5 Fundraising Trends to Watch in 2023
This past year, an international humanitarian conflict, major legislative changes, devastating natural disasters, and 40-year high inflation rates dominated headlines and our attention. These events raised demands for the nonprofit community and continued to fuel donor engagement, ignited by unprecedented supporter activation during the height of the COVID-19 pandemic.
Throughout the year, we heard insights from our nonprofit and technology ecosystem partners that deepened our understanding of the social sector’s opportunities and challenges. We also conducted research, shared in our annual reports, including Why America Gives and The State of Modern Philanthropy. Now, as part of GoFundMe, we have the broadest view of the donor landscape to date that accounts for both giving to individuals and organizations.
I’ve synthesized all of these inputs into five trends I believe nonprofits can use to create proactive strategies to raise more in 2023.
1. Fundraising Will Require Precision to Break Through the Noise
Donors are often inundated with requests to give. Consider the requests that occur on an average day—donors round up a bill at the grocery store, receive a donation appeal through email or social media, and find a pamphlet about an organization in the mail. With so many methods of giving available to today’s donors, you will need to break through the noise with a clear message on the specific channels that reach your donors.
Focus on data specific to your target cohort of donors to inform which interactions are most likely to result in donations. Understand your target donor’s daily interactions and influences, such as their demographics, careers, location, friends, and family. We’ll see advanced A/B testing capabilities, marketing analytics, and audience segmentation become a greater focus in the coming year as organizations hone in on their ideal audience. New opportunities will be unlocked when a nonprofit knows where to place an impactful message and what that message should contain to align with its donors.
2. Privacy Controls Will Promote High-Quality, Targeted Marketing
As privacy controls increase, creating valuable, relevant content that targets the right audience becomes even more critical. Generic marketing campaigns will lose their effectiveness in garnering donors and hinder your ability to reach and engage the right audience. We’re already seeing this in some of our marketing channels. Take email, for example. It’s becoming even easier to unsubscribe to emails as Apple and Google develop banners at the top of emails and prompts asking whether you’d like to unsubscribe. If your content is not customized toward the individual, you risk getting left behind.
Additionally, as more donors opt out of data sharing, the transparency of how and where you are using their data will become even more important. By increasing the trust in your organization and your data collection practices, you’ll make donors more likely to share their data willingly.
3. Charitable Funding Will Further Diversify
We see the definition of giving evolving to include not only monetary donations to organizations but also donations given directly to individuals through platforms like GoFundMe, and non-monetary gifts such as volunteering time or the contribution of goods.
As younger generations inherit wealth from Baby Boomers, the ways in which these younger generations give will continue to evolve the fundraising landscape. We see, for example, that Millennials and Gen Z prefer to be more hands-on with their investments, with 40% checking their investments daily.
As these generations earn and inherit wealth, they are more likely to turn to investment-based giving such as stocks, Donor Advised Funds (DAFs), and cryptocurrency. Almost 60% of millennials own cryptocurrency or stock, and younger generations are twice as likely to give through structured vehicles, such as DAFs. As you look to diversify fundraising at your nonprofit, donations through DAFs and non-cash gifts will be particularly fruitful as those gift options are typically much larger than cash gifts from the same donor.
4. Nonprofits Will Trade Custom Platforms and All-in-One Solutions for Specialized Partners
The time, development, and resources required to maintain and keep up with the latest technological advances will outweigh the benefits of a customized solution.
Similarly, while the concept of an all-in-one solution seems like it would promote ease of use and time-savings, in reality, it lacks the flexibility and agility to match the pace of technology. An all-in-one solution’s reliance on acquisitions means that its extensive list of products does not easily integrate with one another and is not updated to keep up with the latest advancements.
In its place, nonprofits will lean on technology partners specializing in certain areas. We’ll see nonprofits leverage the latest technology and insights by using multiple vendors that excel within their function to uplevel their technology suite and overall strategy.
5. Technology and Partnerships Will Drive Human Resource Priorities
You might be one of the many nonprofits seeing heightened competition (and turnover) of employees with expertise in high-priority tools and systems. By leaning on technology and partnerships to automate tedious, day-to-day operations, employees will be more likely to stay on board.
Instead of seeking out talent based on experience with the platform, we’ll see talent sought out for their expertise in a particular function, such as digital marketing, and their ability to learn quickly as systems innovate. Organizations will look for intuitive, easy-to-adopt technology to pair alongside strong digital partners that support scalability in areas such as SEO, paid advertising, email marketing, and A/B testing.
Nonprofit Fundraising Trends and the Year to Come
I see so much opportunity ahead for the social sector. As a new generation of donors emerges to redirect fundraising efforts, as the pace of innovation quickens for fundraising technology, and as the way you build relationships with donors strengthens from precise, targeted marketing, 2023 holds a lot of promise. I hope these trends help you take on the new year with a critical lens to identify new ways to support your nonprofit and raise more for your mission.
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