What’s Ahead In Year-End Giving?

By Laurence A. Pagnoni, MPA, Michael Taylor, CFRE, Brooke Bryant, CFRE, Alison Plott, MFA, Alexa Strautmanis, Alyssa Greengrass, MA, and Evan Northup, CFRE.

Today’s blog post is a team effort as required by such an unwieldy subject: what’s ahead in year-end giving for 2022?

We seven contributors are all senior fundraisers at LAPA Fundraising, and we’ve been pondering this question since spring. You can see our bios here.

This is what we project for your 2022 year-end fundraising:

Market Volatility

We’ve been tracking market volatility, wondering what it will be like a years-end. Of note, we’re ending the year without the Federal government COVID stimulus benefits we had last year. Lacking the stimulus will negatively impact donor giving.

Perceptions about inflation will also have a negative impact.

It’s likely that givers at the high end won’t be affected by these issues – but what about mid-level and base-level donors?

We’re aware that people are falling behind on consumer debt, with inflation and without the cushions from COVID stimulus. That will impact the number of people who are able to give. That makes staying on top of individual- and major-donor cultivation all the more critical.

Email Quantity and Raising the Quality 

Since the pandemic has launched us further into digital and remote space, we’re sending and receiving more email than in prior years. Despite this increase in volume, email engagement continues to rise across industries.

In order for your organization to stand out amidst an ever-crowded inbox this year-end, creating exciting and intriguing content for your solicitations is crucial. Try out these enhancements: Utilize engaging subject lines designed to be clicked open; pose a question to readers; highlight a surprising fact in the email; and insert first names whenever possible. A higher level of digital personalization is now the norm, not the exception, so addressing your donors this way will increase your year-end giving.

Giving Has Gone High-Tech

Thanks to advances in technology, making a charitable gift has never been easier to do. Instead of relying solely on direct mail and email, nonprofits have branched out to optimize more channels for giving, like “link trees” on social media. Linktree allows you to create a personalized and customizable page that houses all the important links you want to share with your audience.

Nonprofits are also accepting new forms of gifts, such as ApplePay and Venmo options, and even cryptocurrencies like Bitcoin and Ethereum. Additionally, including a QR code on a direct-mail piece that links to your online gift form can transition your offline donors to become online donors with a scan of their smartphone. This year, implementing multiple giving channels and expanding your organization’s gifts-processing capabilities will be key to new donor growth.

Institutional Funders

Private foundations are showing great sensitivity to funding safety programs for trans gendered youth. That is so important.

Funders continue to ask deeper and more probing questions about DEI—Diversity Equity and Inclusion–since the past few years of political and social protests (and the resulting national conversations). More funders are increasing demands for accountability, data, and reporting requirements to demonstrate that DEI is placed appropriately in the work of community organizations. Funders are looking for indicators that true systemic and systematic changes are being facilitated by the organizations who should be leading change. Even federal applications have begun changing, with presidential directives, including Executive Order #13985 (Advancing Racial Equity and Support for Underserved Communities through the Federal Government) issuing guidance and priorities to focus on equity, access, and inclusivity.

Today’s fastest-growing charitable giving vehicle is the donor-advised fund (DAF). According to the National Philanthropic Trust 2021 DAF report, the number of donor-advised funds grew from 290,111 in 2016 to over a million in 2020. Your year-end plan should segment those donors with DAFs and speak directly to their needs.

Endowment Funding

Major Donors have shown an appetite to fund Endowments throughout the pandemic.

In our campaign studies we have conducted over the last 30 months we have seen a noticeable shift in donor’s interest to fund endowments.

The pandemic instilled in donors a sense of responsibility and sustainability. Endowments that were once an afterthought are now at the top of donors’ priority lists. Many donors recognize the fragility of the organizations they support; they want to ensure their favorite causes can weather the next pandemic or catastrophe.

Whether the interest in endowment will last for the long-term is unknown. We hope it will, but we also recognize that it is up to all of us to continue to make the case for financial sustainability alongside the need to advance our missions.

Special Events & Galas

Many nonprofits are rethinking what fundraising events look like, as we continue to safeguard against  COVID 19 infection. We think we’ll see some events we’ve never seen before, as organizations produce new solutions for their fall and winter galas – especially if we get another COVID 19 winter surge.

There’s no doubt that in-person special events are back! But they should be strategically scheduled so as not to interfere with year-end giving, especially during the last few weeks of the year. Also, they should be integrated with virtual events for those donors that prefer staying home.

Going forward, a hybrid of virtual and in-person events will be de rigueur.

Individual Giving

With so many global and national crises and concerns – Ukraine, China, flooding in Pakistan, inflation, wage stagnation, income inequality, food insecurity, crime, energy, and the U.S. midterm elections coming in November – we may face a challenging year-end giving season. It all depends on the relevance of your nonprofit’s mission to the global events. Why? Because donors will direct more philanthropic dollars towards political giving and organizations working to address these domestic and international crises.

Donor Research

Research indicates that donors, especially Millennials and upwardly mobile philanthropists at the initial stages of their philanthropic activities, are deeply concerned with impact. Their inclination to give will be based on the level of impact-related data an organization can provide.

Research also indicates that donors are interested in specific, actionable giving, i.e. innovative programs addressing a specific need.

We have gleaned this from research on donors to a few of our recent clients, primarily WITNESS and Baryshnikov Arts Center.

In a recent Giving USA blog post about 2022 trends, the recommendation was that we “treat donors as investors.” While this is not a new idea, it’s one that’s proving more relevant as we find ourselves approaching year-end 2022.

The online giving platform Classy published its own survey about Why America Gives and repeated several times that one of the top factors involved is a donor’s clear understanding of the specific impact their donation will have.

We suspect that as people reflect on 2022 as the year winds down, their focus will be on politics, specifically around women’s issues and local communities (as opposed to a state-wide or national focus). With so many things going on that will directly affect the next generation and the landscape they will inhabit – their safety, their rights, their liberty, their environment – many people will reflect on the world being created for the upcoming generation.

After two years of being entrenched in uncertain, unnerving, and immediate realities concerning health, the mindset will likely shift to the future and become more visionary. We shrunk inwards for a time, now horizons are again expanding rapidly. A lot of people are finding they either can’t return to what was “normal” two years ago, or care now far more about family and getting on with their lives than previously. Overall, we think our sector’s year-end fundraising, despite the backward glances and bittersweet feelings, will be the most rigorous when coupled with your strongly articulated desire to create a better future world. And hasn’t it always been so?

What do you think is ahead for year-end giving 2022? Please let us know below, and please share this post with a colleague who may find it helpful.

 

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