How do you measure success in a given year? In fundraising, we look at the ability to raise funds, how many new donors we gained, how many donors gave again, and the performance of specific fundraising tactics. It seems like there are always challenges in any given year, so we wanted to understand the challenges that surfaced in 2022 and how this impacts fundraisers’ outlook for 2023. We partnered with the Institute for Sustainable Philanthropy to conduct our Fundraising Planning and Climate Report: Outlook for 2023.
With the help of Dr. Adrian Sargeant, Harriet Jones-Day, James Barratt, and Kathryn Edworthy from the Institute, we surveyed more than 1,000 nonprofit professionals from small and medium-sized nonprofit organizations. The findings uncovered 6 internal factors that will affect fundraising in 2023. Here’s our take on these factors with key data insights from the report:
Fundraiser fatigue is real. Many respondents say that their team’s capacity–or lack of capacity–is one of the most important factors in determining their fundraising performance. While 74% of our survey respondents noted they are confident they will meet fundraising goals this year, capacity, specifically in the form of understaffing or downsizing makes this a tall order.
Many organizations find themselves understaffed and overworked not only on the fundraising side, but also across the organization. Fundraising roles remain unfilled and deliberate downsizing or attrition contributes to fatigue from being overworked and overburdened. This is not new, but it does highlight the importance of self-care, as well as having conversations on what is realistic given budget and capacity constraints.
2. Board Support and Engagement
It’s a necessity for the long-term success of a nonprofit that its Board is engaged and committed to supporting its needs. If Board members are not giving, then it’s time to rethink. Many nonprofit professionals said they had a hard time getting their Board members to engage, noting 56.5% of Board members did not support any form of fundraising activity, and 20.8% had board members who did not make a gift to the organization.
Dr. Sargeant emphasizes that it’s not about the size of a contribution, rather it’s the idea that you have the full support of the Board–knowing that they are committed and stand behind the organization. Only about half of the respondents indicated an “acceptable level of engagement” from the Board. So, on top of capacity constraints, nonprofits are also trying to figure out how to influence their Boards to engage more.
Respondents expressed their concerns about frequent changes in leadership and its effect on the organization’s ability to fundraise. Roughly 33% of respondents (1 in 3) rate internal support for fundraising as below average in 2022, and they indicate that support from leadership has room to improve.
Experts say a culture of philanthropy from leadership defines behavior. On a panel at AFP ICON 2023, Kishshana Palmer, Bloomerang Board Member and CEO of Kishshana & Co., added that it’s critical to spend more time determining what your mission is and what you are trying to accomplish with fundraising and philanthropy. Get to the heart of why you’re doing the work and understand the funds needed in order to operate.
4. Strategy and Planning
You can’t fulfill your mission without a plan in place. Yet, the report revealed a whopping 57.1% of respondents don’t have a written fundraising plan. Rachel Muir, Nonprofit Founder & Fundraising Consultant shared that not having a fundraising plan of how you’ll meet your goals by revenue source and strategy is like hiking in a snowstorm in the dark with a broken compass.
Without a written fundraising plan no one is accountable, progress from year to year cannot be evaluated, and no measurable goals for the future can be set.
Despite fundraisers showing high optimism for achieving their 2023 goals, the question then becomes: How do you create a culture that embraces planning and data-driven decision-making? It starts with a plan, but you also need a culture that supports fundraising. Fundraising must be embraced as the vehicle to fulfill the mission. There is a fundamental tenet organizations need to embrace: Fundraising shouldn’t be treated as an expense, but rather an investment in the future.
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Many acknowledge a need to improve communications with donors in relation to making a case for support. Recent data from The Fundraising Effectiveness Project shows a decrease in donor retention, which has been a major theme in the nonprofit community. According to our findings, some of the top external factors impacting fundraising included the COVID-19 pandemic, economy, and loss of older donors.
If nonprofits are preparing to retain donors, they need to form a strategy for re-engagement, based on both the stage of life of each donor and on meeting donors where they are.
The lines of communication come in different forms. Our survey highlights where many organizations will be shifting and devoting efforts to meet donors where they are at in 2023:
Teams know they need to address these challenges but lack the resources to figure out how to structure better communication with limited staff and time constraints.
6. Budgeting & Finance
Looking ahead in 2023, most respondents say the budget is dedicated to keeping existing donors: 67% of their fundraising budget is dedicated to stewardship/renewal and 33% of budget is dedicated to new donor recruitment. In addition, results show that around 40% of organizations set their fundraising budgets in line with the resources they feel necessary to achieve their income targets. This is positive, however there are still many fundraisers struggling to get the financial support needed to authentically cultivate positive relationships with their donors.
Despite the challenges that nonprofits face, fundraisers continue to be optimistic about overcoming difficulties to reach their goals. Mindset, agility, and leadership support are needed to create and foster the giving culture, and strategic donor engagement by the entire organization will be important drivers for success.
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