4 Trends In Fundraising That Will Impact the Future of Philanthropy

While the needs of fundraising organizations have grown and diversified, fundraising techniques have become stale rather than evolving. Despite mounting evidence of the need for change, many organizations continue to use the same strategies to secure gifts that they have for years.

Unfortunately, as a result of rare but highly public unethical practices in the political and politics-related industries, nonprofit fundraisers today face a slew of stigma, skepticism, and mistrust. As an example of how certain 'gimmicks' leave a bad taste in everyone's mouth, the Department of Justice recently began cracking down on certain matching contributions claims.

Organizations looking to fundraise in 2021 and beyond will be unable to meet new challenges with old habits due to ongoing challenges with donor trust. Leaders and fundraisers must stay current on industry trends in order to maximize their funding and, by extension, their impact.

Here are some of the most important trends in fundraising right now, as well as what you should do about them.

1. Keep your donors happy.

So many fundraising initiatives are focused on acquiring new donors, while not enough attention is paid to those who have already demonstrated an interest. Retaining donors is one of the most efficient ways to increase funding without incurring excessive acquisition costs.

Fundraising leaders such as Dan Pallotta, Mallory Erickson, and Kivi Leroux Miller all agree on the importance of retaining existing donors. Erickson makes the point that when organizations focus on finding "Power Partners" and identifying win-win opportunities for them, donors stick around.

If your existing donor pool is correctly aligned from the start, they will indicate that they like something about your organization: your mission, your leadership, your messaging, and so on. Inquire directly about what motivates your donors. Make a phone call, send a survey, or post on community message boards. Discover why your best donors are drawn to your organization, and then lean into that alignment to maintain the relationship.

2. Exhibit transparency and grace

It's rare that fundraising is simple. You will not only struggle to complete many of your objectives, but you will also most likely make mistakes along the way. Be open and honest about problems as they arise, but don't overreact to minor blunders. Instead, be gracious, accept the lesson, and express what you will do differently the next time.

The pandemic provided numerous examples of what to do and what not to do in this regard. Consider the Centers for Disease Control and Prevention. The organization printed, then retracted, then removed a statement about how Covid-19 spreads via airborne transmission at the end of last year.

The organization's stance did not change, but it was a bad look in an already tense situation.

Maintain your focus on the mission throughout any communication about a blunder. Explain what went wrong and why, as well as your commitment to the cause and what will happen next. The best part of transparency is accountability, and staying accountable is essential for fundraising.

3. Take a step back to see what works.

You can't develop an effective fundraising strategy if you never take a step back to assess the effectiveness of your actions. Schedule time each quarter, preferably monthly, to review specific messaging campaigns, events, and other initiatives to see what worked and what didn't.

Donor Search advises tracking all of the fundamentals, such as donation volume, size, and retention rates, but also focuses on digital engagement. Leaders of fundraising organizations must be digitally savvy in a world where fundraising can happen at any time online.

Lead-tracking can be a great way to find the best new donor sources. In follow-up email campaigns and surveys, ask simple questions of event attendees. Invite them to download your organization's content or sign up for your next event. Experiment with different approaches to funneling different donor leads toward single large gifts, smaller recurring gifts, or whatever arrangement yields the highest conversion rate.

4. Get rid of your perfectionism.

Nobody gets it right the first time. But this isn't about transparency. While it is important to accept responsibility for your mistakes, it is also critical to act decisively when you have sufficient information rather than waiting until it is too late.

Have you had a potential lead on a large donor but your contact fell through? Conduct your own research and make direct contact. Do you want to try a new messaging strategy but aren't sure if the investment is worthwhile? Try it with a small test audience to see how it goes. Some of your moves will fail, but that should not deter you from trying. Perfectionism will only stifle your progress.

In 2021, fundraising occurs in bursts of opportunity. The right time is just around the corner, and fortune favors those who act before pondering all the details.

These fundraising trends arose as a result of new tools, new strategies, and new social pressures. The older, more passive methods of fundraising will be less effective in the coming months and years. Accept these changes and use these tips to secure the funding your mission requires to continue.

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