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The Giving Guide: Issue 1
In today's ever-evolving world, the landscape of fundraising for nonprofits has undergone significant changes. From the rise of digital donors to the growing influence of ESG considerations, and the importance of informed philanthropy to the global impact of giving, the nonprofit sector is navigating a complex terrain. Let's explore these key trends and insights that shape the industry of fundraising.
Online Giving in Flux
One of the most noticeable shifts in recent years is the changing dynamics of online giving. M+R Benchmarks 2023 revealed that nonprofits experienced a 4% median decline in year-over-year online revenue. This decline, however, is not uniform. Disaster and international aid organizations, along with wildlife and animal welfare nonprofits, saw increases, while hunger-related nonprofits experienced sharp declines.
This overall dip is largely attributed to a 12% reduction in one-time giving. Monthly giving, on the other hand, has surged, contributing to 28% of total online revenue. Monthly donors, who contribute an average of $287 annually, have proven to be valuable for nonprofits, with a steady 63% retention rate at month No. 13.
Digital Channels and Engagement
Nonprofits have been embracing digital communication channels, with email being a prominent tool. They sent an average of 60 emails per subscriber in 2023, though email accounted for only 14% of online revenue. Mobile subscribers have increased by 11% since 2021, and social media platforms, particularly Instagram, have seen growth. However, it's important to note that desktop users still account for a significant portion of revenue.
Despite these efforts, only 19% of donation-page visitors actually made a donation, highlighting the challenges in converting engagement into tangible support.
ESG Controversy
The rise of ESG (Environmental, Social, and Governance) considerations is causing waves in the nonprofit sector. ESG criteria, which evaluate for-profit corporations based on environmental, social, and governance factors, have sparked controversy. Critics argue that ESG perpetuates "wokeism" and "cancel culture," potentially prioritizing politics over free markets. There are also concerns about the accuracy of ESG measurements.
This backlash against ESG has implications for philanthropy, particularly as philanthropic institutions become more involved in impact investing. Younger donor-investors are likely to use both their giving and investing to drive social change, leading to a convergence of philanthropy and ESG debates.
Strategic Giving
Informed philanthropy is about making purposeful and strategic giving decisions. The first step is to give with purpose, considering what impact you want to achieve. Define your approach—whether you want to support direct service organizations, capacity-building groups, or policy and advocacy organizations.
Research is crucial in this process. Online resources like Charity Navigator, BBB Wise Giving Alliance, CharityWatch, and ImpactMatters can help evaluate nonprofits. However, it's essential to go beyond online ratings by reviewing annual reports, attending events, or engaging directly with organizations.
Lastly, trust your instincts. Even if an organization looks great on paper, personal fit and alignment with your values are essential factors in choosing the right nonprofit to support.
A World of Impact
In the wake of recent global events, there's been a surge in compassion and generosity. People are increasingly inclined to make the world a better place through charitable giving. The COVID-19 pandemic underscored the importance of equitable access to healthcare and basic needs.
Global giving has gained prominence, as it allows individuals to make a significant impact, especially in developing countries where small donations can go a long way. Interestingly, only 5% of individually donated dollars from the U.S. go to international causes, highlighting the potential for growth in this area.
Well-established international charities with experience ensure donations reach those in need, making it a reliable avenue for global giving.
The landscape of fundraising for nonprofits has shifted dramatically in recent years. Digital donors, ESG considerations, informed philanthropy, and global giving have become focal points. The challenges and opportunities in these areas present a dynamic landscape that requires adaptability and strategic thinking.
As the nonprofit sector continues to evolve, understanding and harnessing these trends will be vital for organizations to thrive. Whether you're a donor, volunteer, or part of a nonprofit, staying informed and embracing change will be key to making a positive impact in the ever-changing world of philanthropy.
References/Reading material:
"Fundraising Statistics." Double the Donation, https://doublethedonation.com/nonprofit-fundraising-statistics/.
"Fundraising Trends 2023." Donorbox, https://donorbox.org/nonprofit-blog/fundraising-trends-2023/.
"Online Giving Declined Slightly in 2022, but Monthly Giving Was a Bright Spot, Report Finds." The Chronicle of Philanthropy, https://www.philanthropy.com/article/online-giving-declined-slightly-in-2022-but-monthly-giving-was-a-bright-spot-report-finds.
"How ESG Backlash Will Impact Philanthropy and Impact Investing." Giving Compass, https://givingcompass.org/article/how-esg-backlash-will-impact-philanthropy-and-impact-investing?gclid=CjwKCAjwg4SpBhAKEiwAdyLwvGcTz5AZQpTWxN0v9vlSc2DAmAVr7SKeXzEx7F8RDOYTOn8qlz5tVBoCRS8QAvD_BwE.
Putnam-Walkerly, Kris. "5 Steps to Make More Informed Charitable Giving Decisions." Forbes, https://www.forbes.com/sites/krisputnamwalkerly/2019/12/19/5-steps-to-make-more-informed-charitable-giving-decisions/?sh=6789fd1aab58.
"Introducing Racial Equity Informed Philanthropy: A Funder Resource from a Jewish Perspective." eJewish Philanthropy, https://ejewishphilanthropy.com/introducing-racial-equity-informed-philanthropy-a-funder-resource-from-a-jewish-perspective/.
"The Case for Giving Global." Charity.org, https://charity.org/give-global-blog/case-giving-global/?gclid=CjwKCAjwg4SpBhAKEiwAdyLwvDJYsAGObMjQvdzfm5VLvxFDLuY47AqE0hUGS7UlxSViBT8XZdn8ZRoC0FEQAvD_BwE.
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