inclusion, and utilizing influencer philanthropy and donor-advised funds will open new avenues for growth and sustainability.
Are you interested in learning more about how you can support impactful community projects? Reach out with any questions you may have. Your involvement can transform lives and significantly improve our community. Your donation is more than just financial support—it’s an investment in a better future for Miami County.