The future of fundraising

“Giving Plunges 6% in First Quarter” “Number of donors dropped by 5.3 percent”. “25 billion in lost revenue for nonprofits”

The headlines about the latest Giving USA study are scary, but do they portend an apocalyptic future?

Capacity Partners is encouraged that donations under $250 rose by six percent during the first quarter of 2020. We also know of some nonprofits that saw their coffers swell during the pandemic; organizations providing disaster relief and pandemic-related services have seen a surge in generosity. Organizations focused on racial equity are also seeing an upswing in contributions. Of course, other organizations are realizing mergers might be their only salvation as they watch income plummet.

Foundations are still making grants, but many are shifting funding to emergency relief for basic human needs, making it harder for arts groups to get funding.  Organizations who were hoping for a grant for projects such as strategic planning may also find it more difficult to get support.

So far, virtual events are more successful than anyone thought they would be.  Hopefully that stays true as virtual events remain the norm for the foreseeable future.  It is difficult to imagine any in-person events being held for the rest of 2020, and maybe even the first part of 2021.

Right now, the rising stock market should result in major donors feeling comfortable keeping their commitments, but as we know from past experience, the market is capricious and as the economic recovery chugs along with a high unemployment rate, that could change. As furloughs become layoffs and as special unemployment benefits run out, budgets could tighten with less money available for charitable giving.

Fortunately, local and federal government grants and loans have kept many nonprofits whole in FY21; the question is what happens in FY22 as disaster relief programs end and government budgets are slashed due to revenue shortfalls.

In general, most corporations will be decreasing contributions, either cutting out all or a portion of many of their sponsorships. Capacity Partners predicts the effect on revenue will likely be in the second half of the fiscal year.

So much about future fundraising is uncertain; actually, so much about the nation’s future is uncertain. Covid-19 will be forefront in everyone’s minds for many months. The economy will remain fragile until coronavirus is controlled. Politics and the November election will generate stress-inducing headlines. All this is true, but equally true is the remarkable power of resiliency, caring, and determination.

Our advice? Stay close to your best donors. Stewardship is more important than ever. Don’t forget to give some of your attention to new donors, too.

In 2019, even though it feels like a lifetime ago, charitable giving showed solid growth, climbing to $449.64 billion, making that year one of the highest for giving. Capacity Partners believes that in good times and in bad, people will donate to the causes they believe are critical. Mary Robinson, Founder and President of Capacity Partners says, “Yes, even in a pandemic and in a period where unpredictability is the only thing one can accurately predict, people will give to the causes they care about.”

In a couple of weeks, we will be conducting a survey of nonprofit leaders to enable us to do a deep dive into the current state of the nonprofit sector in the DC metro area. We hope you'll participate in this brief survey so we can better understand the current situation and make recommendations to nonprofits as they navigate these unprecedented times.