Ever since John Naisbitt wrote “Megatrends: Ten New Directions Transforming Our Lives” in 1982, we’ve had a compulsion to predict the next big things—those long-term trends that drive other trends and have a significant impact on, for example, an industry or society.
I’ve never been strong at prediction—I suppose just keeping up with what’s happening today consumes all my brain capacity. But recently, I’ve been thinking about five things that are impacting fundraising in specific and nonprofits in general. These aren’t going to go away no matter what happens in Washington, D.C., so I challenge you to think about them as you plan how you will make 2017 your best fundraising year possible.
1. The number of nonprofits has increased competition and exponentially increased the problem with differentiating.
Today, everyone is competing with everyone else who has a website. Google “donate feed hungry people” and you’ll get 1.65 million results; other than two paid advertisements, none on the first page of results were for my local area. In reality, even a regional nonprofit is competing with everyone who has an internet presence. That means we have to ask the question: What do we do that sets us apart? That’s the message you have to repeat everywhere.
2. Nonprofit organizations have to be nimble now more than ever.
We’re inundated with studies that show that Baby Boomers and Millennials give differently and engage differently. Even a small nonprofit that wants to be healthy and growing can’t afford to limit itself to just one or two fundraising methodologies, or to only the ones that are the least expensive. Instead, we have to ask: Who are our donors? Who do we want to attract as donors? What are their preferred communications channels?
3. The cost to acquire a donor is very high.
On the other hand, the cost to communicate is low—but likes and thumbs up don’t help you meet payroll. We can’t just talk to people and get them to engage (rather passively, as a rule) and hope that they will somehow, miraculously, become donors. We have to somehow be (almost) everywhere and do (almost) everything (see the prior paragraph), but our focus has to be on finding ways to acquire new donors, keep them and cultivate them into a deeper relationship that results in expanded giving. Otherwise, we can’t justify investing to acquire new donors.
4. Donors don’t trust us (or just about anyone else), leading to low retention.
Further research points to a trust problem. When it comes to solving society’s problems, nonprofits fare far better than government, but we’re still not considered capable of “fixing” things by a majority of people. How can we change that? Robert Chen published a blog titled “101 Simple Ways to Build Trust,” several of which make sense for nonprofits. For example:
- Ask others to endorse you.
- Be accessible.
- Deliver what you promise.
- Give proper feedback.
- Value the relationship.
What will you do differently in 2017 to whittle away at the distrust your donors and prospects likely have at some level about your organization’s ability to deliver on its mission?
5. Donors are worried about overhead, but they don’t really understand it.
Most of the conversation about overhead is taking place at nonprofit conferences and in our own industry publications. Too many donors still believe three simple “truths” (that really aren’t true): 1. Overhead is bad. 2. Almost all nonprofit organizations have terrible overhead. 3. Overhead is the main thing to consider if you are thinking of making a donation. So many nonprofits respond by trying to minimize overhead (often to the detriment of their organizational health), and some even promise that if you give, there will be no overhead. (But we all know someone is paying for overhead, unless some very creative accounting is taking place.) So, take an honest look at your overhead. Is it enough to keep your organization healthy and growing, or are you starving because of a lack of investment in infrastructure? Assuming your overhead is not obscene, ask these questions:
- How does overhead contribute to the successful fulfillment of our mission?
- How much overhead would our donors consider acceptable?
- If we increased overhead by 1 percent or 2 percent, how much more mission could we accomplish?
I can’t tell you the answers to these questions, but I urge you to begin 2017 with some honest soul-searching and—if it’s merited—a commitment to invest a bit more in overhead to achieve more mission. Then, couple that with a strategy to be transparent with your donors about overhead and show positive proof how it is improving your ability to fulfill your mission.
What will 2017 hold for fundraising in general and your work in particular? This old dog doesn’t pretend to know. But I encourage you to ask the right questions as you look toward the new year. I’m optimistic about 2017 (optimism is my character flaw), but I also know that optimism on its own isn’t enough. We have to work hard and stay focused to create the reality we envision for our fundraising programs. Even then, it may not happen, but let’s fight on in 2017 and celebrate the opportunities we have to make small (or even large) differences—despite the megatrends that challenge us every day.
Originally published in NonProfit Pro.