Two months ago we shared our thoughts on fundraising in 2020 based on data available at that time. Since then more data has been released, and as promised, here is an update! Spoiler alert, things weren’t too bad in 2020, and the future is looking promising.
In Part I, we analyzed the Fundraising Effectiveness Project’s report which looked at the timeframe of January 2020 to September 2020. New data shows trends continued or increased through the end of 2020. Nonprofits in 2020 experienced the following:
- The number of new donors increased by 18.5% from the previous year.
- Overall donor retention was down 4.1% from the previous year, sitting at 43.6% donors retained.
- First time donor retention in 2019 was just 19.3%, but repeat donor retention (gave more than once before 2020) was 59.6% in 2020. Getting an individual to make a second gift goes a long way to improving retention rate and your return on investment.
- Nonprofits saw an increase in the number of donors with gifts of all sizes, under $250, $250-$999, and $1,000+.
Blackbaud released their 2020 Charitable Giving Report, and the trends we saw in the first three quarters of 2020 held through the end of 2020. Overall giving increased by 2% in 2020. Medium and large nonprofits saw an increase while small nonprofits saw a decrease. This is in-line with previous years’ trends.
What COVID-19 Impacted:
- Online giving increased 21% in 2020.
- Online gifts now make up 13% of all fundraising dollars. This is a significant increase from 2019.
- 2020 giving by subsector saw a large increase in donations to Human Services while others reversed their recent trends and saw a negative change from 2019.
2020 Giving by Subsector, Blackbaud 2020 Charitable Giving Report, pg. 9
What COVID-19 Did Not Impact:
- Extra fundraising from March-June to support sectors impacted by the initial COVID-19 shut down did not take away from year-end giving. Giving from October-December 2020 still accounted for more than a third of nonprofits’ fundraising revenue.
What Does This Mean for Giving in 2021 and 2022?
Barring any setbacks with COVID-19, the Lilly Family School of Philanthropy expects giving to grow each of the next two years.
- Total giving is anticipated to rise 4.1 percent in 2021 and 5.7 percent in 2022.
- Giving by American individuals and households is predicted to increase by 6% in 2021 and by 3.9% in 2022.
- Giving by foundations is predicted to decline slightly by 1% in 2021 and then grow by 8.8% in 2022. Giving by foundations includes grants to U.S. charities made by all U.S. foundations.
- Giving by corporations is predicted to increase by 4.3%in 2021 and by 6.4% in 2022.
What Does This Mean for Your Organization?
As you look ahead at your fund development plans this year, continue to build off your good work in 2020! How did you adapt in 2020? What resonated with current and prospective donors?
We do foresee some changes necessary in your planning this year.
- Go digital – No, direct mail is not dead. But, COVID sped up the transition to online giving. Make sure your webpage is clear, inviting, and showcases a simple donate call to action.
- Evaluate your special events – 2020 proved that traditional events are not the only avenue for raising money. Before you fall back into your routine of past events, look at the expenses versus the amount of money raised. Don’t forget to calculate staff time into expenses! Revamp your messaging – Messages of urgency may have worked in 2020, but donors can suffer “compassion fatigue.” Now is the time to talk about resilience and how your nonprofit can meet the need in an optimistic tone.
- Steward your donors – It costs less to build relationships with current donors than to find new donors.
- Diversify funding streams – This is something we always recommend (you can see the 5 buckets in the “pie” below). 2020 proved how important diversification is to nonprofits. If one of your funding sources goes away or decreases dramatically, can you keep your doors open?
As always, our team at TCG is here to support your fund development needs. We have several quick resources on our blog (find fundraising specific topics here). We also invite you to join our upcoming training that will take a deeper dive into these trends and implications. If your team is ready to bring in a consultant to support your 2021 fundraising plan then contact us today!