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Top five fundraising trends 2020

January 14, 2020By

While we don’t have a crystal ball to peer into the future, we do have some pretty insightful industry experts at Traction on Demand. We enlisted the help of Emily Eakin, Nonprofit Principal Strategist, to talk through her top five nonprofit fundraising trends for 2020.

#1: Digital transformation

Similarly to the commercial world, in 2020 nonprofits will continue to reimagine how they do business and push for digital transformation.

According to Salesforce, digital transformation “begins and ends with how you think about, and engage with, customers”.

The implications for digital transformation in the nonprofit space are huge, as we focus on a donor-centric model where we collect and leverage data to create a holy grail, a 360-degree view of our supporters. Because the best experience is now the expected experience, donors and supporters expect nonprofits to engage at the same level as the commercial industry leaders like Amazon and Starbucks — with an “always-on” approach.

In order to compete in this new era, many nonprofits will need to:

  • Improve internal collaboration — Start by breaking down existing internal silos (marketing and fundraising really do need to get along!). A digital transformation is more than technology; the number one priority should be on the people and processes, this is a business transformation.
  • Focus on innovation — Nonprofits must embrace innovation, testing and trying new ways to engage and fundraise with supporters and donors. Not everything will work — but piloting, failing fast and embracing new ways of working are fundamental to survive and thrive this decade.
  • Leverage better technology to improve automation — Whether it’s creating a self-service portal for donors and supporters to update information, leveraging AI to create a personalized welcome or adding chatbots to help with customer service, it’s important that all nonprofits understand the value of investing in technology to improve user experience.

#2: Shift from transactional fundraising to relationship-based

The evolution from an old-school transactional fundraising model (think memberships and direct mail) to a relationship-based fundraising model, where donors are cultivated and stewarded, will continue in 2020.

Relationship-based fundraising is all about building long-term, sustained relationships with donors, rather than one-off donations each time someone is asked (remember that fundraising 101 principle that so many still struggle to implement of seven touchpoints between solicitations).

More and more we see entire households wanting to be engaged in fundraising activities and they demand a personalized experience. With increasing competition in the nonprofit space and continued low retention rates (on average 46%), most nonprofits know they need to improve the lifetime value of their donors by improving retention.

In 2020 we expect to see a broader focus on stewardship and engagement strategies through technologies that support these efforts and predict many nonprofits will have a renewed interest in growing their major and mid-level fundraising programs. Such efforts could include:

  • Leveraging engagement data and analytics to create a more personalized experience.
  • Improving automation tools to implement broader journey and experience mapping across constituents.
  • Focusing on donor coverage, growing the overall donor file through both acquisition and retention.

#3: Changing demographics

While the numbers vary greatly, between $15 trillion and $68 trillion, there is no denying that we have begun the global phenomenon known as the Great Wealth Transfer. According to a report published this year, between now and 2030, it’s expected that at least $15 trillion of assets will be passed down the generations by the world’s richest people. This means that by 2030 millennials will hold five times as much wealth as they do today.

According to a 2019 report by Giving USA, the implications of this transfer on nonprofits will be profound. While donors still give to 3-5 charities regardless of demographic, many younger donors gravitate to different types of charities:

  • Different causes — Today millennials are giving more to international affairs and environmental groups. They also tend to give less to academic institutions (their alma-maters often are less appealing because they already have enormous endowments).
  • Different organizations — This group is often looking for more digital, innovative organizations (think charity: water) and unique causes and opportunities (Ice Bucket Challenge).
  • Different expectations — Millennials are more interested in transparency, volunteering, online interaction, and often use social media as a source of inspiration.

#4: Online giving and new channels

Online fundraising is certainly nothing new, but the trends continue as more donors move online. Furthermore, in 2020, we can easily predict that donors will continue to give more via mobile devices.

  • Mobile-ready — Certainly all nonprofits at this point are expected to be mobile-first, assuming that their donors and supporters are most often engage with the organization via mobile phone and online experience (rather than a desktop web or offline experience).
  • Email is still king — Email continues to be the cornerstone of digital marketing campaigns, 2020 could be the first year that more emails are opened on a mobile device than a desktop or laptop environment. Expect more automation and interactivity (i.e. calls to action such as ‘volunteer now’, rather than ‘donate’ buttons and more user-generated content).
  • Donor/supporter-centric — Donors and supporters continue to want to feel heard, engaged, empowered and trusted. In 2020 expect to see more nonprofits improve and expand their content marketing opportunities (through blogs and social media). We also expect further trends around empowering supporters to update and manage their own data and information through portals and online tools.
  • Online fundraising retention — This will be the biggest focus in the coming year as more monthly recurring donation programs expand and grow to improve online giving retention and maximize the lifetime value of existing donors.
  • New tools — We expect even more widespread piloting and expansion into newer channels for both personal and automated engagement and fundraising such as SMS texting and gamification.

#5: Data

We expect many nonprofits to focus on improving how data is stored, managed and leveraged in the coming year. To achieve a 360-degree view and true digital transformation, all organizations need to:

  • Breakdown the silos — Look across platforms and systems to figure out how to better prioritize and leverage data that will improve the donor experience. This includes improving internal collaboration and information sharing across departments, teams and programs (yes, development, you really do need to work with marketing!).
  • Focus on data privacy — New regulations around the storing and use of personal information (General Data Protection Regulation (GDPR) and the new California Consumer Privacy Act (CCPA) is driving this.
  • Improve data security — As data privacy is becoming one of the defining social and cultural issues of our era, many nonprofits are prioritizing the need for improved data security and management to ensure transparency, accountability and ultimately to maintain the trust of their donors and supporters.

If you’re looking to stay ahead of fundraising trends for 2020 and beyond, sign up to the Tech Samaritan — our nonprofit newsletter for all the latest news, updates and events.

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