Despite the growth of philanthropic giving in 2021, less than half of American households are giving—a big contrast to the two-thirds who made donations in the early 2000s. There are various reasons why giving has suffered in recent years, but without intentionality and access, this phenomenon will likely persist this year and beyond.
In this article, we will discuss the giving crisis, what it means for organizations and fundraisers, and how it’s currently being addressed.
What is the giving crisis?
The giving crisis is a decline in the number of Americans donating to organizations or participating in fundraisers.
As the statistics above show, there’s been a considerable decrease in giving rates.
One factor that contributes to this shift is that donations have become more individual-centric through crowdfunding platforms as opposed to people donating directly to nonprofits. Newer donors are also less engaged, often because organizations fail to show the ROI of the gift, which decreases their likelihood of giving again. Higher living costs have also had a significant impact on household budgets. With rising inflation rates, it’s no surprise that people are allocating more of their budget to basic needs rather than giving.
What the giving crisis means for organizations
Many discussions around the decreasing rates of philanthropic giving are heavily focused on the doom and gloom this crisis will bring to fundraising.
While organizations may be affected by this, it doesn’t spell the end of philanthropy. Proactive action must be taken to ensure the giving spirit is reinvigorated and nurtured, rather than panicking or spreading fear-mongering information to fundraisers and donors. Organizations should make changes to accommodate these new ways and levels of giving, emphasizing donor engagement and encouraging donors to come back and make an even bigger impact.
How to revive giving once more
Build a stewardship program that is even stronger than your acquisition program.
Too many organizations spend more time acquiring new donors than taking care of those who have already given. This creates a revolving door of donors that must be constantly replenished. And, because it takes numerous touches for a donor to become a major or campaign donor, there is little chance to build an effective moves management program.
Instead, focus on donor retention by building a stewardship program that is intentional. Celebrate donors’ newness during their first year. Upon renewal, encourage them to become monthly donors so they connect with—and receive thanks from—you and the organization more often. Prioritize major donor prospects and develop a special personalized communications plan. More donor retention ideas can be found here.
Incorporate mid-level donors into MGO portfolios.
Major gifts officers, as their title suggests, focus primarily on major donors. In today’s age of the mega giver, it’s tempting to focus on the handful of donors who will make those seven- and eight-figure gifts. This doesn’t mean, however, that they can’t build their pipeline with mid-level donors.
Instead, wealth screen your top 250 donors. Look for donors with high affinity who are giving below capacity. Incorporate these donors into major donor portfolios and start expanding outreach efforts. By treating the mid-level donor like a major donor, they are more likely to become one.
Partner with the broader community.
In addition to donors, nonprofits can partner with other organizations and individuals to expand their reach and help minimize the effects of the giving crisis. Some professionals, including social workers, are at the forefront of issues affected by many fundraising drives. They facilitate significant change by using their knowledge and skills to create, develop, and promote programs designed to help individuals or groups struggling with socioeconomic issues. By bringing awareness to specific problems, developing trust with current and potential donors, and connecting the community, they can foster positive social impact and connect donors’ passions with programs. By reaching out to these key people, organizations can reach a wider network in their community—who may offer all forms of support, not just financial, and expand the donor base.
Focus on the heart.
Philanthropic giving may seem to be in peril, and worries regarding the economy and inflation’s impact on it are not uncommon. However, those aren’t the only factors that play into fundraising. Even in times of crisis, such as what was experienced during the pandemic, people have given regardless of the circumstances. Though the idea of less than half of American households giving to organizations seems bleak, the fact that charitable giving reached a record-breaking $471 billion in 2020 is still something to be excited about, especially considering the health and social issues on the rise during that year. Despite issues currently faced by communities and individuals, it’s clear that the drive to give is not dead.
Even amidst current troubles, organizations can increase the contributions they receive by remembering that generosity comes from the heart of donors. As fundraisers, we may stray from that ideal, focusing only on the numbers without consideration of the donors behind the giving. A reframing of perspectives needs to be made. Concentrate on reaching out to donors’ interests and passions, then encourage them to give in their own way and capacity can appeal to their spirit of generosity.
About the Author
Rayssa Jillian is a freelance business consultant and writer. Her love for writing has allowed her to share her thoughts and knowledge on topics she is passionate about, such as business, finance, and community-building advocacies. In her free time, she volunteers as a youth coach at local community centers.