Everyone wants to have an advantage in pursuing the strategic goals of his or her organization. Fundraising is no different; so let us take a look at what appear to be the strongest trends that will affect what we do in the next six to twelve months. In a nutshell, things are looking up, but we will potentially face both legal and demographic challenges.
1. Philanthropic giving will grow.
We are seeing a slow return to solvency for individuals, corporations, and foundations that have recouped some of their recent losses.
- Gene Tempel at the Center for Philanthropy at Indiana University in Indianapolis tells us that fundraisers are becoming increasingly optimistic. The Center’s most recent Philanthropic Giving Index was much brighter than the recent past.
- Another measure of giving—volunteerism—is also on the rise. Recent studies show that most volunteers are between 35 and 55, and women outnumber men.
- There are subtle and not so subtle signs that the economy is recovering. The stock market is up over the last few quarters, and manufacturers and retailers have ordered more goods.
- Housing starts rebounded in April to near record levels, interest rates continue at low levels—economic indicators are pointing in a favorable direction.
- One less-than-positive issue we should consider is that of corporate mergers, particularly among banks. We have lost track of all of the bank mergers and rumors of bank mergers. Mergers mean loss of local control of philanthropic dollars.
- There may be a bright spot in the national corporate brouhaha: corporations may believe that they need to do more to work with their communities in the wake of the scandals. There is also a growing corporate social responsibility agenda. But it remains to be seen how far-reaching that will be.
2. Increasing competition for the charitable dollar.
There are more askers than ever seeking the same dollar. There were only 375,000 charities less than 20 years ago. Now there are more than 850,000.
- Donors seem overwhelmed. I spoke with the president of a United Way in Alabama who told me that a donor came to him to seek counsel about what to do when so many people are asking! He actually was seeking protection from the hordes chasing after his charitable dollars.
- While the demand for services grows, there likely will be no increase in government funds. Beginning in the Reagan administration, the government has withdrawn from aspects of social service activity, putting more (or sole) responsibility on local nonprofits. State and federal funds are harder to find, and that trend probably will continue.
- Greater demand for accountability and transparency. The non-profit sector still has not recovered from its own incidences of corporate malfeasance. Those are issues of trust, and they are always very difficult to overcome. Legislators and regulators are also wondering about financial accounting in non-profit organizations in the wake of the recent for-profit scandals.
- Look for unforeseen effects of the Sarbanes-Oxley Act on issues such as non-profit board service, sponsorships, and incentives for workplace giving campaigns.
- More than ever, non-profits can’t hide overhead, fundraising, or other expenses. With the rise of the Internet and increased government (IRS) regulation, disclosure of a Form 990 happens whether we like it or not. I encourage fund development officers to be part of any organizational process for completing the 990 to be sure that it is accurate. We should not expect a business manager or auditor to know all the variables related to fundraising—we should learn them ourselves and apply them properly.
- It is important to educate donors about fundraising costs. It is not always easy to explain, but we must be clear about why it takes money to make money, following similar corporate investment principles. Discussing this issue is a good way to cultivate a donor, giving that person a sense of being an insider.
Paulette V. Maehara, CFRE, president and CEO of the Association of Fundraising Professionals, says that the nonprofit sector continues to look more and more like the corporate sector in its growing professionalism. Therefore, she believes, there will be more attempts to regulate the sector concerning improvements in accountability, including privacy and governance issues.
3. Push for greater technology capabilities.
We need to take advantage of the latest innovations with web sites, email, and interactivity. More and more donors are taking to the Internet to perform myriad tasks—making donations, reviewing our case, and checking out other organizations’ giving opportunities. We must be sure that our web pages are current and that they are marketing our organizations for both goodwill and donations.
- There is a growing interest in e-news and e-philanthropy. The Fundraising Free Press, CDS’ e-newsletter, is distributed to over 10,000 development professionals and non-profit executives.CDS President David G. Phillips is a member of the board of the ePhilanthropy Foundation, which sends its ePhilanthropy eZine to 15,000 subscribers, dealing with the cutting edge of technological and ethical debates for development.
- Nonprofits also can use internal technology to reduce costs of data entry, communications, donor relations, and take advantage of data management solutions like Blackbaud, Kintera, Convio, e-Tapestry, etc.
- Remember that e-philanthropy needs to be age-appropriate. While many seniors are on-line, they still like paper. One woman in recent experience wanted a conversation to ask questions and wanted facts on paper. The development officer kept using email. The process took a long time, and the woman—frustrated—almost gave up.
- Changing demographics of donors. Boomers are hitting 50 now. By 2020, 25 percent of the U.S. population will be over 65, and there will be an increased life expectancy.
- Aging is one aspect, but equally important is the changing face of America. The African-American and Hispanic influence is growing. Both each represent roughly 15 percent of the population—together a whopping 30 percent. Additionally, immigration from Asia, Latin America and Africa has grown tremendously. In 1960, 75 percent of immigration was from Europe. Now, it’s just 21 percent. What this all means is that wealth will move into what, up until now, has been considered minority hands.
- Do not forget the growing influence of women. More and more are working and rising to positions of significant responsibility. They are also serving causes important to them both in governance and as volunteers on other levels.
There are many trends that affect the course of the development and fundraising industries. It is up to us, as conscientious professionals, to create and lead the most ethical and productive trends, and to promulgate those principles within our organizations and among our colleagues.
Custom Development Solutions, Inc. (CDS) is among the most sought after fundraising consulting firms specializing in the strategic planning and tactical execution of capital campaigns for non-profits throughout the United States and Canada. If you have a fundraising question, please call CDS at 800-761-3833 or send an email to firstname.lastname@example.org.