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Taking Action: Fundraising Trends And Best Practices From Bloomerang's 'Fundraising Planning and Climate Report'

Bloomerang's 2023 Fundraising Planning and Climate Report
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This post describes actions you can take to implement the findings of Bloomerang’s 2023 Fundraising Planning and Climate Report. 1,071 fundraising professionals were surveyed at small and medium-sized nonprofits supporting a variety of causes. Multiple, practical action steps are presented below to advance your fundraising based on the survey results.

These action steps are designed to correspond with the developmental stage of your fundraising program. The post starts off with general guidance. Subsequent action steps are grouped according to your level of fundraising development: Getting Started, Advancement (somewhere further along), and Going from Good to Great.

Not all fundraising programs look alike. In fact, they vary greatly depending on your location, the skills of your volunteers, and your past training and experience at fundraising. No matter where you are in your growth stage, taking action, in concert with your internal stakeholders, will always bring you closer to the goal of raising more revenue. 

Download the Full 2023 Fundraising Planning and Climate Report Now!

Download the Report

General guidance for fundraisers

Here is general guidance on actions fundraisers can take based on fundraising trends and best practices drawn from the report. Your own careful review of the report is encouraged. 

The Fundraising Planning and Climate Report’s findings show the following:

  • Adjust fundraising strategies: Based on the report’s predictions, consider adjusting your fundraising strategies to align with the current socioeconomic and cultural climate, and donor preferences. For example, the report highlights the growing importance of digital fundraising, so investing more resources in online campaigns and social media outreach would be a smart move.
  • Segment your donor base: Use the information from the report to segment your donor base effectively. Tailor your fundraising messages and methods to specific donor categories based on their preferences and behavior. One size does not fit all.
  • Embrace personalization: With the changes in donor expectations outlined in the report, prioritize the individualized touch in your fundraising communications. Craft personalized thank-you messages and updates to strengthen relationships with donors and enhance donor retention.
  • Diversify fundraising channels: The report documents shifts in donor behavior and preferences. Therefore, be sure to diversify your fundraising channels to reach donors through multiple platforms, events, and initiatives.
  • Prioritize donor stewardship: Focus attentively on donor stewardship and engagement to build strong, long-lasting relationships with your supporters. Show appreciation for their contributions and keep them informed about the impact of their donations.
  • Invest in data analytics: Leverage data analytics to better understand donor patterns and preferences. Use this information to optimize your fundraising efforts and make data-driven decisions. All modern donor databases feature donor analytics and report generation that you can use.
  • Stay agile and flexible: The fundraising landscape is changing rapidly. Stay agile and be ready to adapt your strategies as needed based on new information or developments in the fundraising environment.
  • Collaborate with peers: Engage with other fundraisers and organizations to share insights and best practices. Collaborative efforts can lead to innovative solutions and improved fundraising results.
  • Monitor progress: Continuously track the performance of your fundraising efforts and measure them against insights detailed in the report. Regularly reassess your strategies and make necessary adjustments to achieve your fundraising goals.

Remember, these are general guidelines, and the specific actions you decide to take depend on your particular circumstances. 

Let’s move to specific actions based on the developmental stage of your fundraising program.

Getting Started: Setting your goal

  1. How much revenue must be raised? Having a monetary goal is fundamental. Many fundraisers do not set a specific goal for what they’re trying to achieve, or they set a goal but then don’t track their progress toward attaining it! Or they set a goal that doesn’t cover all their costs. It’s important to determine the real amount of revenue needed. Using operational budgets can be a start, but fundraising does not just rely on current numbers. Current budget numbers reflect your existing program commitments, not your aspirational ones. Your real revenue goal must include the enhancements or expansion you seek. This step provides a golden opportunity to include the finance director in your work and create an important ally. (See my book, Fundraising 401, Chapter 10, “Finance & Fundraising Are Not in Opposition.”)
  2. Determine the capacity to give of your donors and funders. Funder assessments and donor feasibility studies are critical at this point, especially when advanced prospect research is integrated into the fundraising process. Further, Step Two must include segmenting your donors; this will allow you to know which donors, small, middle-sized, and major, are a fit for which fundraising drive or campaign. Let’s not forget the need to identify new donors, donors who are value-aligned with your mission. That cost must also be factored into your revenue needs.
  3. If capital improvements are sought, you’ll need to obtain actual cost estimates from qualified vendors. Further, many capital campaigns overlook the need for reserve funds to maintain the new or renovated building. Reserve funds for this purpose run about 10% of the capital goal. The capital reserve stays in place after construction and is restricted to building maintenance.
  4. Be sure to include in your revenue goal the costs of fundraising so that you’re made whole in the end. Recouping one’s fundraising costs is often overlooked and a major reason why development programs are so undercapitalized. Fundraising costs should include your need for stellar donor communications, the appropriate staffing of the development office, and the next level of digital platforms. Digital fundraising is about using all the channels at your disposal in an integrated way to reach and expand your audience, spark engagement, and grow your giving opportunities.Be sure also to include the overhead rate of staffing and running your nonprofit. Many institutional funders will, in their applications, cap your allowable overhead rate, usually around 10%, even when your actual costs are higher! But when setting your total fundraising goal, you can include the actual overhead rate.
  5. Include the cost of donor recognition, another area often overlooked. I estimate that between $5,000 to $20,000 is spent annually on recognition activities by most nonprofits, more if you’re in a major campaign.

Advancement

The word “Advancement” is often used in fundraising, but what does it really mean? My own definition is to trade one set of dilemmas for a better set. Having a better set of dilemmas is a sign of progress and growth. Sometimes we definitively solve our fundraising dilemmas, but more commonly we trade them for better ones. And that’s fine. 

As previously noted, Bloomerang’s 2023 Fundraising Planning and Climate Report emerged from a survey of 1,071 nonprofits. The respondents identified the dilemmas they faced, and I’d bet you will relate to them. The report groups nonprofit fundraising dilemmas into external and internal factors.

Four top external factors are noted, plus six internal ones—all of which impact your fundraising.

4 external factors

The external factors are the economy, the political climate, the COVID-19 pandemic, and the death of donors, and they raise the following questions for your consideration:

  1. How is your nonprofit affected by inflation, unemployment rates, the vagaries of the stock market, and fear of a recession? Are these factors relevant to your funders and donors, and should your donor correspondence speak to these issues?
  2. Should your fundraising messaging be apolitical, or should your values shine through? 
  3. Do you have a case for support tailored to younger donors?
  4. Do you have an approach suited to older donors

It’s important to answer these questions for yourself and chart your course of action accordingly. 

6 internal factors

The internal factors concern the organizational structure of your nonprofit: capacity, board support and engagement, strategy and planning, leadership issues, communication issues, and budget and finance. Here is food for thought along these lines:

  1. Underfunding the fundraising program is endemic to nonprofits. While you may not be able to budget for all your needs, can you secure adequate capacity funding to advance your advancement program? Have you brought this to the attention of your CEO and board? 
  2. Staff fatigue ruins fundraising performance. How are you nurturing and supporting your fundraising staff?
  3. Many fundraisers tell me they’ve talked to the board about their fundraising needs but were ignored. Have you tried bringing in a communications facilitator to deepen the conversation? The facilitator may be able to better convey the need and achieve the desired results.
  4. Do you have a fundraising plan? Fundraising programs with a thoughtful plan always raise more revenue. The plan doesn’t need to be complicated at the start. A basic plan is just as empowering as a roadmap. 
  5. Are you “managing up” your CEO to guide executive leadership toward greater fundraising knowledge and action? Nonprofit CEOs vary in their understanding of the development process. Assess where your CEO is and have regular meetings with him or her to share the thinking behind your efforts and the field’s best practices.
  6. Donor communication is woefully lacking in many nonprofits. What next steps can you take to communicate more effectively by email, postal mail, and online? Weekly communication is a basic standard. That’s fifty-two “moves” each year. How close are you to that standard?

Your answers to these key questions will further refine your efforts and increase your fundraising returns.

Going from Good to Great

If your nonprofit is in this enviable stage of growth, congratulations. You are far on your way to securing the sustainable revenue you need to fulfill your organization’s vision.

At this level, your fundraising plan should cover the next three to five years and be reviewed and evaluated quarterly for your performance against the plan’s benchmarks.

Legacy giving, moves management, and customized donor prospect research should now be fully integrated into your fundraising program. If applicable, private foundations are being continually solicited and cultivated. 

Bloomerang’s 2023 Fundraising Planning and Climate Report documents the tactical shifts that fundraisers are making. In addition to tactics that proved successful in the past, respondents are trying out innovative ways of attracting new donors and better communicating with existing ones. They’re experimenting with matching campaigns, text-to-give variants, project-specific direct mail appeals, predictive technology for donor insights, donor appreciation events, and donor surveys. 

With these innovations in mind, consider the following action steps:

  • Add a Matching Gift Challenge to your Annual Gala: When a donor offers to make a substantial contribution, usually a trustee or someone who knows and values your organization and has been giving repeatedly, you should realize that a terrific opportunity has been presented to encourage giving by others. You can then confer with the donor, and, if an agreement is reached, launch a matching challenge drive following the guidelines that you and the donor work out and sign off on. Guidelines can include whom to target for the challenge, when the donor pays (up front or after the challenge is met), and how the challenge will be advertised or marketed.
  • Launch a Text to Give, or Text to Donate drive: Your donor likely has a cell phone. According to Zippia.com, there are more than 300 million smartphone users in the United States alone, and an average cell phone user interacts with the device more than 2,000 times a day. The prevalence of this communication channel makes it an easy choice for expanding donor stewardship; some donors might even prefer it. In fact, according to slicktext.com, 85 percent of customers report favoring smartphone messaging over email or phone calls. Text todonate is one fundraising tool you can leverage to engage your audience through their mobile devices. While the terms sound similar, text to donate and text to give are distinct categories of mobile fundraising. Both ask supporters to text a designated keyword to contribute to a certain cause. With text to give, the amount is pre-set and added to the donor’s phone bill. With text to donate, the donor can customize the amount of the gift. Several other significant distinctions exist, and understanding the limitations of text to give versus text to donate can help you choose an approach to maximize donor engagement and mobile giving.
  • Embrace Artificial Intelligence: The next wave in digital fundraising is artificial intelligence (AI), and nonprofits are sure to increase their adoption of tools like chatbots. Chatbots are friendly, automated mechanisms built into website platforms to answer questions—like an automated FAQ. Nonprofits that embrace chatbots and other artificial intelligence tools will have a leg up when donors are researching organizations that share their values and goals.
  • Plan virtual galas: Galas are a show. In this new era of virtual and hybrid events, event planners should think differently about the orchestration of these affairs and how to make the virtual event as engaging as the in-person experience. During the early days of the pandemic, donors were patient with remote experiences that fell flat. Now, they expect more. As a result, work closely with event planners who understand how to make virtual events attractive and enjoyable. But remember, the same fundraising verities apply as in traditional gala fundraising. It’s essential to secure the bulk of the gifts from your honorees, sponsors, and awardees well before the event takes place.

And be advised that:

  • Mega donors will play an increasingly important role: According to barrons.com, gifts from mega donors totaled more than $9.5 billion in 2020—consistent with the massive growth at the top of the wealth spectrum. While super-wealthy donors aren’t accessible to all nonprofits, they’re nonetheless having a trickle-down effect on the practice of philanthropy. Billionaires like MacKenzie Scott are quite public about their giving priorities and are shaping the way other donors think about their giving. Even if you’re not able to build relationships with the uberwealthy, pay attention to how they approach and structure their giving—since it will soon influence and reflect the priorities of your donors.
  • Donor-Advised Funds will keep growing: More than $142 billion is now sitting in donor-advised funds (DAFs), a number that will continue to grow as donors keep pouring more money into this popular giving vehicle. Your nonprofit can tap into this massive pot of potential funding by using prospect research and survey tools to identify donors who channel their philanthropy through DAFs.
  • Staff retention is critical: The number of fundraising jobs is expected to grow by more than 11 percent over the next decade, the Bureau of Labor Statistics informs us. The increasing demand for qualified fundraisers happens to correlate with a notable change in how individuals approach their careers. Retention has always been a challenge for nonprofits, especially when it comes to top fundraising talent. But in light of the “Great Resignation”—a 2021 phenomenon in which many workers reassessed their priorities and walked away from jobs and careers—the challenge is even greater. As a result, staff retention is one of the top issues facing nonprofit leaders. With that in mind, make sure you’re communicating regularly with your top talent, being flexible, and finding ways to ensure that they’re getting the support and resources they need to be happy and successful. You should also pay close attention to the mental health of your team and think about creating an environment that fosters positive mental health. When fundraisers feel good, they perform better—and are more likely to be satisfied with their roles.

This list of actions and pointers from the Fundraising Planning and Climate Report is just the start of the breakthroughs and accelerators that can occur at an advanced stage of growth! We haven’t even covered third-party fundraising platforms, partnerships with other groups, crowdfunding, cryptocurrency campaigns, used-car donations, or in-memoriam giving. Thankfully the Bloomerang blog does!

Happy action planning! 

Download the Full 2023 Fundraising Planning and Climate Report Now!

Download the Report

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