After years of research showing the need for additional investment in technology, staffing and strategic planning, the nation’s nonprofits have made strides in these areas that experts say are critical to successful fundraising. Unfortunately, new challenges have arisen—including demographics and job churn—that are hampering charities’ abilities to fundraise, providing an opening for corporate donors interested in helping their nonprofit partners build capacity and sustainable long-term growth.
According to research by SEI Inc., an investment management firm, most nonprofits have invested in resources, technology and culture to support fundraising success; spend enough on advertising and awareness campaigns; and have sufficient staff dedicated to fundraising efforts.
But these investments aren’t enough to address the looming retirement of baby boomers and the influx of millennials, who don’t give at the same rates and levels. Per the company’s research:
- Gen Y, with 32.8 million donors in the United States, represents about 11 percent of total donations. About 60 percent of this group gives to charity, with an average gift size of $481.
- Gen X accounts for about 39.5 million donors, representing about 20 percent of total giving. About 59 percent of Gen Xers give to charity, with an average gift size of $732.
- Baby boomers, with some 51 million donors in the United States, account for about 43 percent of total giving. Nearly three-quarters of them—72 percent—give to charity, with an average gift size of $1,212.
- Matures—those born before 1946—account for about 26 percent of total giving. There are about 27.1 million mature donors in the United States. Roughly 88 percent of this generation gives to charity, with an average gift size of $1,367.
As boomers and matures age out, nonprofits will need to invest even more resources on deepening relationships with millennials and Gen Xers, which represent some 72 million people combined, according to Mary Jane Bobyock, managing director of the Nonprofit Advisory Team at SEI.
“There’s a lot of upside potential to these two groups,” Bobyock said. “If you can cultivate relationships with them, that’s a lot of new money coming in” that nonprofits could vie for, she said.
Aside from demographics, turnover in the fundraising department is also taking a toll on nonprofits’ fundraising revenues. According to the SEI report, nearly half of nonprofits surveyed reported turnover in their fundraising departments within the last six months.
“Most of that is due to the usual reasons—lower pay and benefits compared to the private sector,” Bobyock said.
Another issue nonprofits face is a narrative that’s been put forth in the media that money spent on fundraising is somehow wasteful spending, she said.
“It’s perceived as taboo if funds don’t go entirely to purpose-related expenses,” she said. “In reality, there are many other things that need to be done within the organization that aren’t purpose-related.”
This is where corporate donors can play an important role, Bobyock said.
“Businesses inherently understand these things—the need to spend money to grow revenues,” she said. And, businesses are also likely to be savvy when it comes to some of the technology, communications/marketing and other things that form the basis of a successful fundraising operation.
Thanks to the increasing interest in skills-based volunteerism and pro bono services, many companies are in a position to put their human resources to work along these lines, as well as, or in lieu of, contributing on a cash basis.
“There are more and more corporate giving strategies in play every day,” Bobyock said. Businesses are now realizing they can help nonprofit partners in many ways, not just by writing a check. For example, having a firm’s in-house communications team working on a charity’s email fundraising campaign could help bring in much more in terms of donations than the company would otherwise contribute. Similarly, lending the firm’s IT employees to help build a donor database or optimize a nonprofit’s website for mobile donations could go much further than a cash donation to the organization.
And research shows that businesses reap clear benefits from these arrangements, Bobyock said, mainly in terms of employee engagement.
“You could be looking at a clear win-win where the company, its employees and the nonprofit all benefit,” she said.
For more information, visit http://www.seic.com.