As CBS News recently reported (source below), fundraising for 2018 is down. Unfortunately, the new federal tax law that went into effect earlier this year was expected to depress donations to charities, and sure enough, that seems to be the way it’s playing out so far this year.
As noted in the CBS report in an interview with Steve Taylor, Senior Vice President of United Way Worldwide; the US operation is one of the nation’s largest charities:
“‘We know that the main reason people donate to charity is not the tax incentive… We also know that the tax incentive allows people to give a little more than they otherwise would have. that’s tens of millions of people who will give a little less, and that adds up to tens of billions of dollars less that will be donated to charity.’
“Taylor’s concerns were highlighted in a recent report released by the Fundraising Effectiveness Project (FEP), which showed that total nonprofit revenue for the first three months of the year fell 2.4% compared to 2017. The total number of donors plunged 6.3% year-over-year while the donor retention rate, which measures the number of donors who contribute to the same organization from one year to the next, fell 4.6 percent. And the number of new donors plummeted by 12 percent.”
How to stay ahead of the game
Now that you know that donations are down across the board, and perhaps you can see that the decline in donations is part of a pattern across the industry, it’s essential to stay on top of what’s happening and take action. The following are some of the things I would do if I was still the CEO of a nonprofit organization so that I don’t get caught in a situation where my team and I are unprepared for a possible decline in revenue.
- Mobile, Mobile, Mobile: Incredibly, one of the quickest and easiest things nonprofits can do hasn’t been done by many. What are you waiting for at this point? It is vital that if your charity does not have a mobile website, that this is one of the first things you do. Mobile outperforms desktop use for search. If you’re not mobile-ready, then you’re missing out on getting people to donate on your website if they’re using their phone or tablet.
- Ask your donors for support: Any good fundraiser knows that a donor supports an organization, because they were asked. And if they are asked often, many will give, often. Be strategic and smart about asking your donors for financial support, but whatever you do, ask them. If your fundraising dollars have dwindled, then create a special campaign and communicate what is in danger of being cut (ie programs) due to insufficient revenue.
- Be good at telling your story: You have to tell your story well. Period. If you don’t know how to describe it properly, then you have to learn it. Remember, the first part of the process of getting a donor to donate is capturing their emotion. When they make a rational decision to support your cause, it’s just a justification of how their heart feels. Also, when telling your story, be sure to offer prospects social proof, which is stories of other donors who have done what you ask prospects to do. People are more willing to give if they see that others are supporting their nonprofit.
- Measurement Performance: Get in the habit of chopping up your fundraising reports so you can manage fundraising properly and get everyone on your team used to the conversation. If you hold weekly meetings, make sure everyone, including junior employees and receptionists, understands where you stand with regards to your fundraising. This will foster a culture where everyone realizes they need to pitch in to help and support fundraisers. Meet with your fundraising team at least weekly, if not several times a week, and be transparent about fundraising performance.
- Keep it simple: Make your donation page, and the donation forms on every piece of collateral you use, including social media, simple. Suggest giving amounts because it will increase the probability that people will make a larger donation. For example, start your donation page with $25 instead of having no set contribution amount or a lower donation amount. Make it easy to donate and be sure to direct people to your donation, often. Don’t be afraid to experiment by asking for a specific suggested amount, like $10 a month for a year. That’s $120, which is less than the cost of a monthly pizza.
At this point, we don’t know how 2018 and nonprofit giving will pan out for years to come, but there is a definite reason, now evidence-based, why fundraising revenues will decline. That means there will be an exponential increase in competition for those dollars. You will want to be creative and think outside the box. Make sure the topic of fundraising is something that is discussed as the first order of business at most, if not all meetings, which will drive home the point that this is the lifeblood of your organization to execute your mission.
Source: CBS News
Source: Fundraising Effectiveness Project