A shorter version of this piece was originally published on Nonprofit Tech for Good.
If it seems like we’ve been talking about 2020 for decades, it’s because we have been. Over the last century, futurists and experts in nearly every field have made some kind of declarative prediction for 2020 and what the world would be like when it finally arrived.
While someone traveling to the future from the 1950s might be disappointed to realize we don’t send mail by rocket or have flying houses, what I am sure they’d be impressed by is the degree of social impact we’ve driven as a collective society and the steps we’re taking to continue to evolve.
Steps and nudges forward may not sound as exciting as leaps and bounds and robot butlers, but it’s how “big change” actually comes to fruition. That’s why we’re calling out the things we see bubbling up to the surface for nonprofit fundraising professionals in 2020, and why they may not seem that altogether earth-shattering.
Many of these points are likely conversations you’ve caught wind of over the last few years. But we believe nonprofits and fundraisers who focus on these five topics and develop an overarching strategy that considers these subjects will set themselves up for long-term results as forward-minded individuals and organizations.
Without further ado, here are the top five fundraising trends for 2020 we see impacting the social sector space in the year to come. Dig in with us below.
- Big Results for Nonprofits That Embrace Flexible Work Environments
- Resurgence of the “Election Effect” as the Political Climate Heats Up
- A Call for Greater Financial Transparency and Global Effectiveness
- The Concept of Integrated Giving Empowering Everyday Donors
- The Rise of Giving Experiences and Conversations About Sustainable Impact
1. Big Results for Nonprofits That Embrace Flexible Work Environments
Barring the advent of online fundraising and technology adoption, a nonprofit’s physical workplace environment likely hasn’t seen radical changes in the last few decades. But 2020 promises big rewards for organizations paying attention to the shifting demands of their employees.
Consider the fact that Gen Z will make up 40% of the workforce in 2020, and with them come unique priorities and preferences. Gone are the days of “work-life balance,” with Gen Z seeking more flexibility and control over how they spend their time—a “work-life blend.”
It seems this desire isn’t isolated to Gen Z, with Bloomerang’s State of The Nonprofit Workplace revealing “a flexible work environment” to be the number one workplace quality desired by survey respondents. In the same report respondents ranked paid time off and paid family leave above salary when considering most important employee benefits.
Organizations that pay attention to the demands of the workforce stand to reap substantial rewards. Despite our own survey findings that 92% of nonprofit employees who are very involved in their organization’s fundraising efforts are satisfied in their current roles, other studies estimate the attrition rate of fundraising employees to be 19%, with most fundraisers leaving their positions every 16 to 18 months and costing nonprofits up to hundreds of thousands of dollars per lost team member. In fact, a recent survey for the Chronicle of Philanthropy and Association of Fundraising Professionals revealed some similarly concerning findings, such as:
- 51% of fundraisers said they will leave their current nonprofit within the next two years
- 30% said they planned to leave fundraising altogether
- 55% reported often feeling unappreciated
- 21% agreed that the negative things about their jobs outweighed the positive
With such concerning data surrounding fundraiser turnover and satisfaction, it seems clear that the organizations that place greater emphasis on what employees are asking for—flexibility—will be the organizations that rise to the top.
What’s more, nonprofits with flexible work environments also tend to offer employees the opportunity to work from home or remotely. Depending on the scale of this policy, it has the potential to reduce overhead costs and open up the hiring talent pool, no longer limited geographically. Since 2005, telecommuting has increased 140% and in Buffer’s State of Remote Work, 99% of respondents reported they’d like to work remotely at least some of the time for the rest of their career. Stanford even conducted an experiment that showed remote work decreased attrition by 50% and improved productivity.
Many leading nonprofits are already actively looking for remote fundraising employees. The American Heart Association opens development/fundraising director opportunities up to applicants from “anywhere,” and Komen for the Cure is hiring a Corporate Partnerships Officer/Sr. Fundraiser and offering a work-from-home opportunity for high achievers.
As fundraising continues to move online, a fundraiser’s role has become far less dependent on geography. Several Classy customers, such as All Hands and Hearts – Smart Response, leverage the remote work option to successfully scale their teams in a way that’s supportive of their team members’ desires. And thanks to advancements in remote connectivity and collaborative technology, there’s very little holding any nonprofit back from creating and supporting more flexible work environments.
2. Resurgence of the “Election Effect” as the Political Climate Heats Up
Philanthropy should expect to see a similar flood of donations to certain cause sectors, as was observed in 2016, in the fall of 2020 as the election nears.
Many nonprofits saw a surge in recurring subscription initiations following the 2016 election, particularly civil rights, social action, and advocacy organizations, according to Classy platform data. We also found that donors who signed up during the time surrounding the 2016 election were more valuable long-term than recurring donors who signed up during a typical week. These donors were more likely to stick around for the next 18 months, and within recurring donors to civil rights organizations, specifically, we found that the donors who signed up following the election were over 50% more likely to keep donating 18 months later.
From our own reporting we also know that recurring donors are particularly valuable, for reasons beyond just their monthly gifts. According to The State of Modern Philanthropy 2019, of all one-time donors who returned to start a recurring gift subscription, one-quarter went on to make another one-time gift as one of their future interactions. And we know from The State of Modern Philanthropy 2018 report that recurring donors are over five times more valuable than one-time donors.
The election wasn’t the only time we observed spikes in the number of new recurring plans across our platform. We looked at several periods between 2016 and 2017, including the day that Philando Castile was killed, the civil rights protests in Charlotte, and Inauguration Day. While the time following the 2016 election produced the largest uptick, all of these increases in the number of new recurring plans on Classy indicate how important it is to have a well-established recurring giving program that is ready to capture potential supporters whenever they are spurred to engage—especially in years when politics are at the forefront.
While not all organizations are impacted by political news, a well-established recurring giving program ensures you’re ready to capture surges in support that can occur in the way we saw during the last election year, whether your cause is suddenly at the center of the conversation due to political conversations or otherwise.
For nonprofits that do have clear ties to advocacy work, be sure to prepare for 2020 by establishing a recurring giving program ahead of time. Participate in the dialogue and share your established programs as ways to take action and effect change.
3. A Call for Greater Financial Transparency and Global Effectiveness
Part of staying privy to change and innovation across the space is keeping a pulse on trends still coming to fruition. To that effect, we believe the entire space should continue to have a watchful eye on two conversations in particular: donor-advised funds (DAFs) and “blockchain for good.”
Their common thread? The need for greater impact transparency and global effectiveness within fundraising and philanthropy.
Yet DAFs continue to grow at wild rates. Fidelity Charitable (the same organization facing litigation, and the biggest DAF in the country) announced in July that it had issued $4 billion in grants since January and was on target for 2019 to easily surpass 2018’s $5.2 billion total. Compared to the same time period in 2018, the amount in grants has grown 48% year over year.
But with charitable giving’s overall share of GDP remaining relatively the same for the past few decades, the question becomes: if DAFs continue to grow at this rate, will nonprofits see more and more funding tied up and delayed in reaching them?
Thankfully, 2020 promises to be a year of closely examining and better understanding this high-growth vehicle for good. Recent reports of more funds being released to charities and DAFs’ ability to act as a “stabilizing force” for philanthropy in times of economic uncertainty are promising reasons to continue the dialogue as champions of social impact, and the team at Classy is dedicated to actively contributing to this conversation.
Blockchain for Good
Though the notorious Pineapple Fund was a fleeting effort, blockchain is still very much a part of social good conversations. In 2020, I anticipate this conversation to resurface in bigger ways, especially as the public receives further details around Facebook’s GlobalCoin.
Eleven percent of total catalogued blockchain initiatives are categorized as philanthropy, aid, and donors. While many of the projects kicked off in the last five years are still in very initial stages, 55% of of social-good blockchain initiatives were estimated to have a direct impact on their beneficiaries by early 2019.
Typically, blockchain is used for facilitating payments. It has great potential to reduce risk and fraud and provide greater transparency between donors and beneficiaries by more clearly and accurately communicating the distribution of funds in real time. It will also allow for funds to move quickly in times of need, regardless of physical boundaries or borders.
Classy’s own customer Heifer International has backed a blockchain initiative, Provenance, a technology organization founded through the general manager of Grassroots, an agricultural cooperative. With Provenance, consumers can scan the barcode on their purchase at the grocery store to understand the journey of the chicken they are purchasing. Though still a small pilot program, both partners seek to learn from the estimated thousand consumers using the technology and eventually scale it in a way that provides meaningful transparency and the highest degree of trust between farmers and consumers.
In 2020, I expect the entire space, Classy included, to eagerly dive into results of these early initiatives like these and continue to explore applications from across the globe.
4. The Concept of Integrated Giving Empowering Everyday Donors
In 2020, we will see a continued upward trend in the growth of third-party intermediaries working to better integrate giving into everyday life.
In light of Giving USA’s 2019 report revealing a decline in general and mid-level donors (defined by the Fundraising Effectiveness Project as donors who make gifts less than $250 and between $250 and $999 respectively), it’s more important than ever for nonprofits to engage and retain these donors in seamless and integrated ways, like through partnerships with third-party intermediaries.
As technology continues to evolve—think things like “Alexa, make a donation,” and the advent of driverless cars and essentially a “second living room”—we’ll only see more opportunities and integrations crop up that allow nonprofits to interact with consumers through platforms like Uber, Venmo, Shopify, and Twitch. Part of portfolio diversification and integrated giving means meeting donors where they are and offering approachable, affordable ways for them to get involved. Made possible by new technology, all of these partnerships help to infuse the act of giving into typical consumer habits and experiences.
For example, in The State of Modern Philanthropy 2019, we found that donors who gave through social media were more likely to also give on social again for their next gift. Opportunities like peer-to-peer fundraising and recurring giving subscriptions give small and medium donors the chance to make a more significant impact, regardless of their own financial situations. Finding more ways to offer those opportunities within environments consumers are already frequenting—like social media and platforms such as Uber and Venmo—are how leading nonprofits will continue to build out their revenue streams in 2020 and beyond.
5. The Rise of Giving Experiences and Conversations About Sustainable Impact
At Classy, we’ve always worked to find ways to make the giving experience more personal and less transactional for donors. We believe in the years ahead that donors will only continue to look for experiences that provide authentic connections between donors and beneficiaries.
According to Ford’s recent trend report, Looking Further With Ford, consumers are craving more authentic, person-to-person experiences, and 45% said they envied people who disconnect from their device. However, devices might be one solution to further close the gap between donor and beneficiary, as organizations start to experiment with how virtual reality and augmented reality (VR/AR) might better connect groups of people worlds apart.
Volunteerism and “voluntourism” are obvious avenues for supporters seeking authentic, person-to-person experiences as they look for ways to give back. Many new programs have also cropped up to bring donors and beneficiaries together. Airbnb social impact experiences are one manifestation of this trend and an example of donors looking for new, authentic ways to give back to the local communities to which they travel. Yet as consumers continue to look for ways to “turn back technology” and engage with others in more genuine ways in the form of volunteering and voluntourism, we may have cause for concern and see the resurfacing of a long-time social impact topic—”western savior complex.”
As the pendulum swings back to person-to-person experiences, there will be a strong need in 2020 to continue open dialogue around the best and most appropriate ways to drive long-term social impact.
Supporting an open dialogue about sustainable impact also has the power to help nonprofits increase the lifetime value of their donors. Our annual reporting through The State of Modern Philanthropy has allowed us to understand how today’s supporters often engage with nonprofits in a multifaceted way and that their value develops over time. For example, in The State of Modern Philanthropy 2019, we found that return fundraisers raise over twice as much as one-time fundraisers.
We also dug into the success of our customers who far outperformed the average when it came to getting donors to come back. For Classy customer Feed My Starving Children (FMSC), one-time donors who return to become recurring donors typically do so in just 117 days (that’s 97 days faster than what’s typical across our platform). FMSC believes the key to keeping donors coming back is up-front and ongoing impact communications, and that volunteer opportunities help donors see their impact firsthand. In fact, 66% of their recurring donor base are also volunteers.
Organizations aware of and participating in sustainable impact conversations will be in the best position to fundraise in an authentic way that creates opportunities for their communities that are both genuine and appropriate.
It’s my hope that these fundraising trends for 2020 can help your organization as you map out your strategy for next year, and the years to come. Our team will continue to stay abreast of what’s coming up in the space and apply it to our own product and partnerships in order to support nonprofits in the best ways possible. I know I speak for the entire team at Classy when I say we’re excited to see how things continue to unfold and to navigate the changing times together.
The State of Modern Philanthropy 2019
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