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On the Cusp of Change

by | Nov 4, 2021

aud recently released a fascinating report entitled “Tipping Point,” that examines what the company sees as an all-encompassing transformation of the fundraising industry. Based on interviews with 1,168 nonprofit professionals and 1,024 donors, the research seeks to shed light on three “big questions:”

  1. How did donor and organization behavior change over the last two years?

  2. What clues might these insights provide us for the future?

  3. How do nonprofits need to prepare for the changing fundraising environment?

Much has been written about the effects of the pandemic on fundraising. Throughout the past two years, we’ve gone from the initial handwringing over disaster to a (sometimes astonishing!) realization of gains. As I’ve written before, nearly all recent trends have been positive: the number of donors is up, retention rates are up, revenue is up. This study looks beyond those baseline numbers to build a better understanding of current trends.

You may find some trends surprising.

  • While more than one-third of donors said they increased their giving, more than half of Gen Z respondents and nearly half of Millennials reported growth. In addition, the increase was most pronounced among Black and Hispanic households.

  • Nearly half of donors reported giving to a new charity in 2020; more than 60% for Gen Z and Millennials.

  • A third of these donors say they’re likely to give to the new organization again; almost as many will consider becoming a monthly donor.

All good, right? But not without challenges! To effectively engage this new pool of donors, organizations may need to re-examine donor development strategies. As the authors point out, “The direct marketing model still widely used by nonprofits today was created by and for the generation that preceded the Baby Boomers.” (Ouch!)

Some examples:

  • Donors expressed an interest in a multitude of digital engagement options (social media, videos, eNewsletters, etc.)

  • More than half of donors expect virtual engagement options; Gen Z and Millennials want virtual as their “only” or “mostly” option.

  • Most younger donors prefer personalization … not just a name in salutation or remembering a birthday, but expecting you to know and respect content, channel and frequency preferences.

At its core, this report challenges organizations to consider how (or whether) the investments they make today (in staff and systems) will prepare them for the future. And it cautions, “tomorrow is not going to look like yesterday.”

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