Fundraising Trends - Overview of Recent Literature

The following observations are based on a review of over 30 reports, websites and blogs that all addressed the future of fund development from a North American perspective.  Several of the most prominent sites are listed as links at the bottom of the post for those who want additional detail or to remain in touch with these sources.

The Fundraising Environment

• the financial environment will continue to dampen fund development returns for several years - low investment returns, diminished corporate profit, high levels of unemployment, low confidence levels of many workers
• the fundrasing environment is increasingly competitive - many more charities, with increasing evidence of need and increasing professionalism/sophistication of fund development programs
• fundraisers remain optimistic that philanthropic giving will grow
• trust in charities has been declining and will have to be regained through clear demonstration of social accountability, communication of how raised funds are deployed, and reduction in costs associated with fundraising
• we can expect to see increased regulation due to donor concern about allocation of funds, fundraising overhead and inadequate organizational accountability.

Where is the money going to come from?

• wealth is increasingly held in the hands of individuals representing visible minorities - immigrants to Canada are more likely to donate and to make larger donations than Canadians in general
• individuals continue to lead the way in major gifts and we can expect this to continue as baby boomer executives and entrepreneurs move into retirement and reposition their assets
• corporate potential is slowly being realized and will accelerate as social responsibility and accountability to the communities that corporations serve become mandatory components of business strategy - we will continue to see a shift from corporate philanthropy to cause related marketing
• social venture philanthropy will grow dramatically as successful entrepreneurs reduce work commitments, seek more engagement in their communities, and begin to look at their investments as leverage or 'social capital'
• mega foundations (e.g. Gates, Clinton) will continue to appear and retain their propensity to invest in mega solutions or organizations - not in the smaller organizations that have limited capacity but often the greatest financial need.

What fundraising techniques will be most productive?

• direct marketing will continue to produce the greatest returns from mass fundraising (excluding major gifts)
• use of sophisticated data bases to segment markets and customize asks will increase - the only way to go
• online giving will continue to expand as our understanding of how best to work with online communities increases
• social networking will be the key for many charities - working with the committed to get messages out and personalize the online ask
• there will be increased use of regular giving (e.g. monthly) given ease of transaction and the relative appeal of dedicating smaller amounts on a consistent basis
• there is immense planned giving potential - Canadians over the age of 50 represent 26% of the population, have 60% of the descretionary spending power and 75% of the personal wealth - $1 trillion will change hands through inheritance in Canada over the next 20 years
• many believe that 'gifts in kind' will be the next big wave in philanthropy - see 'In Kind Canada' and 'Gifts In Kind International'.

Shifts in Donor Interest and Behaviour

• increasingly donors want customized interaction with their charities - even relatively small donors expect you to know how often they give, what their interests are, and how they want to be contacted - we all want to be treated like major donors
• we are seeing a general shift from regular giving to general causes to an increased focus on more specific projects and initiatives that the donor believes will make a difference; from obligation-driven giving to excitement-driven giving patterns
• donors are increasingly focused on issues rather than organizations and are prepared to shift their donor allegiance rapidly if a more effective way or team can be found to make the impact they want
• smaller donors will increasingly direct their gifts to the smaller organizations that are clearly in need recognizing that larger 'charities' such as hospitals and universities are already well supported by the taxpayer, fees and the larger donor

Shifts in Overall Fund Development Strategy

• the most successful non-profits have been able to integrate philanthropy into the culture of the organization
• fund development is more information dependent than ever and open source software is permitting more organizations than ever to develop and manage data bases
• the most effective organizations are those who are donor centered and have developed an integrated, relationship based program (pyramid) - success is more about execution of the FD program than any other trend or factor
• increasingly the effective organization will be the one that communicates their belief in the 'donor as expert'
• customization is transcending mass appeals - increasingly software will be used to allow a donor to target their gift based on their personal interests and motivations
• increasingly campaigns and individual fundrasing programs will be 'generation based' - with components and approaches customized to the unique interests, values and communication requirements of each age cohort
• organizations will increasingly work together to tap into issue-focused giving - allowing the donor to determine the percentage of their gift that goes to each organization in the collective
• regular donors (e.g. monthly) will increasingly be viewed as 'members' in the organization and accorded appropriate benefits as part of ongoing stewardship strategies
• increasingly successful organizations will use people to reach people (e.g. social networking, member messaging, event invitations)
• emphasis will shift from finding donors to making your cause and organization findable - relying on search capabilities to support those with an interest
• there will be increased focus on ethics at the governance, management and development team levels - trust is increasingly the currency of success.

Sources:
http://www.the-cma.org/downloads/whitepapers/CornerstoneFileAuditWhitepaper09.pdf
http://charitymash.com/
http://www.givingtrends.com/
http://philanthromedia.org/
http://www.philanthropyjournal.org/
http://www.onphilanthropy.com/
http://www.fundraisingsuccessmag.com/
http://philanthropy.com/
http://www.kciphilanthropy.com/