Charitable giving by American individuals, estates, foundations and corporations increased 12.2 percent over two years in 2014 and 2015 (the largest two-year increase since 2003-2005). Today’s Americans, in fact, give one billion dollars per day in their efforts to assist others, accounting for $373.25 billion in 2015.
According to the Giving USA 2016 report, total contributions from individuals — including donor-advised funds, family foundations and planned gifts — equaled 87 percent of all charitable giving in 2015. But what does that mean to corporate executives sitting on nonprofit boards? What does it mean that contributions to almost all nonprofit sectors rose in 2015 (see “Who Received” graphic)?
While the report certainly contains news worthy of celebration, it also means:
- Nonprofits should not rest easy. Economic health spurs philanthropic growth. In other words, as the economy improves, giving increases. So, too, do the number of new nonprofits — even in light of recent trends toward partnerships, alliances and consolidation. While that growth may not rise significantly (though it could), competition for philanthropic dollars will continue to increase. The savvy nonprofit knows it must continue with assertive and forward-thinking approaches to its fundraising operations, especially since competitors are, themselves, becoming increasingly sophisticated in their fundraising operations.
- Nonprofits should stay the course. Fundraising strategies should maintain a focus on the individual, with relationship-building at the heart. Even one-time transactional gifts — those spurred by a natural disaster, or by a friend who encourages a first-time donor to participate in a charity run/walk, or even an impersonal online gift — provide opportunities to build long-term relationships. Donors want to be acknowledged and thanked, and with appreciation often increase their loyalty and giving.
Fundraising Strategy amid Economic and Philanthropic Growth
With nearly 1.2 million U.S. nonprofits competing for the same philanthropic dollars, the most competitive nonprofits understand that they must:
- Heighten their brand, visibility and marketing efforts. Organizations that can articulate their case for support — Why us? Why now? Why should the donor care? Why should the donor invest? — are positioned for greater fundraising success.
- Take a holistic approach to fundraising. Varied strategies work. When working with individuals, consider online transactions, social media, direct mail, special fundraising events, leadership annual giving programs and membership societies, and major and planned gifts. When working with corporations, seek philanthropic gifts, sponsorships, in-kind gifts and even volunteers. The most successful nonprofits target individuals, corporations and foundations in a holistic approach.
- Retain donors. It is far less expensive to retain donors than to constantly seek new ones. For every 100 new donors gained by the typical nonprofit, 96 other donors lapse. Overall donor retention held steady last year at 46 percent. Relationship-building is one of the most prized skills of successful fundraisers.
While this year’s report is definite cause for celebration, especially as donors moved back to their giving priorities pre-recession, most nonprofits would agree there is still much work to do to move their organizations toward success.
Richard Tollefson is president of The Phoenix Philanthropy Group, an Arizona-based international consulting firm serving nonprofit organizations as well as institutional and individual philanthropists. As the only member of the Giving Institute in the Southwest, Tollefson’s organization has conducted Giving USA preview events in Arizona, Nevada and California, as well as online webinars through the Social Venture Partners International Network. Research and writing of the Giving USA report is conducted by Indiana University’s Lilly Family School of Philanthropy in partnership with Giving USA Foundation and the Giving Institute.