The Future of Fundraising: How to Future-Proof Nonprofit Fundraising in an Uncertain Environment
Above Photo Credit: Arthur Ogleznev
Staying on top of trends gives nonprofits an advantage.
Last spring, I watched nonprofits’ anxiety and uncertainty heighten as Bill and Melinda Gates publicly announced their divorce. With more than $5 billion doled out last year alone, the Gates Foundation is the biggest giver of grant money in the world. Many feared the Gates’ divorce would result in the foundation’s dissolution, costing nonprofits critical funds and putting their missions at risk. It didn’t have to be that way.
To see the Gates Foundation close its doors would be terrifying—especially with many nonprofits still reeling from the COVID-19 pandemic, which brought a far larger period of mass indecision and setback to the nonprofit world. In August of 2020, The Washington Post reported that one in three nonprofits were in danger of permanently shuttering operations, largely because in-person events had been rendered practically extinct.
What is Future-Proofing?
No nonprofit could have foreseen the exact predicament the world would find itself in, but very few were prepared across their organization to lessen the chaos and uncertainty that often emerge hand-in-hand during a crisis. Enter future-proofing, a sure-fire way to protect your nonprofit and dodge the crossfires of calamity. Through my 33 years at the American Cancer Society (ACS), I have seen time and time again the good that future-proofing can do.
Future-proofing asks nonprofits to take the time to think beyond each fiscal year. It’s a bit like the reflections and resolutions so many of us make each New Year (though, while your New Year’s resolutions might end up down the drain, it is essential that organizations actually adhere to these commitments). I advise nonprofits to develop scenarios about what bad events might occur in the next year and ensure their organizations are prepared to handle any possibility.
We must consistently ask ourselves: What is the worst-case scenario? Could we weather that storm? Do we have the ability and internal support to pivot? And, at the same time, what are the trends? What’s happening now? When it comes to your nonprofit, it isn’t pessimistic to be strategic. Always celebrate the successes of your volunteers and staff, and empower them to experiment and keep what works well—but you cannot rest on your laurels. You must constantly push against your own programs and strategies; only then will you be able to identify any gaps and opportunities to improve your nonprofit.
As we all know, time is money. Not devoting enough time to future-proofing your nonprofit can cost you big bucks. In my experience, it is very difficult to build something that will work reliably and be long-lasting when it is constructed quickly. By thinking ahead and ensuring you have the necessary infrastructure, staff skill set, and leadership support to keep up-to-date with the way individuals purchase goods or locate information, you have shielded your nonprofit as best you can from the turbulent nature of crises. So, when circumstances threaten another large grant foundation or the next epidemic forces you to cancel your nonprofit’s in-person events, you already have in place effective ways to acquire and engage constituents and continue to fundraise.
It takes investment to build new revenue streams—both time and resources—so don’t wait until you “have to.”
Nonprofits sometimes get a bad rep for not being entrepreneurial or forward-thinking. In reality, most nonprofits have an abundance of both skill sets; they are simply confined by finite resources and a steadfast devotion to seemingly more significant efforts. I have found that every nonprofit professional takes very seriously the charge to spend as little of their donor dollars as possible so the most dollars are invested in their organization’s mission.
Some nonprofit leaders are so focused on gleaning success from strategies already in place that they unknowingly limit the effort and bandwidth necessary for innovation. Sometimes, there simply isn’t enough time in the day to think entrepreneurially.
That said, many nonprofits have begun to realize innovation is a necessary investment. In the digital age, new “it” platforms take center stage seemingly overnight and technology evolves continually. This is why future-proofing is so essential: By staying on top of the trends, nonprofits give themselves an advantage.
During my time in nonprofit leadership, I learned that entrepreneurial thinking goes hand-in-hand with future-proofing. For example, a relatively new concern in the nonprofit world is the security breaching of donor data. We once encountered a situation where fraudulent companies attempted to breach our data security and compromise donor data within our mobile fundraising app.
As nonprofit leaders buttress their organizations and prepare for these worst-case scenarios, they must ask themselves: “Are we equipped to ward off a potential attack? What will we do in the event that a phishing attempt is successful? Do we have a plan in place to adequately notify those impacted? How can we mitigate risk and still allow our organization to meet donors where they want to be?” Nonprofit leaders should gather their innovative thinkers and seek out the latest and greatest security technologies before challenges even present themselves.
Diversifying Your Sources of Donors
You don’t need to be entirely dependent on the Gates Foundations of the world. In the same way that all types of people are impacted by your cause, you should seek funding from all types of donors. A multitude of individuals are able to give only at the small, grassroots level, but they make just as much of an impact collectively as someone who writes you a $1 million check.
The power of a $25 donation is massive when multiplied by thousands of people. Similarly, a donor who gives $100 for five years may eventually leave you a bequest for $1 million. Young donors in particular may not have the means to make large gifts today, but they do have the time and interest to invest in your mission through volunteer work. One day, those young donors will become your organization’s volunteer leaders, board members, and top donors.
The Future of Giving
Here are trends to keep in mind when developing scenarios that your organization might face in the future.
Many nonprofit supporters are looking for easier, hassle-free ways to give, and those ways may not be in person. Frictionless giving allows donors to contribute to organizations solely through online channels with minimal “clicks.” This approach caters to the busy lives led by much of today’s population. While some donors undoubtedly appreciate the personal touch and face-to-face experience of events and programming, others prefer organizations that allow them to give with a single click and enjoy engaging with a community of like-minded supporters in a different way.
Nonprofits must be cognizant of the ease of experience of buying dog food on Amazon or a cute shirt from an Instagram vendor. The donors of tomorrow are members of the younger generation, and they appreciate that simplicity. Our high schoolers and college kids already function in an incredibly digitalized world. It is highly probable that their donating preferences would reflect that world.
Restricted vs. Unrestricted Giving.
Following her 2019 divorce from Amazon’s Jeff Bezos, MacKenzie Scott made headlines for her pledge to give away the majority of her $56 billion fortune during her lifetime. What I believe sets Scott apart from other philanthropists, however, is her devotion to unrestricted giving. While more and more large gift donors are strictly designating their investments out of fear of being duped or defrauded, Scott understands the value of donating to a nonprofit without mandates. If a nonprofit doesn’t have the necessary infrastructure in place to meet a donor’s spending request, the organization might find that accepting those funds does little to lessen its financial burdens and may even add unexpected costs. While restricted giving may create a program that otherwise wouldn’t have existed, it doesn’t keep the lights on, the doors open, and the website fueled for the rest of the organization. Unrestricted gifts show trust in a nonprofit and its leaders’ ability to run the organization in a way that makes the biggest impact.
Young donors in particular may not have the means to make large gifts today, but they do have the time and interest to invest in your mission through volunteer work.
Historically, when fewer nonprofits existed, giving was far less restricted and people inherently trusted organizations. Much of the shift to restricted giving stems from a relatively novel entity in the nonprofit world: variety. Fifty years ago, U.S. nonprofits consisted primarily of a small number of large, long-standing brands, such as the Salvation Army, the American Cancer Society, and the American Heart Association. Limited options made it easy for communities to see the impact of their donations. Now, instead of one animal welfare society, donors can choose from a laundry list of highly specialized organizations and support the one that best suits their personal mission.
Converting One-and-Done Donors into Lifelong Supporters.
From volunteers to constituents to supporters, nonprofits have always been about forming relationships. In my experience, even with the ease of transactional, one-and-done giving, that goal remains the same: establish strong relationships that will encourage continued involvement in your organization. Whether they give $10 or $10,000, all donors must feel appreciated and understand how and why their dollars were invested and the impact that was generated.
When you build robust relationships with your donors, you are, in a way, investing in them and their passion for your mission. They become your advocates, your spokespeople, and your public face. Donors can become more powerful than your CEO.
Of course, forming those connections isn’t always easy. As a starting point, I encourage nonprofits to ensure donors can easily access the organization’s services. If a donor develops heart disease or has a parent diagnosed with Alzheimer’s, that donor should know—with minimal effort—exactly how your nonprofit’s services will help. After all, nonprofits exist to create a safety net in communities and provide services when and where they are needed. When donors find a resource they need, they become powerful advocates for your mission with a personal understanding of how you are making a difference. There are no better spokespersons!
Next Steps for Nonprofits
After a brief window of relative normalcy this past summer, it seems that in-person events are once again being forced to pivot or cancel. We can take some small comfort in the knowledge that the pandemic has forced many nonprofits to take a hard look at the way they operate. It was undoubtedly painful, but it offered a good generational opportunity to reset for the future. This time around, nonprofit leaders can take these steps to set their organizations up for success.
The time to wait and see whether other nonprofits and government organizations are holding in-person events has come and gone. Don’t observe the go-getters from the curb; decide now what you’re going to do, stick with it, and speed down your own road to success.
Develop your ability to pivot to other forms of engagement and fundraising. Programs and strategies are like products with a life cycle. It is imperative that nonprofit leaders identify where their events are in their individual life cycle and adjust accordingly. Continue to evolve events and programming to fit the needs of your community and your constituents at a time when it’s convenient for them to give. But also keep your eye on constituents who may never seek an in-person experience: How are you identifying those supporters and giving them an opportunity to engage?
Engage in open and honest conversations with your volunteer leaders and your community leaders, and involve them in building the “new.” Future-proofing is equal parts monologue and dialogue. What are your volunteers interested in? What do they wish they could do? What do they dislike doing? The more informed your supporters and volunteers are, the more they feel that they are valued members of your organization. With that sense of belonging comes trust in your nonprofit’s decision making and embracing the future with you!
Maria Clark is the executive vice president of partnerships and chief evangelist at social fundraising platform GoodUnited. She previously spent 33 years at the American Cancer Society, leading strategy, planning and implementation for name brand events such as Relay For Life and Making Strides Against Breast Cancer.