In Like A Lion
March 31st. It is cold and raining here in LA. So much for “in like a lion, out like a lamb.” Spring may be here, but you could have fooled me. Weather just isn't what it used to be.Change, clearly, is everywhere. Yes, even (perhaps especially) in the nonprofit sector.
At a recent training, we talked about the trends in the philanthropic landscape. We discussed things like how much harder it is to get grants now. Foundations are via invitation only—preventing newer, lesser known nonprofits from even getting a foot in the door. On the individual giving side, there was some good news—according to Giving USA, individual giving was up. But I questioned that.
When I started fundraising in the 1980’s, gifts from living individuals accounted for over 70% of the charitable pie. Today that percentage is down to 64%. And, more to the point, then—as now—charitable giving accounts for about 2% of the gross domestic product. Growth? I’m not convinced.
When I started fundraising in the 1980’s, gifts from living individuals accounted for over 70% of the charitable pie. Today that percentage is down to 64%. And, more to the point, then—as now—charitable giving accounts for about 2% of the gross domestic product. Growth? I’m not convinced.
That doesn’t mean that organizations should not focus on individuals, I think they definitely should It is the best way to ensure that you have a diverse and sustainable funding pool. But I wish that somewhere, someone was tracking those individual gifts more granularly (and if there is a place—please let me know). I’d love to know how many of those individual gifts came from mass appeals, personal solicitations, event attendance (and yes, dollars raised in the room at an event). I It would be fabulous for smaller nonprofits (and let’s face it—most of us are smaller!), to know not just how the various nonprofit sub-sectors fare, but who those dollars come from. And—even more critically— how giving breaks out size-wise. What I mean by that is are smaller nonprofits getting 64% of their funding from individuals, or is it a very different formula? Most of my clients and the people who take my workshops say yes—they are heavily tilted to foundation grants.
Moving the needle on fundraising is hard. But if your organization is to thrive, you do need to think of how to create sustainable funding streams. This generally means not being overly reliant on any one way to bring in revenue. Your pie certainly doesn’t have to look like Giving USA’s, but you should be raising funds from individuals—both living and dead—corporations, and foundations. Beyond that, you should be considering the fees you may be charging for services. Are they high enough? Competitive enough? Have you considered external threats and opportunities that may impact them?
Government funding has always been a mainstay of social service agencies. But if that isn’t you, don’t ignore the opportunities that are there. And even once you find government agencies and sources (your local government, perhaps, or funds that your elected officials can provide) how can you best leverage those?
As you think (more) broadly about possible funding sources, don’t only consider what has been, but make sure you look forward to what is on the horizon. Considering trends, therefore, is important.
Consider:
This year is a big election and given all the division, how do you get heard above the noise? More to the point, how many donors will feel compelled to make their gifts to political parties, candidates and/or voting rights organizations?
Donor Advised Funds (DAFs) are becoming the preferred giving vehicle for many. The bigger issue for small nonprofits, is many people are still putting money into DAFs, but aren’t taking the money out to benefit the sector
Transfer of wealth from Boomers to younger generations, of course, means it is time to cultivate a younger generation of donors. That may also mean less funding now.
And, of course, there is AI—no longer a gimmick, but a real fundraising tool. How can your organization leverage its power without over relying on it to be your super fundraiser?
All these and others—certainly play a part in your fundraising future. Being forward looking is not just a term but an important element of success. Too many nonprofits are guilty of thinking that what they should do is what they have done. Having blinders on may make you think that the road ahead is straight. But in my experience, it hardly ever is, and besides, who wants to miss all those delicious and often very profitable side roads?