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10 factors that influence the future of fundraising
By Alyce Lee Stansbury, CFRE, Notes on Nonprofits
I was asked to speak to a statewide group of nonprofit CEOs about the future of fundraising. This is a daunting topic which sent me researching the newest trends, reading the latest studies and reports, and considering their impact on charitable giving, changing donor motivations, and the fundraising profession.
I also considered my experience and work with nonprofits. Here are 10 factors that will influence the future of fundraising.
1. Staff turnover
The average tenure of a fund development director in the US is 18 months and falling. This issue will impact the ability of nonprofits to sustain fundraising success. Attracting candidates to your organization will go beyond the mission to include a flexible work environment, salary, benefits, leadership, and systems, technology, and automation.
2. Generational differences
Understanding how people of every generation approach charitable giving will be critical to future fundraising success. The more nonprofits understand why and how each generation gives, the better they will be at earning donor trust. This will be critical to sustained fundraising success, especially as Millennials and Gen Z become more engaged in philanthropy.
Maintaining an accurate database will be critical for sending personalized communication, recording donor giving history, and analyzing fundraising results. Nonprofits who continually innovate by investing in technology will make giving easy, convenient, and confidential for donors and increase funds raised.
The pandemic demonstrated the critical need for nonprofits to have reserve funds and endowments which provide renewable, reliable income. The future of fundraising will include a renewed commitment to asking for gifts today to meet critical needs tomorrow.
5. Giving through donor advised funds
Donor advised funds (DAF) are the fastest growing charitable giving vehicle. Nonprofit leaders will better understand how they work and why donors use them to accomplish their charitable goals. Savvy fundraisers will make time to identify current and prospective donors who have a DAF and encourage them to recommend a grant to their organization.
6. Earning the right to ask
Younger donors prefer to research nonprofits before they give and volunteer before making a financial commitment. This means volunteerism and other forms of friend raising will be a critical first step to earning the right to ask. Fundraising plans will include opportunities for people to learn more about the organization, have greater access to decision makers, and, where appropriate, experience the mission in action.
7. CEO is chief fundraiser
Executive directors and CEOs are the face of their organization and chief fundraisers. They will have to spend more time on fundraising to build and nurture personal relationships. This will mean daily, weekly, and/or monthly touch points with current and prospective donors.
8. Bold leadership
Funders and donors of the future will expect: (a) strategic plans that set forth a bold vision to solve a problem or meet a community need; (b) CEOs who personally nurture donor relationships while building an organization worthy of support; and (c) board members who give, actively participate in the fundraising effort, and understand the funding needs in specific terms.
9. Trust based philanthropy
Trust based philanthropy is designed to alleviate the power imbalance between funders and grantees. It includes multi-year, unrestricted gifts; supporting BIPOC-led organizations; simplifying the paperwork required to apply and report outcomes; offering support beyond the check and shifting power to the community where the need exists. It is encouraging to see mega givers like MacKenzie Scott embracing this approach which will influence future philanthropists.
10. Valuing diversity
I hope advancing racial justice will remain an important issue for funders resulting in more grant dollars going to address social justice issues, and more nonprofits being led by BIPOC leaders. But this is only the beginning. Much more work will be needed to make philanthropy a more diverse, equitable force for good.
There’s no doubt the future will bring about new, advanced technologies and innovative ways to increase charitable giving. Nonprofit leaders will need to be aware of these trends while continuing to utilize reliable, ethical fundraising practices.
Notes on Nonprofits is a column in the Tallahassee Democrat produced by Alyce Lee Stansbury, CFRE, President of Stansbury Consulting, and includes resources, responses to reader questions, guest columns, and timeless topics. This column first appeared on May 8, 2023 in the Tallahassee Democrat. Please send your comments and questions.