Podcast | Tips for 2022 Fundraising and Beyond
We recently sat down with our Senior Vice President of Insights, Analytics, and Experience, Matthew Mielcarek, to break down a few of the big ideas and highlights from the 2022 Pursuant Giving Outlook.
In our annual Pursuant Giving Outlook, we compiled the best industry knowledge, data, and statistics on things like:
- Current market conditions and potential pitfalls
- Nonprofit sector trends and industry benchmarks
- New opportunities for growing your donor base
The economy and giving behaviors are not always predictable—so what reliable data we have is invaluable. And while there are many sources of data on the nonprofit sector available, they can be highly editorialized, limited to a single channel, or might even be out of date.
Our goal with the Pursuant Giving Outlook is to provide a primary source that gives a complete picture of the industry landscape. The publication is our best shot at delivering nonprofit professionals a glimpse into an industry “crystal ball,” where they can see the state of things today, what to expect for the future, and most importantly, how to prepare.
2021 Predictions: What came true and what didn’t?
How did our predictions for 2021 turn out? Did our expectations turn into reality?
The answer is: somewhat.
We predicted that 2021 would be a year of growth as we moved past the immediate emergency of the global pandemic—a year of resumption.
However, it turns out that the growth was not without friction. Unpredictable situations like the conflict in Ukraine, new strains of the COVID-19 virus, and the ongoing struggles with the supply chain continued to plague the economy.
In 2021, we found the GDP was on pace to grow more than 6% (4% higher than pre-pandemic figures). Consumer spending was up 7%. In the charitable sector, overall online fundraising revenue was up at 32% (about triple the previous annual giving rate). 2021-2022 giving was expected to be higher than 40-year historical averages.
Even though these predictions were based on the best available data, the biggest curveball affecting the fundraising landscape was the sharp rise in consumer prices.
2022 finds that prices are higher than ever for essentials like gas, rent, and food. These cost-of-living price hikes lead to cuts in non-essential spending—like charitable giving. The daily strain on donor wallets is the most significant factor to which nonprofit organizations will have to respond.
The inflation rate in 2021 was about 7%. But a study by Giving USA reported that giving only grew about 4%. That is meaningful growth but not significant enough to offset this rise in inflation and other economic factors.
The Fundraising Effectiveness Project reports that in Q1 of 2022, there was a sizeable decrease of 20% in giving from newly-retained donors. Loyal donors, however, did donate higher amounts. Why the discrepancy between new donors and existing donors?
The answer is likely that the nonprofit sector will witness a “whiplash” effect after the crisis-induced giving boost in 2021. The sharp drop in new donors is a natural falling off because of the charity boom brought on by the pandemic. This, coupled with the suffering economy, has had a major impact on the giving power we’re seeing from newer donors.
Another theory is that some organizations may have softened their fundraising approach because of the boon of new donors gained because of the pandemic. Other organizations whose missions weren’t affected by the pandemic may have been compelled to put their causes on the back burner so as not to sound tone deaf during a critical crisis.
What is happening in 2022 and beyond?
As 2022 hurries toward its end, the post-pandemic rebounding is still in effect. There are, however, distinctions in the level of rebound that are also apparent by giving vertical. The sectors hit the hardest during the early pandemic have the most considerable rebound in growth.
For instance, arts, culture, and humanities causes were among the most brutally hit in the early pandemic. Now, this sector has grown around 20% during 2021-2022. The public society benefit sector (organizations like the ACLU) also grew giving by over 20%. This growth looks positive, but it’s really a rebound from a tough couple of years.
Organizations have also seen a marked decrease in direct mail appeal response rates. The question is: is this a sign of a recession or simply bad donor sentiment?
Well…it’s complicated. We see more of a philanthropic behavior shift, not a sign of recession. Nonprofit organizations have seen a recent boost in average gift size—indicative of a return to the usual trend line when you take pandemic crisis donors out of the equation. Donor retention is also slipping a bit, down about 10 percent—but the newly retained donors are the ones falling away most.
Tips for the Future
Given all of these factors, many nonprofit organizations are focusing on the year’s end, shoring up campaigns for the remainder of the year, and looking towards Q1 of 2023. As they tighten up these strategies, here are tips:
- What are potential growth strategies? We at Pursuant are constantly working with clients to answer that vital question.
- Where do you stand today? Take stock and measure your donor files and constituency. Who are potential donors? Look at wealth and giving capacity to identify prospects.
- Organizations can segment and use modeling to determine which segments of their donor universe can drive growth. For instance, organizations can identify those who might be in a place to give smaller monthly recurring gifts monthly as distinguished from donors with a high capacity.
- Use an effective data tool The GivingDNA Platform is an accessible, independent resource that organizations can use to gather some of this valuable information to refine their fundraising growth strategies. Contact us today to schedule a demo to learn how to reach your year-end goals using GivingDNA and the agency’s other expert services.
Download the Pursuant Giving Outlook eBook and watch the webinar on-demand