2018 | Nonprofit Predictions
This is the fourth year I have attempted to predict the trends of the coming year. How did I do last year, and what’s next?
With a conservative Administration in place, federal grant funding is under review and constantly in threat of reduction. Still, some nonprofits have continued to do well securing federal grants. But the smart ones have also broadened their work to incorporate more private sector fundraising and partnership-building. Many have also remarked on the current Administration’s desire to push federal funding initiatives out of Washington to individual states for “local” funding and oversight.
Bitcoin and Blockchain, alternative “digital” financial vehicles, exploded in popularity in 2017. I believe this trend will continue in the coming year. For resources that will help you understand and make use of these financial tools, follow this link to the resources section of Carolyn’s Nonprofit Blog.
On another front, here in Texas I continue to see undiminished interest in crowdfunding versus traditional major gift fundraising campaigns. This means many nonprofits are attempting to turn the traditional donor pyramid upside down! But as I have cautioned before, crowdfunding requires research, planning and continuous monitoring (including well after your campaign attains its goal). Many of the same factors involved in traditional major gift campaigns are at work in crowdfunding campaigns. Still, crowdfunding is a relatively “new” approach and attractive to many.
Tracking nonprofit activities with data – and donor requests to review objective data in order to better understand the success of their donations – will continue to increase. Shown above is an Instagram taken during the Social Solutions Impact Summit conference in Austin last fall. Almost every presenter talked about the increase in donor requests for objective data. But also, many noticed that the higher the caliber of their data collection processes, the more efficient and effective their nonprofits have been in achieving their goals.
My new prediction is we will see an increase in full-time, nonprofit data management professionals going forward. To collect data well, to manage it across departments, and to continually make improvements for the benefit of the whole takes time and skill. It is a full-time pursuit. Looking for a new career? Consider General Assembly and its data science courses.
NTEN: Nonprofit Technology Network recently shared an article by Chuck Longfield for npENGAGE this fall, “New Study Monitors Dramatically Transforming Donor Behavior” (October 24, 2017). Some of my earlier nonprofit predictions are reinforced by Chuck’s article.
- “While the value of individual giving in the United States increased about 3.4% (adjusted for inflation) in the decade from 2003 to 2013, the number of public nonprofits increased 23.4% or almost 5 times the rate at which individual giving increased
- The impact of the Great Recession of 2007–2009 on the ever-expanding nonprofit sector still challenges recovery of giving to pre-recession levels
- Baby boomers, infamous disrupters of all commerce, have been dominating the prime age range of giving (45 to 64) for more than a decade.”
He suggests, “There are three fundamental objectives in raising money from individuals: keep the donors you have, increase their value to your organization over time, and recruit more donors than you lose to attrition.” Toward that end, consider using a donor data management system that specifically helps you retain donors, like Bloomerang.
But also, study the personality traits of Baby Boomers, and focus to some meaningful degree on courting them. You would be smart to do so, as they will continue to be influential in philanthropy for the next several years. Boomers tend to have a more emotional reaction to charitable needs, but be careful not to err too much in that direction because hard data is still being requested by donors of all ages, and foundations, corporations, government grant makers and professional advisors.
“Everything in moderation – that’s what I live by.”
David Gilmour, British musician
I would be remiss if I did not mention an article by Karsten Strauss for Forbes, “The Charities That Raised The Most Money Last Year” (November 1, 2017). Fidelity’s Charitable Gift Fund is at the top of the list, United Way is second, and Goldman Sachs is third. All three are intermediary grant makers through which donors can pass donations to charities. The activities of the charity recipients can then be monitored by these intermediaries.
“One trend The Chronicle notes is the popularity of donor-advised funds (DAFs), which have seen a 106% increase in contributions in the past five years. DAFs allows donors to have control over the ways in which their money is used while also affording them anonymity. They also do not carry the high overhead and administrative costs of setting up a private foundation.”
Let’s hope in the coming year, more nonprofit support organizations will offer programs about how best to build relationships with professional advisors (as well as the donors who establish DAFs). One of the earliest posts on my blog focuses on this very issue.
Having worked with several professional advisors during my career, I would suggest nonprofits claim and fully complete their GuideStar profiles, securing the gold seal, if not the platinum. GuideStar profiles are about transparency and sharing how professionally you operate. They do not require that you have raised a lot of money.
I know some professional advisors who go straight to GuideStar to review your organization online before they take the time to meet with you in person. Best to have that profile in good order, and be ready for questions. A polished profile will help your nonprofit stand out from the rest. But, less than 1% of all nonprofits in the United States take the time to claim and complete their profiles! As noted by Karsten in his article above, although we have seen more charitable donations in 2017, there are also more nonprofits than ever before. Competition for dollars is as heated as ever.
News flash! Check out DAF Direct, “DAF Direct welcomes donors to recommend grants from their donor–advised fund, also known as a DAF, directly from your website. Neither you nor your donors will incur any download or transaction fees.” Now, this is a forward-thinking invention.
For startups or small nonprofits hoping to ramp up their fundraising success, you might enjoy my recent blog post for Bloomerang, “How Startup Nonprofits Can Break Into the Big Leagues” (November, 2017). GuideStar is one of my recommendations, and you can also read two case studies about my use of and experiences with GuideStar on this website.
Here’s wishing you a successful year-end fundraising season, and a prosperous New Year.
Carolyn M. Appleton
For digital trends, be watching Kivi Leroux Miller, Nancy Schwartz and John Kenyon in the weeks and months ahead. I also urge you to join NTEN: Nonprofit Technology Network and avail yourself of the latest nptech information, training and support.