Take Action: Fundraising Trends, Best Practices, and Strategic Planning Lessons from 1,000 Fundraisers

By Bloomerang CMO Ann Fellman and author Laurence A. Pagnoni
Bloomerang helps nonprofits deliver a better giving experience so they can raise more funds and create lasting change.

How do you measure success in a given year? In fundraising, we look at the ability to raise funds, how many new donors we gained, how many donors gave again, and the performance of specific fundraising tactics. It seems like there are always challenges in any given year, so we wanted to understand the challenges that surfaced in 2022 and how this impacts fundraisers’ future outlook. We partnered with the Institute for Sustainable Philanthropy to conduct our Fundraising Planning and Climate Report: Outlook for 2023.

Fundraiser Outlook for 2023

With the help of Dr. Adrian Sargeant, Harriet Jones-Day, James Barratt, and Kathryn Edworthy from the Institute, we surveyed more than 1,000 nonprofit professionals from small and medium-sized nonprofit organizations. The findings uncovered internal and external factors that will affect fundraising in 2023, as well as actions fundraisers can take based on fundraising trends and best practices drawn from the report. Here’s our take on these factors with key data insights from the report.

The Fundraising Planning and Climate Report’s findings show the following:

Remember, these are general guidelines, and the specific actions you decide to take depend on your particular circumstances.

• Adjust fundraising strategies: Based on the report’s predictions, consider adjusting your fundraising strategies to align with the current socioeconomic and cultural climate, and donor preferences. For example, the report highlights the growing importance of digital fundraising, so investing more resources in online campaigns and social media outreach would be a smart move.
• Segment your donor base: Use the information from the report to segment your donor base effectively. Tailor your fundraising messages and methods to specific donor categories based on their preferences and behavior. One size does not fit all.
• Embrace personalization: With the changes in donor expectations outlined in the report, prioritize the individualized touch in your fundraising communications. Craft personalized thank-you messages and updates to strengthen relationships with donors and enhance donor retention.
• Diversify fundraising channels: The report documents shifts in donor behavior and preferences. Therefore, be sure to diversify your fundraising channels to reach donors through multiple platforms, events, and initiatives.
• Prioritize donor stewardship: Focus attentively on donor stewardship and engagement to build strong, long-lasting relationships with your supporters. Show appreciation for their contributions and keep them informed about the impact of their donations.
• Invest in data analytics: Leverage data analytics to better understand donor patterns and preferences. Use this information to optimize your fundraising efforts and make data-driven decisions. All modern donor databases feature donor analytics and report generation that you can use.
• Stay agile and flexible: The fundraising landscape is changing rapidly. Stay agile and be ready to adapt your strategies as needed based on new information or developments in the fundraising environment.
• Collaborate with peers: Engage with other fundraisers and organizations to share insights and best practices. Collaborative efforts can lead to innovative solutions and improved fundraising results.
• Monitor progress: Continuously track the performance of your fundraising efforts and measure them against insights detailed in the report. Regularly reassess your strategies and make necessary adjustments to achieve your fundraising goals.

Top 4 External Factors Plus 6 Internal Ones Which Impact Fundraising

4 External Factors

The external factors are the economy, the political climate, the COVID-19 pandemic, and the death of donors, and they raise the following questions for your consideration:

1. How is your nonprofit affected by inflation, unemployment rates, the vagaries of the stock market, and fear of a recession? Are these factors relevant to your funders and donors, and should your donor correspondence speak to these issues?
2. Should your fundraising messaging be apolitical, or should your values shine through?
3. Do you have a case for support tailored to younger donors?
4. Do you have an approach suited to older donors?

It’s important to answer these questions for yourself and chart your course of action accordingly.

6 Internal Factors

1. Capacity

Fundraiser fatigue is real. Many respondents say that their team’s capacity–or lack of capacity–is one of the most important factors in determining their fundraising performance. While 74% of our survey respondents noted they are confident they will meet fundraising goals this year, capacity, specifically in the form of understaffing or downsizing makes this a tall order. This is not new information, but it does highlight the importance of self-care, as well as having conversations on what is realistic given budget and capacity constraints.

2. Board Support and Engagement

It’s a necessity for the long-term success of a nonprofit that its board is engaged and committed to supporting its needs. If board members are not giving, then it’s time to rethink. Many nonprofit professionals said they had a hard time getting their board members to engage, noting 56.5% of board members did not support any form of fundraising activity, and 20.8% had board members who did not make a gift to the organization.

Dr. Sargeant emphasizes that it’s not about the size of a contribution, rather it’s the idea that you have the full support of the board–knowing that they are committed and stand behind the organization. Only about half of the respondents indicated an “acceptable level of engagement” from the board. So, on top of capacity constraints, nonprofits are also trying to figure out how to influence their boards to engage more.

3. Leadership

Respondents expressed their concerns about frequent changes in leadership and its effect on the organization’s ability to fundraise. Roughly 33% of respondents (1 in 3) rate internal support for fundraising as below average in 2022, and they indicate that support from leadership has room to improve.

Experts say a culture of philanthropy from leadership defines behavior. On a panel at AFP ICON 2023, Kishshana Palmer, Bloomerang Board Member and CEO of Kishshana & Co., added that it’s critical to spend more time determining what your mission is and what you are trying to accomplish with fundraising and philanthropy. Get to the heart of why you’re doing the work and understand the funds needed in order to operate.

4. Strategy and Planning

You can’t fulfill your mission without a plan in place. Yet, the report revealed a whopping 57.1% of respondents don’t have a written fundraising plan. Rachel Muir, Nonprofit Founder & Fundraising Consultant shared that not having a

Without a written fundraising plan no one is accountable, progress from year to year cannot be evaluated, and no measurable goals for the future can be set.

Despite fundraisers showing high optimism for achieving their 2023 goals, the question then becomes: How do you create a culture that embraces planning and data-driven decision making? It starts with a plan, but you also need a culture that supports fundraising. Fundraising must be embraced as the vehicle to fulfill the mission. There is a fundamental tenet organizations need to embrace: Fundraising shouldn’t be treated as an expense, but rather an investment in the future.

5. Communication

Many acknowledge a need to improve communications with donors in relation to making a case for support. Recent data from The Fundraising Effectiveness Project shows a decrease in donor retention, which has been a major theme in the nonprofit community. According to our findings, some of the top external factors impacting fundraising included the COVID-19 pandemic, economy, and loss of older donors.

If nonprofits are preparing to retain donors, they need to form a strategy for re-engagement, based on both the stage of life of each donor and on meeting donors where they are.

The lines of communication come in different forms. Our survey highlights where many organizations will be shifting and devoting efforts to meet donors where they are at in 2023:

Teams know they need to address these challenges but lack the resources to figure out how to structure better communication with limited staff and time constraints.

6. Budgeting & Finance

For 2023, most respondents say the budget is dedicated to keeping existing donors: 67% of their fundraising budget is dedicated to stewardship/renewal and 33% of the budget is dedicated to new donor recruitment. In addition, results show that around 40% of organizations set their fundraising budgets in line with the resources they feel necessary to achieve their income targets. This is positive, however there are still many fundraisers struggling to get the financial support needed to authentically cultivate positive relationships with their donors.

With these factors in mind, consider the following action steps:

1. Add a Matching Gift Challenge to your Annual Gala

When a donor offers to make a substantial contribution, usually a trustee or someone who knows and values your organization and has been giving repeatedly, you should realize that a terrific opportunity has been presented to encourage giving by others. You can then confer with the donor, and, if an agreement is reached, launch a matching challenge drive following the guidelines that you and the donor work out and sign off on. Guidelines can include whom to target for the challenge, when the donor pays (up front or after the challenge is met), and how the challenge will be advertised or marketed.

2. Launch a Text-to-Give, or Text-to-Donate drive

Your donor likely has a cell phone. According to Zippia.com, there are more than 300 million smartphone users in the United States alone, and an average cell phone user interacts with the device more than 2,000 times a day. The prevalence of this communication channel makes it an easy choice for expanding donor stewardship; some donors might even prefer it. In fact, according to slicktext.com, 85 percent of customers report favoring smartphone messaging over email or phone calls. Text-to-donate is one fundraising tool you can leverage to engage your audience through their mobile devices. While the terms sound similar, text-to-donate and text-to-give are distinct categories of mobile fundraising. Both ask supporters to text a designated keyword to contribute to a certain cause. With text-to-give, the amount is pre-set and added to the donor’s phone bill. With text-to-donate, the donor can customize the amount of the gift. Several other significant distinctions exist, and understanding the limitations of text-to-give versus text-to-donate can help you choose an approach to maximize donor engagement and mobile giving.

3. Embrace Artificial Intelligence

The next wave in digital fundraising is artificial intelligence (AI), and nonprofits are sure to increase their adoption of tools like chatbots. Chatbots are friendly, automated mechanisms built into website platforms to answer questions—like an automated FAQ. Nonprofits that embrace chatbots and other artificial intelligence tools will have a leg up when donors are researching organizations that share their values and goals.

4. Plan Virtual Galas

In this new era of virtual and hybrid events, event planners should think differently about the orchestration of these affairs and how to make the virtual event as engaging as the in-person experience. During the early days of the pandemic, donors were patient with remote experiences that fell flat. Now, they expect more. As a result, work closely with event planners who understand how to make virtual events attractive and enjoyable. But remember, the same fundraising verities apply as in traditional gala fundraising. It’s essential to secure the bulk of the gifts from your honorees, sponsors, and awardees well before the event takes place.

And be advised that:

• Mega donors will play an increasingly important role: According to barrons.com, gifts from mega donors totaled more than $9.5 billion in 2020—consistent with the massive growth at the top of the wealth spectrum. While super-wealthy donors aren’t accessible to all nonprofits, they’re nonetheless having a trickle-down effect on the practice of philanthropy. Billionaires like MacKenzie Scott are quite public about their giving priorities and are shaping the way other donors think about their giving. Even if you’re not able to build relationships with the uber wealthy, pay attention to how they approach and structure their giving—since it will soon influence and reflect the priorities of your donors.
• Donor-Advised Funds will keep growing: More than $142 billion is now sitting in donor-advised funds (DAFs), a number that will continue to grow as donors keep pouring more money into this popular giving vehicle. Your nonprofit can tap into this massive pot of potential funding by using prospect research and survey tools to identify donors who channel their philanthropy through DAFs.
• Staff retention is critical: The number of fundraising jobs is expected to grow by more than 11 percent over the next decade, the Bureau of Labor Statistics informs us. The increasing demand for qualified fundraisers happens to correlate with a notable change in how individuals approach their careers. Retention has always been a challenge for nonprofits, especially when it comes to top fundraising talent. But in light of the “Great Resignation”—a 2021 phenomenon in which many workers reassessed their priorities and walked away from jobs and careers—the challenge is even greater. As a result, staff retention is one of the top issues facing nonprofit leaders. With that in mind, make sure you’re communicating regularly with your top talent, being flexible, and finding ways to ensure that they’re getting the support and resources they need to be happy and successful. You should also pay close attention to the mental health of your team and think about creating an environment that fosters positive mental health. When fundraisers feel good, they perform better—and are more likely to be satisfied with their roles.

Despite the challenges that nonprofits face, fundraisers continue to be optimistic about overcoming difficulties to reach their goals. Mindset, agility, and leadership support are needed to create and foster the giving culture, and strategic donor engagement by the entire organization will be important drivers for success.