8 Trends That Will Shape Fundraising
September 12, 2012
(Derrick Feldmann is CEO of Achieve, an Indianapolis-based consulting firm that works with nonprofits.)
When I was working in development for a nonprofit, I was expected to provide my executive director with annual fundraising goals for my department -- goals that were based on donor history, prior-year results, and the likelihood that a certain number of prospects would give for the first time.
In addition to our baseline goal, we always established a stretch goal or modeled a best-case scenario for our efforts. Early in my career we never seemed to hit the stretch goal, in part because I didn't know our donors that well and because we based our predictions on what the organization needed, rather than on our donors' willingness to give.
Over time I realized that to make our stretch goal, we had to alter our approach. And so, in addition to market research and data mining, we came up with three questions to help guide our efforts.
- What is causing donors to engage with us now?
- Which fundraising approaches are still relevant and why?
- What forces will influence donor behavior in the future?
In my opinion, these three questions should be the starting point for anyone trying to determine the long-term impact of their fundraising efforts (not to mention the future of fundraising itself). Recently I had a chance to sit down and revisit the questions, and I came up with the following eight trends that I believe will shape the fundraising industry and the relationship between donors and nonprofit organizations in the future.
Increasingly, nonprofits will look at communications and fundraising through the lens of the what I call the "technology trifecta": Web, mobile, and social media. And as they do, they will test concepts across all three channels to determine the right mix for their own constituencies. Mobile will continue to gain traction as technology and mobile marketing techniques improve. Social media will open the door to better donor communication and stewardship. And the Web will be the go-to place for transparency and donor-interaction tools. Testing and experimentation across all three channels will be key to implementation. Organizations also will need to manage expectations and develop effective donor delivery methods that don't simply ape other organizations' tactics. The fundraising "shop" that doesn't align its marketing efforts with all three channels will have a hard time maintaining its position in the nonprofit marketplace.
Donors will have the ability to control how they receive communications from your organization based on personal preference and interests. Improvements in communications technology also will make it easier for nonprofits to connect with donors who seek specific information about the impact of a gift and/or an organization's health. In addition, organizations will allocate communication and marketing resources according to donor preference, rather than making assumptions about what donors want based on their content consumption.
Smaller Gifts, More Often
Donors will provide smaller gifts but will give several times over the course of the year. Organizations that provide small, impulsive gifting opportunities will be better positioned to strengthen their relationships with donors. In addition, donors will continue to drive smaller gifts toward projects where tangible results can be demonstrated.
Improved Transaction Times
Organizations will reduce the time between the giving decision and the actual transaction. One-click giving and other impulse-gifting technologies will gain in popularity. Giving will become a quick-and-easy experience that meets individuals' impulsive need to serve the greater good.
Donors Will Rate Fundraising Appeals
Thanks to the growing popularity of consumer feedback platforms such as TripAdvisor and Yelp, we will see new platforms emerge that allow donors to rate their fund-solicitation experiences and share those ratings and experiences with their friends.
Donor Loyalty Will Reign
Organizations will focus on donor loyalty rather than the size of the gift. Hard to believe, I know, but organizations will spend less time worrying about the transactional donor and will focus more time and energy on the loyal donor who attends activities/events, reads their marketing and communications materials, engages with them on social media platforms, and regularly volunteers. This kind of loyalty also will drive ongoing peer engagement and support from donor networks and force organizations to develop loyalty stewardship programs.
Crowdfunding by Donor Networks
We will see more donor networks comprised of individuals who come together around specific causes, engage in volunteerism, and/or willingly promote the activities of the causes and organizations they support. Increasingly, fundraising staff will have the capability to track these networks as well as other peer groups and use that information to leverage their resources.
Visual Impact Reporting
Organizations will move from annual reports to real-time reporting of their impact in the community. Fundraisers will become more adept at using digital communications technologies and creative design to inform donors about the impact achieved by their dollars. For their part, donors will demand such reporting.
Of course, all these predictions are just that: predictions. And even if some (or all) gain traction over the next few years, they might not affect every organization. Still, I believe that at some point all nonprofit organizations will need to incorporate many of the practices outlined above or face the prospect of falling behind, in both their fundraising and impact. The future of fundraising is about donors wanting easy and accessible opportunities to support, learn, and serve. It's up to you to get your organization ready for that future.
-- Derrick Feldmann