The latest GivingUSA report on charitable giving in the United States is out.
What do smart fundraisers, particularly those heading up “one-person” development shops, need to know?
Charitable giving in the U.S. declined by 2.1% in 2023 after adjusting for inflation.
Nonprofits have been concerned about the decreasing number of American donors for years, and the 2023 report reinforces these worries. Individual donations dropped by 2.4%, with their share of total giving slightly decreasing from 67.4% in 2022 to 67.2% in 2023, down from 73% in 2013.
In 2023, foundations contributed 19% of overall giving ($103.5 billion), bequests accounted for 8% ($42.7 billion), and corporations made up the remaining 7%.
Despite the decline, there are signs that charitable giving might be stabilizing after the impacts of the pandemic and record inflation.
In contrast, the Giving USA Foundation’s annual report highlights that donations rose to $557.16 billion in 2023, a 1.9% increase over 2022. However, once adjusted for 4.1% inflation, this represents a 2.1% year-over-year decline.
Donation Sources:
Individuals: Donated $374.4 billion, a 1.6% increase from 2022, but a 2.4% decline when adjusted for inflation. Individual giving remained at 67% of total giving, though it fell below 2% of individuals’ disposable income.
Foundations: Contributed $103.53 billion, making up 19% of total giving. Despite a 1.7% growth in current dollars, this equates to a 2.3% decrease when adjusted for inflation.
Bequests: Accounted for $42.68 billion (8% of total giving), showing a 4.8% increase but remaining flat when adjusted for inflation.
Corporations: Donated $36.55 billion (7% of total giving), a 3% increase but a 1.1% decrease when adjusted for inflation.
What does the future hold?
The economic outlook predicts growth in philanthropy for 2024 and 2025, with expected increases of 4.2% and 3.9%, respectively. This could push total giving beyond $600 billion by 2025, even after accounting for inflation.
The good news
“Despite the challenges, Americans increased their giving in 2023,” said Josh Birkholz, chair of Giving USA Foundation. “While not yet at pandemic-era highs, there are signs of stability.”
But what does GivingUSA mean for you?
Statistics are used much like a drunk uses a lamppost: for support, not illumination.
Vin Scully
The overview provided by the GivingUSA report is always good to have. Indeed, the report has always played a role in the Simple Development Systems’ Ask+Thank+Report+Repeat model, which skews toward building your strong base of individual giving (AKA general operating support). Taking precedence — for instance — over grants or business support.
But what’s missing in GivingUSA is YOU.
Your unique mission and the niche you provide. Your unique donor base and the connection you have with those donors.
What can you do to prosper in these unsettling times?
1. Stay the course. Develop a balanced, thoughtful fundraising plan. One that includes realistic goals for grants and corporate support, individual support, program support, and events.
Important: Invest in donor stewardship and reliable data.
Include new donor acquisition in your plan. And a budget for it.
2. Retain staff. This one is key. I have worked with nonprofit organizations who’ve had – seriously – five development directors in three years! How can an organization have any kind of continuity with donors with that kind of record? Staff your organization with quality individuals and do your level best to keep them. If you’re not sending your development staff to workshops, classes, and seminars, you’re doing your organization a grave disservice. Download Encouraging Longevity in Nonprofit Development to discover the secrets behind employee retention.
3. When it comes to foundation grants, stay on top of your research. Foundation giving showed an increase in 2023. Make it a practice to routinely scope out new sources of foundation funding. I was recently asked, “Well after so many years, don’t you run out of new potential foundation funders?” The answer is a resounding “no!” Not if you keep your eyes and ears peeled and engage in consistent research.
Develop a system where you’re sending out proposals or letters of inquiry to new foundations on a weekly basis. Build relationships.
Important: If yours is a small, community-based nonprofit AND is grant-ready, consider outsourcing.
4. Focus on Your Monthly Giving Program. Recurring giving continues to grow. Stanford Business noted that “Every Business Will Soon Be a Subscription Business.” And Jeff Bezos built Amazon on the Prime membership model.
Important: Make monthly giving a priority. Subscribe to Erica Waasdorp’s weekly newsletter or consider enrolling in Mastering Monthly Giving | Basics & More™.
5. Refine (or redefine) Your Story and Case for Support. What is your organization’s “emotional hook?” Your nonprofit’s “story” –- not the latest statistics — is what compels donors to give to you. Talk to your board members, talk to your clients, talk to your staff, and talk to foundation funders and individual funders to find your emotional hook. Enroll in Nonprofit Storytelling | Basics & More, the first and most comprehensive storytelling class created specifically for the nonprofit sector.
6. Invest in donor care and consistent stewardship. Now is the time to set aside an hour, two hours — whatever you can spare — every week to both phone and visit key donors one-on-one. Don’t make that age-old mistake of only querying your donor database for your largest donors — pull up your most loyal donors and thank them, profusely.
Focus on your organization’s most loyal donors – take them to lunch.
Never omit your thank you letters because you think (wrongly) that it’s cheaper not to send them.
7. Focus on your organization’s data health. All donors are not created equal. How can you use data to show all your donors love, while still being strategic? Check out our MotivateMonday recording. T. Clay Buck, CFRE, joins us to present Focus on What Matters (A data-inspired look at setting fundraising priorities). Once you discover the power of deep segmentation, you’ll want to go on and on.
8. Commit to new donor retention. What happens when a first-time donor makes a gift to your organization? The research shows that the vast majority of major donors arrive via an initial $25 gift. What kind of reception are they getting? We’ve got a free timeline to help you figure out your best strategy. Download it here. No opt-in is required.
Know your nonprofit’s numbers. What is your donor retention rate? What percentage of gifts come in offline versus online? How are you measuring ROI?
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