Nonprofit donations in the United States have been declining for years across all demographics, including among people ages fifty-one to sixty years, the traditional funding bedrock. Nonprofit fundraising officers are struggling to report positive news to the board of directors whose only interest appears to be immediate results, even for brand-new campaigns. Faced with a pressing burden, they tend to focus on “the sure thing”: major donors to make up for the overall decline in donations. For now, this strategy is working, but experts question whether this is sustainable.
Of course, there are other problems when a donor base is whittled down in that an NPO is placing its faith and its future on a handful of people when they might want to consider broader community or national support. Large gifts also tend to come with strings attached which may limit an organization’s autonomy because they fear losing the support of major donors. Such a focus also ignores the years invested in building a relationship between an NPO and a major donor. Very rarely does a major donor appear out of thin air and drop an eleven million dollar gift in an NPO’s lap. It is possible that today’s $10, $50, or $500 donor will become tomorrow’s million dollar donation but not without careful cultivation of the relationship.
The nonprofit world is already a difficult industry with signs that it is only going to face more challenges as time goes on. More competing issues. Fewer available dollars. Disappearing donors. When organizations make their three- and five-year plans, they should consider multiple sources of revenue in moves that may require flexibility and experimentation. It is all but impossible for NPOs to think about diversification and risk-taking while in panic mode trying to secure revenue sources, yet many experts believe this is the only way organizations will be able to survive.
Some NPOs have started or continued actively cultivating and stewarding midlevel donors in targeted revenue-raising campaigns. The evidence suggests this is sound thinking, as shaky as new campaigns can be. While midlevel donors account for only one percent of the donor pool, they comprise one-third of gifts. Careful stewardship may one day move a midlevel donor to a major donor as many philanthropic studies show. There is a whole movement in the nonprofit world to take advantage of an often neglected group of donors.
Nontraditional fundraising seems to be a pathway to sustainability. A group of PBS stations found success in transferring a method from politics to the NPO fundraising world: door-to-door canvassing. Using data and a scientific method of selecting neighborhoods to canvass, hired fundraisers successfully grew the PBS donor pool and found thousands of people willing to give recurring donations. Although it was an expensive strategy to try, the payoff for these stations has been huge. They are entering their seventh successful year of this practice and are seeking to expand the canvassing process. It is this type of forward thinking that NPOs may need to employ to ensure long-term sustainability.
Another thought for NPO fundraising is to seek to cultivate a donor base that is more reflective of the diversity of the country. It is no secret that the world of philanthropy is overwhelmingly white. A 2015 study revealed that ninety percent of board chairs, eighty percent of boards, and eighty-nine percent of CEOs are white. This homogeneity tends to create and reinforce an insular nonprofit world. As such, many NPOs might not know where to begin to recruit more donors of color. Perhaps a good start would be with the basics, such as actively engaging with people of color to find out where their priorities lie and what they would like to see in the future for the organization or the organization’s cause as a whole. Active recruitment of people of color into the NPO itself should also be a priority. Diverse backgrounds yield diverse perspectives and ideas, maybe even the fundraising stroke of genius that provides a steady revenue stream for years to come.
Most of the articles on the issue of the disappearing donor suggest that NPOs better take the initiative sooner rather than later. People currently in the prime of their donation years belong to Generation X, the generation with the fewest members. Crowdfunding is supplanting traditional methods of donation, funneling money directly to a person rather than a helping organization. If current studies are correct, the country is becoming less and less religious which often means donations to charity decline as well. The pace of change is accelerating and with it the pace of change in the fundraising landscape for NPOs. To survive far into the future, NPOs will have to change their way of thinking and strategic planning.