Page 4 - Nonprofit Fundraising Guide

3 3.)
FUNDRAISING
TRENDS
A s the nonprofit sector continues to evolve, staying informed about
emerging trends is crucial for adapting strategies and optimizing
fundraising efforts. This article provides a comprehensive overview of
the key trends shaping fundraising in 2024 and beyond.
1.) ECONOMIC CHALLENGES AND OPPORTUNITIES
IMPACT OF INFLATION AND GROWING COMPETITION
In recent years, inflation has significantly impacted charitable giving.
In 2022, Americans donated $319.04 billion, a decrease from previous
years. Although individual donors contributed an estimated $374.40
billion in 2023—representing 67% of the $557.16 billion total giving—
this reflects only a 1.9% increase from 2022. However, when adjusted
for inflation, total giving actually declined by 2.1%. Major donor
contributions decreased by 10%, highlighting the need for nonprofits to
diversify their donor bases and adapt their fundraising strategies.
Despite these challenges, researchers project a rebound, with giving
expected to increase by 4.2% in 2024 and 3.9% in 2025. This anticipated
growth presents an opportunity for nonprofits to refine their approaches
and leverage the expected rise in charitable contributions.
2.) TECHNOLOGICAL ADVANCEMENTS IN FUNDRAISING
ARTIFICIAL INTELLIGENCE AND MACHINE LEARNING
Artificial intelligence (AI) and machine learning are increasingly
transforming the nonprofit sector. AI is used for donor segmentation,
predictive modeling, and enhancing fundraising strategies, aiming to
optimize donor engagement and reduce costs. However, organizations
must balance AI’s efficiencies with the need for personal interaction to
avoid alienating donors.
AUTOMATION TOOLS
Automation tools are streamlining operations, from online donations to
event planning and data analysis. These tools save time and resources
but require human oversight to ensure accuracy and maintain the
personal touch in donor communications.
Generative AI is advancing in content creation, data analysis, and donor
GENERATIVE AI
individual donor preferences, enhancing engagement and effectiveness.
segmentation. This technology helps tailor fundraising appeals to
However, data security and alignment with organizational needs remain
critical considerations.
SHIFTING DONOR ENGAGEMENT STRATEGIES 4
DIVERSIFYING DONOR BASES
A trend in 2024 is the shift from major donor reliance to focusing
on mid-level and monthly donors. Dana Snyder of the “Missions to
Movements” podcast emphasizes the importance of diversifying donor
engagement. Organizations should enhance their efforts to attract and
retain monthly donors, especially as younger generations increasingly
prefer consistent, smaller contributions.
RELATIONSHIP-CENTRIC FUNDRAISING
Relationship-centric fundraising is gaining prominence as nonprofits
prioritize genuine connections with donors. Sabrina Walker-Hernandez
of Supporting World Hope advocates for focusing on relationships rather
than transactions. By fostering authentic engagement, nonprofits can
strengthen donor loyalty and improve fundraising success.
INNOVATION IN DONOR ENGAGEMENT
Retaining donors is crucial for long-term success. Lynne Wester of
The Donor Relations Group highlights the importance of continuous
engagement through meaningful communication and appreciation.
Effective donor retention involves providing personalized updates on
the impact of contributions and maintaining ongoing engagement.
PREPARING FOR WEALTH TRANSFERENCE
Over the next 20 to 30 years, America will see the largest level of wealth
transference it has ever seen. It is expected that some $11.8 trillion
will find its way to nonprofit organizations as the silent generation and
nonprofit organizations to open up communication with both their older
the baby boomers pass on their amassed wealth. It is important for
donors, who will be transferring this wealth and their middle-aged and
younger donors, who will be inheriting this wealth. This will come down
to developing and strengthening relationships. With the top unified
credit limit (the amount that a taxpayer can pass on to their heirs)
decreasing in 2026 from $14 million to $7 million (barring a change
in the tax code), including nonprofits in estate planning discussions is
expected to increase.
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