2019 may be the most impactful year yet for the fundraising industry. Many nonprofits haven’t fully embraced technology and marketing techniques that are commonplace in corporate marketing – but that will change in 2019. In this episode, you’ll learn 19 predictions Jeremy has for fundraising and nonprofit innovation in 2019.
Full Transcript:
Many organizations, 2018 was a roller coaster of a year for fundraising. We had economic expansion with total giving going up while giving the number of people that gave, went down. With politics that really impacted giving more than we suspected. We had an election season, normally a time in the, a non-presidential year where it doesn’t impact giving that much really, I think, believe that it impacts giving a lot this year with uncertainty. We had tax changes that for the sophisticated donor really made them pause and consider what to give at the end of the year. For many of my peers that I’ve spoken to, it was a soft end of the year fundraising. And so what do we look forward to in 2019? Well, I’ve gotten 19 predictions for fundraising in 2019 for our sector of what’s going to happen. And I’m going to go through those with you today.
First, relationships matter more than ever, it’s so important in your fundraising to focus on the relationships with the donors. You cannot acquire your way out of a donor attrition problem, meaning you cannot spend so much money on acquisition to make up for the number of donors that are leaving out the back door. There just isn’t enough in the space and acquisition is becoming more and more difficult and costly. There isn’t enough donors in the space to have donors continually leave the organization, so you really need to focus on relationships, building relationships with your donor, and how do you use technology to build more relationships?
To do this, number two, my second prediction is that we’re going to have focus more on donor journeys as organizations. We’re going to focus on how do we move a donor through a life cycle of introducing them to our organization, understanding who our brand is, educating them, entertaining them, bringing them into the fold as someone who’s interested in supporting us and then finally receiving that donation and then after that donation, how do we move that donor through a journey of really buying into what we’re doing, buying into the cause and supporting us because they support that cause?
These will include, number three. We’re going to find ways to engage volunteers. For organizations that have international work like Food for the Hungry, volunteer opportunities are much slimmer than organizations that do domestic work and so we’re thinking of different ways to involve volunteers in our process because volunteers are some of your strongest supporters and so organizations are going to look for how do we engage volunteers in new ways, in virtual ways, in ways that we haven’t thought of in the past to build a new supporter pace among the people that want to volunteer with the organization, not just donate.
Next number four, we’re going to improve our donation experience across the industry. I make a lot of test donations throughout the year to see what other organizations are doing and to be honest, a lot of our digital donation experiences just aren’t very good. And so as an industry, I believe in 2019 we’re going to wake up to the fact that digital donation process is not as slick, is not as appealing and is not as easy as our counterparts in the eCommerce sector and many of us are going to move to improve that donation experience, make it easier for people to donate, make it a more joy filled experience. So they walk away feeling joy from their donation experience.
Number five, people are going to become more cause focused and less organization loyal. So as organizations we’re going to have to adapt to that and find ways to really build up our expertise, ensure our expertise within the cause that the person is supporting and not just promote our organizations, as people move towards more interest in giving to causes like clean water instead of focusing on specific organizations. And it’s going to become more and more difficult with the wide variety of nonprofits there are out there to get people to become more loyal to your organization and give over long periods of time. So we have to find unique and interesting ways to feature the cause and not just feature our organization.
Number six, this isn’t probably going out on a limb, but I’m going to say it because it is an awful election year. Politics will interrupt our economy and our giving. We’re going to see just, I think increasing with the Democrats in control of the House and the Republicans control the Senate and the Republicans have control of the presidency. We’re going to see continued fighting in Congress that’s going to interrupt our economy. It’s going to interrupt giving, it’s going to move giving money out of a traditional cause based where we’re benefiting people and then more into causes that are benefiting political causes. And so we want to, as organizations, if you’re not in the political space, you want to find ways to help entertain, educate and inform your donors about your cause and how you’re helping people with real problems to move money back into that sector versus going into the political cause sector.
Number seven, less people are going to give this year, but giving will actually increase as my prediction. Total giving will increase, but it’ll be from fewer donors. That this has been a trend over a number of years and I believe it’s going to continue. I do not believe that we’re going to see a great expansion in the number of people who give but we’re going to see an expansion in total giving. Part of this is due to economic increase. Part of this is due to just people that have a tradition of giving have grown in their economic footprint or nearing retirement and they’re looking for places to give to.
No one was really sure of how the tax law changes would impact year end giving, we won’t know for several weeks to months as to what we believe happened with the tax law changes but I believe that sophisticated donors who are in higher income segment of the economy are going to really look at ways to take advantage of the tax law changes to benefit their positions. This may result in people giving every other year. This may result in people using other sophisticated giving methods in order to benefit from the tax law changes. I do believe fundamentally that most people don’t give just for the tax deduction, but they give because they care about a cause. And so I think many organizations will see a slight dip, but I don’t think this is going to impact overall giving tremendously moving forward.
However, I do believe number nine, that donor advised funds are going to become increasingly popular that there is a ton of money in DAFs right now that has not been distributed out to charities. I believe that’s going to, that trend is going to continue unless Congress acts and puts a cap on the amount or number of years that you can retain money in a DAF. I think people are going to, that use DAFs are more sophisticated donors. They believe that they can increase the money through investments in their DAFs and so why give to a charity to spend when they can give more money later after they’ve made more money? So I think it’s two things there. One is that there’s that belief that they can grow that money and so that they want to benefit more number of charities and benefit the support on the greater amount. And the second thing is, I think once people give to a DAF, it’s almost just give it and forget about it, that there is money sitting out there that they may go to a couple of times a year and think about distributions and if there’s no one that’s in front of them at that point, they may not give at that point. And so the money just continues to sit there and grow.
Number 10, organizations are going to grow in both sophistication and in adopting more planned giving methodologies or going after people to become part of their estate planning. This is an area that I think that a lot of organizations are weak end and that we don’t have a focus on that we might have a portion of a person, if at all focused on planned giving. However, it’s an area that we’re going to see trillions of dollars in the coming decades be given away, that the organizations that embrace and find new ways to reach donors in ways for planned giving are going to benefit from that money.
Organizations, number 11 are going to embrace content marketing. This trend has started a bit over the last couple of years, but I think it’s really in its infancy in the nonprofit sector. I think that a lot of the, what, many nonprofits believe is, good content marketing is not yet there as good content marketing. And so I think this year we’re going to see an expansion and see organizations that do embrace content marketing, start to really win in digital and bring in new donors and bring their existing donor base online in ways that we haven’t seen before. So if you’re a smaller midsize organization and you want to become a large organization, I think that content marketing is one of the ways that you can do that, to really excel in the digital space in ways that you may not have in the past.
Number 12, organizations are going to continue and increasingly adopt a marketing automation and donor automation and really find ways with the limited resources they have to reach the most people they can online and to use techniques and use methods that have been for many years in development in the for profit space and use some of these platforms that allow them to either meet marketing and achieve things that they’ve never been able to do in the past.
And with that, number 13, we’re going to see many organizations adopt sophisticated donor personalization and reach their donors for causes and for specific campaigns that speak to the heart of what the donor is interested in giving to many of the really great marketing automation and donor management systems. The ones that have integrated tools, they have this donor personalization built in. And so as organizations understand that and assign people to go research and implement that, we’re going to see increasingly donor personalization help engage volunteers, help focus donors on those donor journeys and help build those relationships with donors so that they believe the organization really cares because you know exactly what they want to give to.
This next year, number 14, peer to peer has been exploding over the last couple of years and I think you’re going to see an increasing use of peer to peer fundraising of people lobbying their friends to join them in fundraising campaigns and you’re going to see that continued increase in the social media space. I think platforms like Instagram are going to become huge for nonprofits over the next year and that you’re going to see tools from other social networks and other media companies that will allow nonprofits to raise more money through peer to peer and take advantage of them.
With that, number 15, I think there’s going to be expansion in the amount and number of donations coming through third party fundraising and middlemen like Facebook and as an organization we have to adapt to knowing that we’re going to raise a portion of an income and not have the donor information from that. That it’s going to come from places like Facebook where the donor can opt in or opt out of you receiving their contact information. And so we’re going to need to come up with new ways to reach those people. I do believe this year that Facebook will start allowing you to target people through advertising that have given through Facebook fundraising campaigns to your organization and possibly even allow you to communicate to people through the Facebook platform that have given without paying through more of like a messenger type communication. This is going to be important for nonprofit, from a nonprofit perspective to be able to reach those donors that many of them we cannot reach right now.
Number 16, we’re going to see a lot of innovations in the fundraising space over the next year. We’re going to see new methods of fundraising that we haven’t seen before, we’re going to see at least one or two campaigns set up, just will blow the top off of expected fundraising and many organizations will try to mimic what those organizations do to pull off those innovations.
Number 17, I believe in direct mail still. I believe that direct mail still has a future. I do not believe that direct mail is dead. I do believe that acquiring donors through direct mail can be profitable. It’s very profitable for Food for the Hungry to acquire donors through direct mail acquisition. And I believe that this year that organizations that do spend money in direct mail acquisition are spending money, many organizations I think have quit or have reduced their direct mail acquisition budgets. And so those that do spend money on direct mail acquisition will find it profitable over the next 12 months.
A long with that, I also see an expansion in number 18 in recurring giving. I think many organizations have seen the value of recurring giving. They haven’t, as to say cracked the nut on how to raise recurring giving with their donors but I think many organizations are going to invest in and focus some energy and time on motivating donors to become recurring if it’s monthly or otherwise giver so that they can get this year long base of income generated without focusing so much on the last quarter of the year when most nonprofit fundraising comes in.
And finally, number 19, this is ending. I’m kind of a lower note. I do believe that there will be a major data breach in the nonprofit sector by a large nonprofit. Just, there’s been so many in the for profit corporation space of huge data breaches that I think that nonprofits for the most part have lagged behind their for profit counterparts in security and that there will be a data security breach at some point in 2019 with a large nonprofit and that will force all the other nonprofit organizations to rethink how they’re doing data security and make sure that they’re protecting donor information as much as possible.
Thanks for joining me on this a special episode with my 19 predictions for what’s going to happen in 2019. I hope many in the positive ones will happen for your organization. I appreciate you as my nonprofit answers audience that, joining me in 2018 as we launched this new podcast and looking forward to many more episodes to come.
