After several years in the nonprofit sector – and having watched the effects of recent economic challenges on nonprofit organizations – I would advise the following. I made some of the same predictions in 2012, 2013 and 2014. That information is found after “New Themes.”
New Themes on the Horizon for 2015
- The use of Bitcoin in philanthropy bears more consideration. Here in Austin, Texas we revived our NTEN 501 Tech Club, and we have been meeting at Capital Factory (follow the link to find 501 Tech Clubs in other cities). Here is a recording of our Bitcoin discussion, featuring David Neff and Jacob Parks (October, 2014). Also, see my Fundraising Resources section for articles devoted to Bitcoin. For a start, read Sir Richard Branson, “How Digital Currency Could Change the World.”
- While not an entirely new theme, I feel compelled to mention that while private investors including foundations continue to experience income growth as stock market performance has improved, competition for grants remains fierce. There are more nonprofits seeking funding, and they have become more savvy about securing support. While many of the large nonprofit and educational institutions continue to exceed fundraising goals (and they have large staffs and are adept at marketing and communicating), the broad base of nonprofit organizations are not experiencing a great deal of increased donations. My view from the trenches indicates this will continue. Update: you might enjoy reading NPQ, “Do the Fruits of Philanthropy Now Fall More Closer Than Ever to the Tree” (March 25, 2015).
- But here is a fairly new issue I hope our nation and the world will tackle: let’s convince donors to lose their fear of investing in small, innovative and oftentimes more effective nonprofits. I pose a challenge to Boomers in #2030NOW on LinkedIn. It is also true that more people of all ages need to be educated and inspired to give. Especially they need to be taught about the importance of giving when they are younger. An example of this kind of program may be found in Austin’s Girls Giving Grants. More of these efforts are needed in the years ahead.
- The urgent need to respond to critical world challenges like Ebola eradication and natural disasters mean a great deal of charitable dollars have been – and will continue to be – channeled to those issues, and rightly so. What this means for the rest of the nonprofit sector remains to be seen.
- “New Study Shows Record-Setting Wealth Gap” by Eric Justian for TriplePundit (December 24, 2014) suggests nonprofits should invest more in major gift fundraising and in broad-based crowdfunding. In addition, Michael Anft writes for The Chronicle of Philanthropy, “Fundraisers Who Use Academic Research Do Better” (December 23, 204). The importance of honing-down one’s prospect list to the very best candidates (focus) makes sense. This is discussed on this blog in some detail (see my primary articles).
- Be watching Instagram, Tumblr and Pinterest, platforms growing in use quickly. Facebook continues to be a mainstay for nonprofits, and Boomers use it quite often nowadays (this age group also has the greatest charitable giving potential). Other social platforms continue to develop and offer attractive new features. In the case of all “social” communications, visual imagery and video continue to increase in popularity. Becoming savvy about using visual imagery and video should remain a top priority for nonprofit organizations (see my article “Video to the Rescue” for numerous links, as well as, “Visual Blogging”).
- On the major gift front, many continue to rely upon the old-fashioned “giving pyramid” as a guide for campaign strategy and development. While still helpful, new ideas are being used successfully like crowdfunding (discussed below), and what I call “equal share” giving. This simply means a group of capable major gift donors are asked to give the same amount ($1 million each), for more of a “block” than a “pyramid” strategy. Always remember: a significant gift to you may be insignificant to others. Gift size is relative. Donors at larger levels do not always wish to stand on top of nonprofit-devised “pyramids,” smiles. But they do wish to contribute to the greater good.
Below you will find additional themes discussed for the prior three years. Thank you for visiting!
Updated December 24, 2014
Nonprofits should continue to pursue donations from traditional sources as always. However, I suspect this will not be enough for nonprofits to fully meet the needs ahead. New ideas should be investigated. If you can, reduce your dependence upon government funding and enhance your private sector fundraising activities.
From the National Council on Nonprofits comes, “2014 Nonprofit Trends to Watch,” and an insightful observation:
“The dramatic decline in government funding often increases demand for services, as communities and individuals continue to struggle and look to nonprofits to provide basic services. In 2013, more than half of nonprofits surveyed by the Nonprofit Finance Fund reported they didn’t expect to have enough resources to meet increased community needs. The upward spiral of need for basic services is likely only to increase in 2014, while the resources that nonprofits have available to them will continue to be squeezed.”
In addition, be sure to take good care of your existing donors, so they do not stray from your nonprofit. Polish your stewardship and retention efforts!
On a personal note, here in Austin during the Mayoral debates in fall, 2014, several candidates pointed to the need to work more closely with charities and to both encourage more giving by the regional population, and to engage philanthropists in solving some of the city’s most pressing problems. I believe this is a national trend worth watching.
Follow-up (May, 2015): I have been enjoying U.S. Trust’s Capital Market Outlook reports. Follow the link to the May 18 report, and a discussion about the continued reduction in federal funding for research, which U.S. Trust believes could hurt American innovation.
Boston College has published, “Wealth Transfer to Boost Charitable Giving Through 2061” (June, 2014).
“Despite the trend toward lifetime giving, it is both realistic and valuable for charities to remain encouraged about the potential for bequests. Charities should take whatever steps possible to obtain their share of the projected bequests and to expand the amount of bequests and, for that matter, all giving beyond our predictions.”
I couldn’t agree more. And, you might consider investing in cost-effective, professional systems to manage your planned giving programs, ones that incorporate social media (like Crescendo Interactive, Inc. and The Stelter Company – and Tony Martignetti also pointed me to Sharpe Group as another helpful resource).
My personal experience is that there are legal aspects to planned giving about which nonprofits should be mindful. If you cannot hire a planned giving professional (or a legal expert), the above-referenced planned giving systems work exceedingly efficiently. They keep up with current laws, which do change on occasion, and inform those considering bequests to understand all the options and to make wise decisions.
The “Silver Tsunami” is upon us ~ the (charitably-inclined) “Boomer” generation is retiring in droves! If you have any doubts about that fact, see this infographic from Live Science (April 30, 2012). You might also enjoy Bloomberg’s infographic, “Preparing For the Mature Consumer Boom” (September 17, 2013).
Last but not least, please read Blackbaud’s report, “The Next Generation of American Giving” (2013). “Boomers contribute 43% of all giving.” Enough said. Older generations are also using social media in greater numbers (see Pew Research Internet Project’s “Social Media Update 2014”).
More development of broad-based social media and mobile campaigns make sense, whereby many people make smaller gifts to attain large goals (again, professional assistance and/or careful advance research is advised; I would not “try this at home” without it).
I also enjoyed this article by Rebecca J. Rosen for The Atlantic a couple of years ago, which indicated early-on the steamroller that crowdfunding has now become, “Kickstarter Expects To Provide More Funding for the Arts This Year (February, 2012). For sound advice, you might read Erin Morgan Gore and Breanna DiGiammarino for Stanford Social Innovation Review, “Crowdfunding for Nonprofits” (May, 2014).
There are several crowdfunding platforms available today, but you might enjoy, “2014: Kickstarter by the Numbers” for a better sense of how important crowdfunding has become.
While tried-and-true fundraising methods should continue to be employed, new ideas should be welcomed. A concept that bears more consideration is that of “charity lotteries.” Highly successful in Europe, when given a new cast as noted on my WordPress article, the negativity common associated with American lotteries could be discarded. I have heard seasoned nonprofit fundraising executives put lotteries down. But if some of the European examples are studied closely, one discovers that lotteries can be a great boon to high quality nonprofit projects.
I also refer to you my Tumblr for a write-up about the United Postcode Lotteries with a link to a very inspiring video!
Last but not least, I urge nonprofit professionals not to fear new technologies but to take the time to learn and adopt their use. They can make your nonprofit more lean, efficient and effective, plus, learning new techniques can strengthen your personal career skills. Join NTEN: Nonprofit Technology Network, for instance, which provides a wealth of assistance in this regard.
This article has been excerpted as a slide presentation on SlideShare.
I posted this quotation on the second page of my blog post, “Economy and Philanthropy,” and I wanted to share it again on my “predictions” page. New developments and innovative fundraising strategies are more important today than ever – let’s encourage creativity in this arena and try new ideas:
“Since new developments are the products of a creative mind, we must therefore stimulate and encourage that type of mind in every way possible.”
~ George Washington Carver (1864-1943)
Amy Sample Ward, CEO of NTEN quoted a colleague, “People need to innovate like they need to breathe” (September 20, 2013). I couldn’t agree more.
As an aside, I have several colleagues who are experts at writing government grant proposals, and who are rightly proud of their work. During the joint Grant Professionals Association (GPA)-CharityChannel Summit 2011 in Las Vegas, more than one distinguished plenary speaker encouraged those attending to develop their private sector fundraising skills and not to rely so heavily on government grants (for my presentation, see SlideShare). This is still a top issue for nonprofit organizations.
If you are one of those grant writers who believe there will be no reduction in government funding for nonprofit partnerships and initiatives, you might want to read, “Charities Helping Struggling States Make Welfare Payments” on Huffington Post Business.
I was interested to read The Detroit News, “Now is the time to restore democracy to the people,” which discusses the role of philanthropists in the emergence of the City of Detroit from bankruptcy (November 7, 2014). “The grand bargain required state legislation and includes $195 million from the state and $466 million from foundations, corporations and private donors. Rhodes said the grand bargain ‘borders on the miraculous.’ The grand bargain will pump the equivalent of $816 million into the city’s pension funds over the next 20 years through contributions made by private foundations, state taxpayers and private donors to the DIA.”
Doug Donovan wrote for The Chronicle of Philanthropy, “Money Woes Plague Charities Struggling to Meet Demand” (March 25, 2013). “‘The challenge that many organizations face is that this is the fifth year of increased demands,’ said Antony Bugg-Levine, chief executive of Nonprofit Finance Fund. ‘There’s a sense that they have moved from drowning to treading water,’ he said. ‘It’s a sense of hunkering down and surviving as opposed to real indications that organizations have been able to turn the corner and been able to thrive.’”
Maria Di Mento in The Chronicle of Philanthropy (October 3, 2012) also notes, “Most Wealthy Donors Predict Flat Giving Till 2017.” This would indicate a more broad-based approach to fundraising over the course of the next few years would be prudent. I believe this is still true as I write in 2015. Things are improving but it will take more time.
Thomas A. McLaughlin of The Nonprofit Times posted, “Big Bird Whacking, Cuts and Inflation” (December 3, 2012).
“It seems all but certain that categorical federal funding reductions are on the way. A public budgeting memo from federal authorities warned executive branch agencies to expect fund reductions of 5 percent in FY 2013. Another memo for FY 2014 pointed to 8 percent across-the-board reductions in domestic spending, and 9 percent reductions in defense.”
Thomas provides some helpful advice about tracking the proposed cuts (and other changes), and I highly recommend nonprofit executives keep this article for future reference.
Tyler Kingkade of The Huffington Post notes, “Fiscal Cliff Threatens Research Funding, Education Grants, Leaving College Presidents Worried” (November 15, 2012). One would hope these educational institutions are now busy expanding and strengthening their private sector fundraising capabilities.
Testimony by Vinsen Faris, CFRE of Meals on Wheels (Johnson and Ellis Counties) before the U.S. House Ways and Means Committee on February 14, 2013 is also eye-opening. Faris points to the increased demand for services, state and local budget cuts, higher costs for food and transportation, and fewer and smaller private donations as issues of concern for his – and other – nonprofit service organizations. Thanks to colleague James R. Holcomb, CFRE of Fort Worth for sharing this important documentation with me.
I enjoyed this article by Richard Morris in The Guardian’s FundraisingHub section, regarding nonprofit giving in the U.K., “Is Traditional Fundraising Outdated?” (December 5, 2012). There are some lessons to be learned in the U.S. from this discussion.
“My challenge is to engage some of the larger charities that are still blocked by this single-minded ‘return on investment’ thinking. The sector must get better at understanding that supporters want to help, not just assuage their conscience by dropping a coin in a tin. The focus should be on attracting supporters who want to get involved and enabling them to give in multiple ways to best suit their needs. The philosophy of encouraging people to give little and often is certainly a concept worth greater consideration as, in the words of one of our 400+ participating retailers, ‘every little helps.'”
Last but not least, Rick Cohen wrote for Nonprofit Quarterly (NPQ), “Government Funding or Philanthropy: What’s Better for Society?” (April 2, 2013). “Walker’s argument is rooted in the idea that giving to government (i.e., taxation) is for the sake of government while giving for charity is for the people. Of course, government is supposed to exist to benefit people, too. Charitable giving goes to 501(c)(3) nonprofits, which also are supposed to benefit people. However, Walker implies that government is some how less direct and more alien to people than the nonprofit sector.”