Fundraising Takeaways from 2015

(2015 takeaway: Millennials are the next great giving generation, and they donate via mobile technology.)

After 5 straight years of growth in the fundraising world (2014 topped previous records, pulling in $358.38 billion in philanthropic dollars, and 2015 will likely be even bigger), things are looking good for nonprofits.

The sector has risen from the financial disaster of 2007 faster than other industries. Nonprofits are becoming more adept at deploying technology and reaching the digital marketplace. And, to top it off, #GivingTuesday has changed the game, infusing the holiday season – long overshadowed by the rampant consumerism promoted by days like Black Friday and Cyber Monday – with a philanthropic spirit.

This last component – #GivingTuesday – is also having a huge impact on how nonprofits organize their fundraising calendars. Combined with the increased significance that millennials possess as a charitable demographic, there are a couple key takeaways from last year that will better position nonprofits to thrive in 2016.

While year-end giving has always carried great weight – setting up fundraisers with the bulk of their annual revenue – December’s importance has shifted heavily to #GivingTuesday. With the day’s skyrocketing popularity, it is fast becoming a competitive flashpoint for organizations looking to secure their financial situation going into the new year.

An unintended consequence of #GivingTuesday may be tapped giving. As more and more charitable individuals (including millennials, who are more likely to give small amounts online) make gifts on #GivingTuesday, they may be less responsive to appeals later in the month. This means that the fundraising potential of December may be shifting to the beginning of the month, requiring nonprofits to refocus their strategies and energies in order to finish the year off with a bang.

Another essential area where nonprofits need to pay attention is millennial giving. Defying predictions that the generation would be self-absorbed, millennials are displaying great philanthropic character. In 2014, 84 percent of millennial employees donated to a company cause. Of those that didn’t donate through work, 78 percent donated on their own. For #GivingTuesday 2015, one out of every three millennials in the United States were projected to participate in some capacity.

It’s evident that millennials give. But how to solicit their gifts? They value simplicity and transparency. It is absolutely essential for nonprofits to adapt to mobile giving strategies and digital infrastructures, meeting their desired audience’s attention where it is being directed – namely, on smart phones. Furthermore, nonprofits need to be clear about how solicited money will be used. Millennials need to see the impact they are making. Visualize operations through graphics and video, and quantitatively explain the difference that donors are making.

While the forecast is good for fundraisers, it is essential that they keep on their toes in order to keep a head up on competition. Following these trends will, in part, aid in those efforts.

#GivingTuesday 2015: A Roaring Success

For the fourth consecutive year, #GivingTuesday grew big-time. On December 1, donors from 71 countries stepped up and gave generously to tens of thousands of nonprofit organizations in what has certainly become an established annual day of charitable action during the holiday season.

Based on aggregate numbers from dozens of digital donation processors, participating nonprofits raised more than $115 million. The previous year’s total was around $46 million.

Blackbaud – the largest processor of online donations – waived regular administrative fees for the day, helping to optimize the impact of dollars raised. Nonprofits deployed a number of strategies to raise funds. Matching gifts – a very traditional strategy – have proven efficient in encouraging large volumes of small contributions on #GivingTuesday.

Although they did not attribute their announcement to #GivingTuesday 2015, Facebook Founder and CEO Mark Zuckerberg and his wife Priscilla Chan announced on December 1 that they would give away 99 percent of their Facebook company stock over their lifetime, amounting to $45 billion in charity. While the couple’s gargantuan gift has raised some concerns, some analysts credit the move as taking #GivingTuesday to the next level.

Success stories for this year abound. For the second year in a row, Seton Hall University has proven adept on this ascendent day of giving. Raising $34,000 during its inaugural year of #GivingTuesday participation in 2014, the school attracted more than $450,000 this year. Maryland nonprofits collectively raised more than $6 million.

In a truly astonishing display of fundraising prowess, the Sikh Coalition leveraged matching gifts to raise more than $127,000 to fuel its volunteer programs.

There are a number of fascinating details from this year’s #GivingTuesday that provide clues that will not only help nonprofits succeed next year, but will also help organizations take advantage of online donor trends anytime. The average gift for 2015 was $174.83, a 29 percent increase from the preceding year. Underscoring the importance of responsive website designs and cross-platform digital infrastructure, mobile giving accounted for 35 percent of this year’s donations, compared to 30 percent in 2015 and 24 percent in 2013. Additionally, in keeping with ongoing research on the philanthropic spirit of Generation Y, one-third of millennials were projected to participate in #GivingTuesday 2015.

Over the coming months, Key Elements Group LLC will provide ongoing coverage on the results and successes of #GivingTuesday 2015 as they emerge. Fundraising professionals would do well to follow these stories in order to begin constructing strategies for next year. If there is one thing that these early statistics and trends show, it is that #GivingTuesday is not only here to stay, but is also likely to become a foundational component to any successful year-end giving campaign.

Fundraising Essentials: Mobile Giving

Earlier this month, Paypal announced its 2014 charitable giving statistics. If there is one thing that the numbers tell us, it’s that donors are moving toward mobile devices as their preferred means of digital giving.

Paypal – an online payment service – saw a 50 percent overall increase in year-end giving, totaling $212 million in donations. #GivingTuesday had its best year since its founding in 2012. Donors gave 66 percent more than they did through Paypal the previous #GivingTuesday, and mobile giving leaped an astonishing 101 percent.

The trend in mobile spending is not unique to nonprofits. On Black Friday this year, retailers witnessed a 62 percent increase in Paypal purchases made through mobile devices.

The biggest reason for this development is that mobile giving is extraordinarily easy. Revolutionizing during the tragic earthquake in Haiti, nonprofits adapted text-based donations into their campaigns with great success. By simply responding to or sending text messages, donors could send gifts in response to ongoing events completely hassle-free.

Political campaigns took the strategy one step further during the 2012 presidential election. Campaigns stored their donors’ credit card information, soliciting funds via emails that allowed repeat donors to merely click a giving level to immediately send a gift.

Mobile fundraising simultaneously taps into the immediate psychological gratification that derives from charitable giving, while also satisfying consumers’ ever-growing preference for convenient, streamlined, and user-friendly digital designs that simplify financial transactions.

Take tipping at restaurants and cafes, where a similar trend has emerged. Tipping has increased due largely to the intuitive design of iPad checkouts, through which a click of a button enables the consumer to tip without experiencing any interruption to flow of the transaction

Advancements in computer technology have driven the size of consumer electronics down, while greatly increasing their capability and utility. In thirty years, we’ve seen seen the arc of technological progress span between the release of the household desktop to this year’s highly anticipated iWatch.

Consumer behavior – part catalyst for this rapid change, but itself molded and affected by technological progress – now evolves at a quicker rate than ever before. Keeping track of this evolution is essential market-watching for fundraising professionals.

As Donor Behavior Shifts Online, Salvation Army Struggles to Raise Funds

The last few years have seen tremendous growth in philanthropic fundraising, as the economy slowly but surely emerges from the recession. Recent figures indicate that nonprofits raised $335.17 billion in 2013, a 4.4 percent increase from the previous year. This amounted to a 22 percent increase in charitable giving since 2009 (the year many analysts consider the official end of the recession).

With falling oil prices and 2014’s widely publicized online giving campaigns, this year should follow the growth trend. On #GivingTuesday alone, donors contributed a sizable $45.7 million, heralding the start of a new, lucrative tradition, and perhaps showing early signs of improving consumer confidence as energy costs begin stabilizing at low levels.

Not all nonprofits are feeling the love, however.

The Salvation Army’s red kettle fundraisers – stationed outside of retail outlets around the country – are a cultural staple of the giving season. The jingling bells and friendly volunteers remind gift-hunting consumers that there is more to the holidays than materialism. But this fundraising strategy is proving less effective than ever before, as Salvation Army chapters across the United States struggle to meet their fundraising goals.

Programs from Upstate New York to Kansas, Missouri to Wisconsin, and Iowa to North Dakota are falling far behind their goals. Some Salvation Army efforts have raised as little as 50 percent of their targets as they enter the final days of the holiday season.

So why are the red kettles empty? Specialists point to the shift in donor behavior toward internet-based donations. The online giving trend emerged in early 2012, when analysts noted a 14 percent leap in online fundraising from the previous year.

Web-based fundraising has a number of benefits. Development professionals and data analysts can comb social media and advocacy forums to find particularly vocal or committed prospective donors. Web-based monthly donations are also an easy sell, offering streamlined and paper-free subscription services that simplify the giving process.

Indeed, scores of the most impactful fundraising initiatives these days are only actionable on the internet, as evidenced by the wild success of the ALS bucket challenge. Friends and family members challenged each other using social media, exercising an effective, digital brand of peer pressure to solicit over $100 million in donations.

Another huge component to the digital transformation of U.S. giving behavior? Millennials.

Young adults are more likely to consider themselves philanthropists, with 26 percent of them self-designating as such as opposed to only 18 percent of baby boomers. The growing generosity of millennials goes hand-in-hand with recent fundraising developments on social media, where younger demographics are disproportionately represented compared to other age groups.

Salvation Army volunteers may be getting the snub because donor behavior is shifting solidly in the direction of online charity, as younger generations of donors become increasingly habituated to digital fundraising and other prospective donors have already been tapped by social media campaigns and other online nonprofit initiatives.

Consumer spending also appears to play an important role in Salvation Army’s troubles. Retailers had a slow start this year, with lackluster figures for Black Friday and a growing number of consumers shopping online. With fewer people walking in and out of stores, there are fewer prospective donors. The biggest shopping day of the year, however, is just around the corner, and perhaps a late surge in shopper confidence will help fill the empty red kettles.

But the needy are already feeling the effects of Salvation Army’s poor performance. In Elgin, Illinois, families lined up outside the area-Salvation Army headquarters to receive food stuffs for the holidays. Many were turned away empty-handed. One of the staff commented that it “was sad to see the need but even sadder to watch all the food dwindle away as the line of those seeking help grew shorter, then turning those in need away due to the lack of our food donations.”

No nonprofit wants its operations to shrink, especially one providing basic needs. If traditional means of fundraising are no longer sufficient to meet the same demand for its services, Salvation Army should look to expand its methods and strategies for 2015, exploring the possibilities of online fundraising and integrating with new charitable institutions such as #GivingTuesday.

#GivingTuesday’s Big Impact on Philanthropy

The optimistic projections were correct—#GivingTuesday was a roaring success, as non-profits across the globe successfully raised millions of dollars.

The Lilly Family School of Philanthropy at Indiana University plans to release a comprehensive report in the coming months. The Case Foundation has given an initial fundraising estimate at $45.7 million, indicating a 63 percent increase in overall revenue from 2013.

Jean Case—CEO of the Case Foundation—commented on the numbers: “Just as Cyber Monday and Black Friday are key indicators of consumer sentiment and economic health, this data on #GivingTuesday can serve as an indicator of the health of our giving economy.”

Where #GivingTuesday has grown, the consumer-oriented days surrounding it have suffered. On Black Friday, sales were down 11.3 percent from last year, and Cyber Monday sales were up a paltry 8 percent.

Non-profits who made out on #GivingTuesday can—in part—credit the ALS bucket challenge for their success. For the first time, a social media campaign attracted a broad array of demographics to get behind a unifying message, thereby raising millions of dollars. Having happened within the last year, this likely prepared social media users for #GivingTuesday. The ALS challenge habitualized the online community to charitable giving. Inculcating this habit has evidently paid off, creating a receptive class of online donors.

This year, #GivingTuesday also attracted more participating organizations than ever before. Over 20,000 non-profit organizations partnered up, a significant increase from the original 2,500 that participated in 2012.

That kind of momentum is big. As more organizations participate, the more institutionalized and recognized #GivingTuesday will become. Indeed, the social media-oriented event may well become the single most lucrative day for non-profits annually.

Philanthropists and organizations participated in numerous ways. In what may become a reoccurring fundraising strategy, Seton Hall University synthesized a traditional fundraising model with #GivingTuesday-style online crowd-sourcing. An anonymous donor pledged $100,000 if small donors matched the amount. The school exceeded the donor’s goal, raising $415,000 by the end of the #GivingTuesday challenge.

#GivingTuesday is also attracting prominent spokespersons. Ed Norton is no stranger to fundraising. The famous actor began a for-profit fundraising platform called CrowdRise in 2009. He integrated #GivingTuesday into his website, and offered his thoughts on what the day means and how his company chose to participate: “People like to see and feel that they’ve been a part of something big, and so we wanted to create a campaign that shows the collective impact of giving on Giving Tuesday.”

The campaign he refers to is the CrowdRise Giving Tower, an app that allows users to “see the world’s charitable efforts grow in the form of a tower made in augmented and virtual reality.” The app works by creating a visual representation of global charitable fundraising, stacking bricks higher as more money is raised in an interactive digital art piece. As groups develop new virtual assets around #GivingTuesday, they place greater stock and investment in the day itself, endowing it with greater financial significance.

The international character of #GivingTuesday was in full view this year. Over 68 countries participated. From Argentina to Singapore, Spain to Israel, people across the world engaged online, donating to their favorite charities and spreading the message of giving. There were over 32.7 million Twitter impressions, and 698,600 hashtag mentions.

This grand scope heralds an even bigger, more successful year to come in 2015.

An Alternative to Black Friday, #GivingTuesday

Gearing up for December 2, organizers for #GivingTuesday expect to double their reach with twice as many participants as last year.

Conceptualized in October 2012 by the 92nd Street Y in New York City, #GivingTuesday was meant to serve as a counterbalance to the consumer-oriented days around Thanksgiving time—Black Friday and Cyber Monday. Instead of focusing on material goods, the day encourages people to give back, or to spend money on alternative gifts such as donations made on friends and family members’ behalf.

The amount of money given during #GivingTuesday has doubled every year since 2012. Last year helped raise $27 million for nonprofits. From 2012 to 2013, the number of participating non-profits expanded threefold from 2,5000 to 7,000.

The hashtag for #GivingTuesday is trending well. Google Analytics show that interest in the day has doubled since last year, with users searching #GivingTuesday as well as discussing the event on social media. Broadening their outreach effort, organizers have also teamed up with corporate sponsors, including Honest Tea, which will host a social media campaign on behalf of #GivingTuesday.

The accelerated pace of #GivingTuesday’s growth is a positive sign for the fundraising industry. By using media tactics used to target millennials, the event is working proof that a new generation of donors are stepping up to the fundraising challenges that face the nation’s 1.5 million non-profit organizations.

There is some criticism of the event. Some fundraising professionals contend that the emphasis on giving right after Thanksgiving will detract from donors’ interest in holiday giving, the most important fundraising period of the year. Still others think that by asking for people to give on just one day will help foster a culture of “slackstervism”—or charitable behavior that is minimal and relegated to easy actions such as clicking a donate button.

While #GivingTuesday grows in popularity, it will be interesting to keep track of how it affects fundraising trends; how donors interact with the event and how it alters their giving habits will become more evident with increasing numbers of participants and a higher profile.

The likely result is the growth of a younger donor base connecting organizations that share their concerns, passions, and interests.

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