Two months ago, we shared our 2020 giving reflections based on data available at that time. Since then, more data has been released. As promised, here is an update! Spoiler alert: Things weren’t too bad in 2020, and the future looks promising.
In Part I, we analyzed the Fundraising Effectiveness Project’s report, which looked at the timeframe from 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% of donors retained.
- First-time donor retention in 2019 was just 19.3%, but repeat donor retention (given more than once before 2020) was 59.6% in 2020. Getting an individual to make a second gift goes a long way toward improving your retention rate and your return on investment.
- Nonprofits saw an increase in 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 by 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 significant increase in donations to Human Services, while others reversed their recent trends and saw a negative change from 2019.
What COVID-19 Did Not Impact:
- Extra fundraising from March-June to support sectors impacted by the initial COVID-19 shutdown did not take away from year-end giving. Giving from October to December 2020 still accounted for over 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, which includes grants to U.S. charities made by all U.S. foundations, is predicted to decline slightly by 1% in 2021 and then grow by 8.8% in 2022.
- Corporate giving is predicted to increase by 4.3%in 2021 and 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 excellent 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 there are other avenues for raising money than traditional events. Before you fall back into your routine of past events, look at the expenses versus the amount of funds raised. Don’t forget to calculate staff time by using 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—We always recommend this (you can see the 5 buckets in the “pie” below). 2020 proved how important diversification is to nonprofits. Can you keep your doors open if one of your funding sources goes away or decreases dramatically?
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 attend our upcoming training, which will dive deeper into these trends and implications. If your team is ready to bring in a consultant to support your 2021 fundraising plan, contact us today!
