This week, GivingUSA released their latest report on giving. As a nonprofit leader, it’s important that you understand these trends. At least, if donations are a key part of your revenue.
Good news about giving
As reported on the Fundraising Coach blog, giving in the United States grew last year to $373.25 billion. That’s a 4.1% increase over the previous year.
While growth is good, as a nonprofit leader it’s important to remember a few things.
The bad news about giving
First, 4% growth isn’t really that much. Ask your board members who own businesses if this rate of growth would cause them to issue press releases and throw parties. It’s great that people are giving, but we still have a lot more work to do. Especially since other research shows that the average donor retention was only 46% last year. (Board members wouldn’t be excited about a 46% customer retention rate either.)
Second, while giving grew, the report shows that individual giving remains virtually unchanged since 1975.
The report also shows that giving as a percentage of gross domestic product is pretty much unchanged at 2.1%.
But the number of nonprofits has exploded since 1975. Each year overall giving has gone up every year but one – even in recessions. And nonprofits are getting much better at telling their story.
But the overall percentage of individual giving isn’t changing. This means we as nonprofit leaders have a lot of work to do. At least in learning how to communicate to our own supporters.
3 things nonprofit leaders should do about giving
In the light of the report, here are three things we recommend you as a nonprofit leader or board member consider in regard to your own organization’s giving:
Congratulate your fundraising team
While giving is growing, it isn’t growing quickly. Be sure to take time to thank your fundraising team. This thank you video for fundraisers may be a starting place.
And remember to thank yourself – as a nonprofit leader or board member, you are one of the most important fundraisers in your organization.
Set budgets responsibly
Every year, we hear from fundraising professionals who have been given completely unrealistic fundraising mandates. Board members and nonprofit executive directors seem far too eager to increase fundraising goals with only the flimsiest of logic. Their fundraising may have doubled in the previous year. Or they finished a capital campaign. They automatically accept these new fundraising totals as the new “normal” for increasing fundraising goals.
A saner, more logical way to set fundraising goals is to remember that giving only has grown around 4% a year. We recommend leaders consider setting fundraising goals based on a three- or five-year rolling average. Anchoring your numbers in past performance may not be as exciting as expecting to triple your budget. But it will help you lead your nonprofit without burning out fundraisers or alienating donors.
Consider hanging out with new peopleIn 2012, charity:water CEO Scott Harrison addressed more than 3000 fundraisers in Vancouver at the AFP International conference. His story is inspiring. And his bold challenge too. He looked out over the crowd and said,
“I can’t hang out with people like you here. You get excited about 3% or 4% growth. But people need water. They need us to raise more. So I need to hang out with tech entrepreneurs who’d look at that growth and wonder, ‘What is wrong? Why isn’t it growing?’ I need to be hanging out with people who’ll challenge me to see bigger.”
Maybe that’s you too. There is some truth in the old adage that you are the average of the five people you hang out with the most. Do you need to be around different peers?
One good place to find new people is to talk to your board members about the growth in their businesses. Not everything that businesses do are appropriate in nonprofits…but we can learn from each other. Another place to consider is looking for other people who love your work and challenge you to grow. That could definitely be a coach, like our nonprofit executive director coaching program.
Leading a nonprofit needs you have to oversee your programs and how they are sustainably funded. Doing these three things will help you keep those programs growing for years.