Advancing Philanthropy

Fundraising Tools: Giving Trends Provide Guidepost for Future Plans

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In 2021, we faced another year of a global pandemic and another fundraising cycle where stakes couldn’t have been higher. With fundraising up 5.1% from 2020, raising a total of $471.44 billion, the stakes continued to be high in 2021.

As the senior account director for digital fundraising at Media Cause—a mission-driven marketing and creative agency that helps nonprofits grow and accelerate their impact—I examined some of the end-of-year trends that emerged and how it will shape fundraising plans for the remainder of the year.

Here’s what we noticed and what you and your organization might want to pay attention to in the months ahead:

Donor Acquisition: What We Noticed

On average our clients saw a 115% increase in year-over-year donor acquisition while the average gift for this new cohort dropped 16%. This is what we would expect for any client with such a sizable increase in the number of new donors. These new donors contributed to a 20% increase in the number of gifts and 25% increase in revenue for our clients. On the other hand, existing donor gifts decreased by 29% and revenue increased slightly by 6%.

Donor Acquisition: What It Means

During the height of the COVID-19 pandemic we thought a lot about what it meant to be a “COVID-era” donor: Why did they support the missions they chose to support? Did they begin their philanthropic relationship because of the pandemic? In spite of the pandemic? What about this mission inspired this gift during this time in world history?

We’re similarly reminded of this question now in the final stretch (hopefully) of the pandemic. Who are these new donors? Why this mission now?

Are they formerly donors to other nonprofits changing their philanthropic attitudes? Are they first time donors to any charity, age 28–35? Are they cisgender men (a demographic in our view that has routinely fallen short of their philanthropic responsibilities)?

No matter who they are, they represent potentially long-lasting relationships between donors and nonprofits. But if this were a romantic comedy, 2022 is Act 2—the will-they-or-won’t-they part of the story. The most important gift to acquire from any donor is the second gift. And the most important time to do it is as soon as possible. The second gift from a donor to a nonprofit vastly increases the donor lifetime value. It also increases the chance that they’ll make a third and fourth gift. There can either be a happily-ever-after ending or a one-donation-one-night-in December-stand. But nonprofits need to act—now.

  • Consider more non-fundraising-ask engagements throughout the rest of this year. Think advocacy alerts, petitions, ask-an-expert, or call-and-answer. For most nonprofits, there are many issues to talk about and engage your audience around as we move toward the 2022 midterm elections. For these types of actions, we would strongly encourage passive fundraising by way of a daisy chain—an indirect or passive method of soliciting a donation following a cultivation email, social post, or multichannel campaign.
  • Don’t quit on your sustainer program. We prefer nonprofits to roll out a sustainer drive effort immediately on the heels of their end-of-year campaign. One, these efforts look to drive donor retention and lifetime value immediately and two, target the best possible prospects for a sustaining gift: recent-one-time-donors. If this area has been challenging for your nonprofit, consider this: sustainers are 4-to-6 times more valuable to your nonprofit than one-time donors, so even if it takes 2-to-3 times the time and effort it takes to secure a one-time gift, isn’t that still worth it?
  • Recall our romantic comedy analogy. Get to know your donors and let them get to know you. Have an engagement that’s not a monologue but instead a dialogue between you and the donor. Be transparent and forthright. Be great stewards of their gift and remind donors of the impact they have on your mission.

Giving Tuesday: What We Noticed

We hear the concern every year: Why fundraise on Giving Tuesday when the inbox competition is so steep?

And we admit, this logic makes sense. But year after year, we see the same thing: the rising tide lifts all boats, and Giving Tuesday remains one of the single most important days for online fundraising. When organizations break through the noise and jockey for their slice of the pie, the rewards can be very high. Data Commons estimates that 35 million U.S. adults participated in Giving Tuesday 2021, a 6% increase over 2020, and a 37% increase since 2019. The year-over-year gains may sound small, but they nevertheless indicate strong, even growing, interest in Giving Tuesday.

In 2020, we saw unprecedented levels of giving. The fact the industry broadly topped them in 2021—despite an ill-timed stock market tumble and historic inflation—stands as strong evidence that this day’s appeal endures.

Organizations that mounted a strong campaign across email, web, and paid media kept their 2020 gains and broadly improved on them with careful segmentation, donate page testing, and compelling offers that popped in a crowded inbox.

Clients that came up short of 2020 largely changed their strategies year-over-year, reducing email volume, omitting matching gift offers, or otherwise deciding not to pursue hard fundraising at this particular moment.

Giving Tuesday: What It Means

The next Giving Tuesday is November 29, 2022 (early, again this year!) which means nonprofits will have an opportunity once again to drive November revenue year-over-year (YoY). Our clients saw an average YoY increase of 115% in new donor acquisition, with the majority of these new donors giving during the Giving Tuesday period. Gifts were more numerous during this period for most clients while average gift amounts were lower than the gifts made in the final week of the year.

This prompted a few thoughts for us:

  • Stewarding existing prospects on one’s email file from now until November will be critical to converting these supporters to donors.
  • How do people give on Giving Tuesday? Do they pick one nonprofit and give to that one? Do they spread some of their gifts across a few charities? It’ll be important to get to know these new donors in the year ahead. (More on this below).
  • Finally, and we say this every year: start planning your end of year appeal no later than August 2022: media budgets, audience treatments, campaign concepting, matching funds and more.

Paid Media: What We Noticed

On average, our clients who advertised on Facebook and Instagram saw a less than stellar return on ad spend (ROAS) of $0.14 (last click attribution). This is likely attributable to platform targeting limitations with most of the fundraising returns being generated from owned audiences. However, our clients saw an average paid search ROAS of $4.05. Our clients who also leveraged programmatic display to retarget website visitors saw a healthy ROAS of $1.09.

Paid Media: What It Means

We weren’t surprised by paid search’s outsized ROAS compared to paid Facebook and Instagram. However, we didn’t anticipate such an underwhelming ROAS for paid Facebook and Instagram. Changes to the way Meta allows advertisers to target different audiences is largely the culprit here. Going forward, this places additional importance on paid search and owned audiences. Practically for nonprofits this means four things:

  • Ensure a strong paid search program that largely focuses on serving compelling fundraising advertisements to brand search keywords and competitor search keywords.
  • Ensure a strong website retargeting paid advertising program. Owned audiences, such as an organization’s email file and Website Visitors (by way of pixel retargeting) should be the audiences that organizations prioritize advertising over Facebook and Instagram (as opposed to donor acquisition audiences).
  • Bolster your organization’s SEO game. Driving website traffic by way of the Google Ad Grant and a buttoned up organic search program will do two things: (1) bond your constituency more closely to your organization’s mission (so long as your website’s content is compelling) and (2) build your retargeting audiences for future use in paid Facebook and Instagram, as well as other programmatic display channels.
  • Change the goals of your Facebook and Instagram advertising altogether. Because of the premium on owned audiences, Facebook and Instagram might be better utilized driving awareness and site traffic, by way of compelling storytelling (think video ads that tell your organization’s story and impact). These ads should likely go in market in the run up to your standard appeal to garner a more qualified donor audience for your retargeting ads during the appeal.

Website Giving: What We Noticed

On average, our clients’ websites garnered the plurality of both revenue (40%) and total gifts (34%) compared to other channels (DM, Email, Paid Advertising).

year end fundraising trends

Once more, our clients saw an average website gift that was 58% higher than the average email gift.

Website Giving: What It Means

As we noted above, the website was even more critical to the donor experience in 2021 and will be even moreso in 2022. In addition to driving quality traffic to your website, nonprofits need to bring the quality content to the experience. It also means the broader supporter journey, from the website navigation to the final welcome series message, needs to be top-notch. It should instill confidence in your nonprofit, provide an understanding of the mission, the problem you’re addressing, the ramifications if the problem goes unaddressed, and the donor’s role in providing a solution to these problems by way of philanthropic support; all in a meaningful and compelling way.

year end fundraising trends
Average Gift x Channel

A few more parting thoughts:

Email Response Rate is a function of Email Volume

We saw that there is a sweet spot in terms of appeal volume for your end of year appeal. Too few email appeals during the end of year and your organization won’t be competitive. Too many appeals and you’ll sound repetitive and uncompelling. It’s about serving up a healthy quantity of high quality email appeals.

year end fundraising trends
Average Email Response Rate vs. Email Appeals Sent

Mid-Level Giving

On average our clients saw an increase of 25% in revenue and 20% in gifts, while existing donor gifts decreased by 29%. This suggests to us an increase in new, lower dollar donors and a leveling off of mid-level giving (from existing donors, where organizations are more likely to garner mid-level gifts). Did mid-level donors who stepped up during the height of the pandemic shy away this year? Were nonprofits too gun-shy to include mid-level prospects and donors in their broader end of year effort? This might be a moment for nonprofits to re-center their efforts around mid-level donors, being sure to provide a number of ways to make philanthropic contributions (think: planned giving, giving circles, and crypto currencies and NFT’s in your gift acceptance policy).

Old School Direct Mail

Direct mail has and will continue to play an absolutely critical role in your fundraising efforts. It might surprise you to read that as a digital-first agency, we love direct mail. Consider the experience: sifting through the direct mail notice among the other mail, setting some aside and creating a pile to read now, opening the envelope, scanning the different pieces, diving into the narrative. It’s a completely different and tremendously valuable experience in bonding a donor to a mission. Plus, we know that donors who are responsive in more than one channel become much more valuable to the nonprofit in terms of lifetime value and what it costs to renew them. Nonprofits should encourage this channel shift to drive these gains.

New School Metaverse

Speaking of other channels, can we talk about the metaverse? This will be the brave new frontier for nonprofits in the years ahead. Imagine a constituent going into the metaverse, and being able to explore a museum’s latest exhibit or hear a symphony performed by a world-class orchestra in crystal clear surround sound. Imagine exploring near-to-life virtual representations of refugee camps. We can see nonprofits of the future providing these experiences and more, allowing them to bond new and existing constituencies to their work.

Show Up And Do The Little Things

Broad year-end success in 2021 amid market chaos and historic inflation lends confidence to the durability and importance of online fundraising during end of year. Those who showed up to jockey for their share of the year-end pie found critical funds to sustain and grow their mission in the year ahead.

The coming months are unpredictable, and it’s impossible to know how external factors—think market fluctuations, inflation, and COVID news—could impact your program. But remember that it’s never wrong to cultivate, engage, and, yes, solicit your list.

Always be planning the quarter ahead with an eye to your year-end strategy! And soon, before you know it, it will be upon you, all over again.

Dan Reed, CFREDan Reed, CFRE, is senior director, fundraising at Media Cause. Since joining Media Cause in 2018, Dan has enjoyed the opportunity of working with a wide variety of nonprofits that are striving to make the world a better place. He’s been inspired on a daily basis by helping passionate clients achieve their fundraising goals. Prior to Media Cause, Dan held positions at Us TOO International Prostate Cancer Education and Support Network, the Smithsonian Institution, and World Food Program USA.

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