Let the Numbers Be Your Guide

The Giving USA Foundation just released their report about charitable giving in the United States for 2018. The Annual Report on Philanthropy contains research from over a million nonprofit organizations and several thousand religious institutions. According to the report, charitable giving in the United States hit over $427 billion last year. Although this was a slight increase from 2017, when accounting for inflation, it was actually a decline – the first since 2013.

The Report shows that in 2018, 68% of charitable contributions came from individuals. Those who have not paid attention to past reports are often surprised to find out that individuals are the biggest source of support for charitable organizations. Those not involved in the charitable sector often assume that business support and grants from foundations provide a majority of an organizations income, but as you can see, donations from corporations only accounted for 5% of charitable support and foundations provided 18% of charitable support. Another 9% comes from bequests.

The report speculates that between a strong economy, a year-end stock market drop, and new tax law created a complex giving environment. Individual giving dropped dramatically from previous years. Speculation is that the change in tax law created a rise in foundation giving grew as more individuals turned giving through donor advised funds and family foundations.

So what might these numbers mean to you and your organization? When analyzing the development function of an organization, I like to compare the mix of charitable support for each organization with the statistics from the Annual Report on Philanthropy.  Every nonprofit is a little different but these figures can provide a benchmark for the level of support that your organization might receive from each source. For those organizations that do not have a well-established history of charitable support, the percentage from each source can be a guide for the allocation of resources. For example, an organization that is just beginning to raise funds might want to spend 68% of their time and resources soliciting individuals since 68% of funding comes from individuals. Since 18% comes from Foundations, organizations can spend 18% of their time writing grants. Following this logic, organizations could spend 5% of their resources seeking sponsorships and 9% of resources on planned giving. Fundraising can be an art, but it is also a science. Information like that from the Annual Report on Philanthropy should be a guide in how you execute your development function.

Tips & Tricks for Making Your Small Shop Bigger

As you are managing your donor relationships and direct appeals, and all of the other important work in maintaining a successful pace in your fundraising efforts,  identifying key strategies to grow your fund development department is critical.  Here are some “Tips and Tricks” that can help you increase your capacity and raise more money for your non-profit! Thanks to B. Michael McFarland and Jim McBride who helped in the creation of these tips.

  1. Plan your work and work your plan – ​Take the time to create a development plan: create the first draft; share with staff for input; have your development committee review; and forward to Board for approval.
  2. Clearly communicate to Board members what the non-profit is expecting of them (“what we’re counting on you for”), such as annual Board member pledge, major donor prospect names/gifts, sponsorships, sell/buy event tickets, volunteer at events, etc.
  3. Conduct a Donor Retention Analysis year-over-year; create a campaign to win back lapsed donors; can be as simple as who didn’t donate last year who donated the year before at $XX+ level, then make them your top prospects.
  4. Segment donors to create custom/tailored appeals: Top 20 or 50 donors – include number of years donating, original donation date, last gift amount, etc. Segment others by program area of interest, or geography, or lapsed donors, or professional sector, etc.
  5. Do ONE event annually and do it well.
  6. Volunteer on a grant-making committee; you will be better at writing grants once you participate in the review of grants.
  7. Create a Planned Giving Prospects List: if you have a database that allows you to pull a report on lifetime number of gifts, use that report and sort from most to least number of gifts (that’s your prospect list for soliciting planned gifts; the number of gifts an individual has made to your organization is a good indicator of their likelihood of making a planned gift).
  8. The IRS requires you send a ‘thank you’ for any gift over $250 – send one for EVERY single gift you receive, regardless of amount.
  9. TechSoup provides discounted software and hardware for qualified non-profits. A fantastic resource!
  10. Read “​Fundraising for Social Change​” by Kim Klein. 

Download the full article here!

If you are interested in taking a deeper look at your fundraising capacity, please contact me about my planning services.