Category: Donor Participation Project

The number of charitable donors in the U.S. has been declining in recent decades. While overall giving amounts have risen, participation rates have dropped. What’s behind this trend and how can nonprofits reverse it?

Research shows several factors driving the decline in donor participation.

Generational changes are a major contributor, as younger generations are less likely to donate than older generations. Income and wealth inequality also play a role, as fewer people have disposable income to donate. Changes to tax policy, like the 2017 Tax Cuts and Jobs Act, have reduced incentives for some to give.

However, these factors do not fully explain the trend. Nonprofits must also examine how they communicate with and engage donors. Researchers have found that donors give for two main reasons: to support the public good (the “output” motives) and to satisfy private motivations (the “input” motives). Messages focused only on the public benefits of giving may not resonate with those also motivated by private benefits like social approval or self-image.

What can nonprofits do?

• First, evaluate fundraising messages through the lens of dual motives. Are you appealing to donors’ self-interest as well as support for your mission?
• Second, make long-term donor retention a priority metric. While revenue matters, focus also on developing lifetime donor relationships.
• Third, work with interested donors to engage the next generation. Kids often mimic the giving habits of role models, but many are unaware if their parents donate. Programs where families participate together in philanthropy can nurture a lifelong giving habit.
• Finally, collaborate with researchers to conduct studies on donor motivation and messaging. For example, research is needed on how different types of campaign matches (e.g. donor matching funds vs. seed funding) influence future giving behavior. Partnerships between nonprofits and researchers can help bridge the gap between theory and practice, generating actionable insights for overcoming the declining donor challenge.

Overall, reversing the downward trend in donor participation will require a combination of adapting to external factors, improving donor relationships and knowledge, and making philanthropy an engaging lifelong affair for supporters and their families. With a research-based approach, nonprofits can find ways to turn occasional donors into regulars and secure their support for years to come.

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Hiring a consultant can be invaluable for advancing your organization’s mission and fundraising goals. However, it requires forethought and clear communication to set the right foundation for a productive partnership.

Consider these key points before engaging a consultant:

Build trust and internal buy-in.

Meet with your team to discuss why you want to hire a consultant and how it can benefit the organization. Address any concerns about job roles or workload to ensure full support. Buy-in at all levels, especially from leadership and those directly involved in the project, is critical.

Define clear deliverables and scope.

Map out exactly what you want the consultant to achieve. Be as specific as possible regarding the scope of work, outcomes, deadlines, and key milestones. Discuss this directly with potential consultants during the interview process to make sure expectations are aligned from the beginning.

Determine data and resource needs.

Ask consultants what information and tools they require to do their job. Make sure you have the ability to provide everything that is necessary to complete the project successfully. If not, discuss options for obtaining the data or resources.

Assign a primary point of contact.

Identify someone internally to serve as the main liaison for the consultant. This person should have good project management skills and be able to devote sufficient time to the role. They will help gather information, address questions, and ensure the consultant has everything they need to meet deadlines and deliverables.

Build in opportunities for feedback.

Do not wait until the end of the project to get updates. Schedule regular check-ins, reviews of drafts, and interim presentations to provide feedback and make any needed course corrections. This also allows you to reevaluate timelines if requirements change.

By focusing on trust, communication, and mutual understanding, you set the stage for a highly productive relationship with your consultant. Addressing key considerations upfront helps avoid potential pitfalls and leads to outcomes that meet, or even exceed, your expectations. With the right strategies in place, consultants can be valuable partners in helping your organization achieve its most important goals.

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Planned gifts, especially legacy gifts made through wills and beneficiary designations, should be an important part of any nonprofit’s fundraising strategy. These gifts made from assets rather than cash often become a nonprofit’s largest donations. Even small organizations can benefit since anyone can make a planned gift, regardless of age, gender, or wealth level.

The most compelling reason to focus on planned giving is that donors who make legacy gifts become your most loyal supporters.

According to research by Dr. Russell James, donors increase their annual giving substantially after putting a nonprofit in their estate plan. Their lifetime giving, including annual and planned gifts, far surpasses donors without a planned gift. Cultivating these long-term relationships leads to joyful fundraising for both donors and nonprofits.

How can nonprofits attract these valuable donors?

Start marketing planned giving as soon as possible. While the full benefits may take years to realize, early outreach helps build familiarity and comfort with the concept. Use a simple message focusing on a donor’s values and omit scary jargon. Explain options like wills, beneficiary forms, and gift annuities using terms like “future gift” or “legacy.” Highlight impact by inviting donors to special events.

Communication

Steward planned giving donors well with personal notes, phone calls, and invitations reserved for your most loyal supporters. But never stop communicating or soliciting annual gifts, even for donors in their 80s and 90s. Realized bequests often happen within a donor’s last five years of life, so ongoing outreach is critical right up until the end.

A planned giving program is a long game that requires patience but pays off tremendously. While each donor lost is sad, their legacy can live on through the fruits of their gift. This is the joy of fundraising through relationships that transcend a lifetime. With the right message and highly personalized stewardship, any nonprofit can experience the rewards of planned giving. The key is starting now to build familiarity and make the most of opportunities to create lasting impact.

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Traditional marketing strategies are becoming less effective. Advertising is ignored, fundraising letters go unopened, and digital ads are tuned out. Nonprofits need new ways to connect with donors and community may be the answer.

According to author and marketing expert Mark Schaefer, community is “the last great marketing strategy.” Schaefer argues that community builds the meaningful relationships and trust that nonprofits need to succeed. Community creates ambassadors who spread your mission through word-of-mouth marketing. It provides a space for cocreation where donors shape your work.

But how do you build community with limited resources?

Schaefer recommends starting small by identifying five engaged donors or volunteers. Bring them together in person or online and create opportunities for conversation. Let them shape the direction and activities. As the group grows, elevate members into leadership roles to help manage the community.

Schaefer warns against trying to control the message or measure community like other strategies. Focus on engagement and be present to nurture relationships. Provide “hero products” or experiences that people want to share outside the community. For example, give members exclusive behind-the-scenes access or share impact stories and updates.

Building community requires time and experimentation but the rewards are worth it.

“My community is bigger than my business,” says one executive Schaefer interviewed. “Most people don’t even know I have a business.” A thriving community can become the heart of your organization and a catalyst for growth.

The key is starting small, selecting members who share your purpose, and giving the community autonomy to develop in a way that’s meaningful for them.

With the right nurturing and care, community has the potential for organic growth and impact well beyond any one marketing strategy alone. For nonprofits, community may be the best path to building the lasting relationships that drive progress.

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Engagement is more than a feel-good tactic for nonprofits. Done right, an engagement strategy can directly lead to increased giving and revenue. Fundraisers Ron Cohen and Louis Diez recently discussed data showing how organizations can put a “dollar amount on engagement.”

Cohen shared a story of Wabash College creating memorial book plates to honor deceased alumni. Though the families weren’t asked for donations, many visited campus and became ambassadors for the school. Engagement built trust and spread goodwill, with untapped potential for future giving.

Diez said to “look at your donors and the ones who have given the most. Try to measure how loyal they’ve been.”

Their data shows donors who have given for 6-11 consecutive years typically make much larger lifetime gifts. The more people feel engaged with your work, the more they give.

Cohen and Diez surveyed 9,000 donors and found that those who “meet or discuss the organization at least 5 times a year and always or very often feel valued” gave at rates up to 5 times higher in each giving level. For example, while 0.5% of all donors gave over $100,000 lifetime, 2.5% of highly engaged donors were in this top category. Focusing engagement on just an additional 4% of donors could result in over $1 million in new gifts.

The presenters call this the “X factor”—the potential for exponential growth by engaging the right groups. But engagement is a long game. As Diez said, “It’s not that more of the people who gave $100 last year will give $200 this year. Engagement builds loyalty and trust over years through accountability and transparency.”

While it can be difficult to make the case for investment in engagement, Cohen argues, “it’s just the right thing to do, and organizations need to be trusted in order to be invested in.” By building real relationships with transparency and follow-through, nonprofits can strengthen loyalty, spread goodwill, and see the dollars follow. Engagement leads to giving when done with the right motivations and the long view.

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Fundraising technology expert Cherian Koshy shared a glimpse into the artificial intelligence tools that are enhancing nonprofit practices today on a recent Donor Participation Project session. While AI has been around for decades, new applications are making these technologies more accessible and impactful for organizations of all sizes.

According to Koshy, AI tools can help fundraisers gain valuable time, save money and better understand their data.

Chatbots, for example, can communicate with donors to answer frequently asked questions or help them complete transactions quickly. Descript, an audio/video editing tool Koshy recommends, can create video content from audio or text in seconds. These types of AI allow fundraisers to focus on relationship-building instead of repetitive administrative tasks.

On the data front, AI is enabling more robust analysis without the need for technical expertise. Koshy highlighted a tool that allowed her team to analyze 30,000 emails and gain insight into how subject lines, headers and content impacted open and click-through rates. Such knowledge helps fundraisers optimize campaigns and better engage donors.

AI should enhance, not replace, the human touchpoints in the donor experience.

While AI will continue advancing rapidly, Koshy stressed that human connection and empathy remain crucial to fundraising success. She encouraged fundraisers to consider how AI could benefit both internal operations as well as external relationships before rushing to implement the latest shiny tools.

With AI embedded in many of the technologies we engage daily, nonprofit leaders must recognize both the opportunities and obligations presented by progress. As Koshy noted, AI may soon provide table stakes functionality, but human fundraisers will always be essential to building trust and understanding donor motivation. By approaching AI thoughtfully and strategically, nonprofit fundraisers can utilize technology to forge deeper human-centered relationships. The future of fundraising, it seems, will be fueled by the perfect partnership of human and machine.

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Nonprofit organizations have access to a wealth of data that often goes untapped. While data in CRM systems is useful for reporting, there are many other data sources that offer key insights into donor behavior and preferences. Unlocking “hidden” data from sources like phone-a-thons, email marketing, social media, and events can give nonprofits a competitive edge through data-driven decision making.

Two data scientists and fundraising experts argue that nonprofits should make the case to leadership for investing in capturing and analyzing more granular data. On a recent podcast, Mike Brucek and Erin Moran discussed strategies for unlocking the power of hidden data.

1. They recommend starting by simply requesting data exports from current vendors and systems. For example, ask your phone-a-thon vendor for detailed call records before ending a contract. Having more detailed data—even if outdated—is better than having no data at all.
2. Brucek and Moran also suggest collaborating with leadership to invest in data engineering and science roles. While an annual fundraiser may show ROI within a year, data scientists often need several years to demonstrate value through data projects. Nonprofits should consider data roles as a long-term investment that enables more targeted, data-driven fundraising.

Once nonprofits have additional data in hand, they can build more robust models to determine metrics like donor lifetime value or the likelihood of attending an event. Nonprofits can also use data to personalize the donor experience through customized communication and more relevant engagement. Partnerships with data-focused vendors may help nonprofits that lack internal data expertise.

Unlocking hidden data is a first step towards gaining a competitive advantage.

Nonprofits that are able to leverage detailed data to its full potential will be poised to build data-driven fundraising programs focused on meaningfully engaging the right donors in the right ways at the right times.

Overall, nonprofits must make the case that an investment in data is an investment in their mission and financial sustainability. The future is data—and nonprofit organizations cannot afford to be left behind.

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For many nonprofits, the majority of donations come from small, habitual gifts that require little effort to secure but do little to advance the mission. These “pat on the head” donors give to feel good but aren’t deeply invested in outcomes. To achieve real impact, fundraisers must move these donors to become true partners.

According to fundraising experts Russell James and Jim Langley, building meaningful relationships is key.

Conduct in-depth “listening” interviews to understand donors’ motivations, values, and capacity for giving. Ask open-ended questions about their interests and how they’d like to see your organization’s work unfold.

This shows them respect, builds trust, and helps determine if their goals align with your own.

With this knowledge, suggest opportunities for more substantial gifts that will achieve shared goals. For example, offer to “sponsor” or fund specific programs or initiatives. Use a “per diem” framework that breaks down larger gifts into digestible amounts that match what certain activities cost. This helps donors visualize the impact of their giving in a very concrete way.

Follow up with gratitude

Follow up interviews and the resulting gifts with sincere gratitude and reports on the difference they’re making. As Jim Langley said: “It’s not just, you know, chats but it was actually some type of format to it, or maybe they weren’t framed in that way that professor James was talking about where they weren’t predicting their future behavior.” Ask more questions to keep the dialogue going and reaffirm the partnership.

While resource intensive, investing in advancement pays off. According to University of Pennsylvania researchers, fundraising expenditures strongly correlated with fundraising revenue for arts and culture organizations. For every $1 spent, organizations raised between $2 to $8. Moving “pat on the head” donors up the giving ladder is the key to unlocking this potential.

Authentic relationships, active listening, and framing gifts around impact are timeless fundamentals of fundraising success.

In today’s evolving philanthropic landscape, they are more important than ever for turning casual contributors into real partners for change. With vision and persistence, nonprofits can achieve so much more by moving beyond “pat on the head” and towards true partnership.

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Juan Mones, Head of Innovation at UNICEF, shared his insights on key trends affecting nonprofit fundraising and how organizations can tap new funding sources through partnerships.

Donors today want to be “protagonists and change agents” in solving problems they care about, not just “wallets.” They expect nonprofits to equip them with knowledge and tools to drive change. Donors are also increasingly committed to causes, not specific organizations. “It doesn’t really matter to stay longer in an organization. It matters to be there where the need is,” Mones said.

These trends demand that nonprofits provide more evidence of their impact and mission-focused “value exchange propositions” to supporters. For individual donors, delivering personalized experiences and learning about their expectations is key. For corporations and foundations, connecting work to priorities like the UN’s Sustainable Development Goals is critical.

To uncover new funding sources, Mones recommends nonprofits look beyond their current fundraising models.

“There are innovation opportunities in both incremental innovation…and in new models,” he said. The key is finding the “sweet spot” between mission, skills, audience needs, and funding opportunities.

Partnerships are integral to innovation.

According to Mones, the most successful nonprofit innovations are “never…an effort of the organization” alone but the result of partnerships. Nonprofits should learn from the private sector, then look for partners with expertise in business models they want to replicate. The key is finding a “win-win” that addresses partners’ priorities as well.

For example, UNICEF Colombia partnered with a bank conducting a telemarketing campaign offering to activate unused credit cards if customers set up monthly UNICEF donations. This led to 50,000 new donors in six months.

Overall, Mones’ advice is for nonprofits to keep innovating, focus on value and impact, build partnerships, and tap new funding models and sources—or risk struggling with a shrinking pool of support. The challenges are real but so are the opportunities. Nonprofits that can demonstrate their vital role in addressing causes donors care about will be best positioned to succeed.

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The decades-long decline in donor participation for nonprofits appears dire but reversible, according to Woodrow Rosenbaum, Chief Data Officer at Giving Tuesday. Rosenbaum shared insights from Giving Tuesday’s research with nonprofit leaders, challenging the assumption that donor motivation is waning.

In fact, the desire to give remains strong. The issue is that nonprofits have focused too narrowly on large donors at the expense of broad engagement.

The data shows most people regularly give in multiple ways, not just to nonprofits. Nonprofits only receive about one-third of total giving acts. By dismissing other forms of generosity and prioritizing large gifts, nonprofits have optimized for the very outcome they now face: more money from fewer donors.

This shortsighted strategy puts nonprofits in a precarious position, reliant on a shrinking pool of funders and unprepared for economic shifts that primarily impact larger gifts.

Rosenbaum calls on nonprofits to abandon scarcity mindsets, recognize the “immense untapped opportunity” in grassroots supporters, and build year-round engagement. Nonprofits must “start now, not next month,” developing multifaceted relationships with donors rather than viewing them as transactions.

Giving days like Giving Tuesday, which drove increased donor participation in 2020, provide a template.

Donors give for the experience of joining a broader community to create change. Nonprofits should create more of these opportunities, matching the ways people naturally want to give through their time, networks, advocacy, and money.

Nonprofits concerned about “too much noise” or “overly crowded” fundraising spaces are missing the point. Donors are giving regardless, looking for ways to contribute. Nonprofits can either purposefully engage them or remain on the sidelines while others step in. Those taking action, Rosenbaum notes, can participate in Giving Tuesday’s “Insights to Action” project, which will test engagement strategies this summer to develop recommendations for reversing donor decline and building financial resilience.

View the full recording of this session in our Resource Library.