Individual Giving to Nonprofits is Down again in 2022
Every year The Giving Institute publishes its Giving USA report on the state of philanthropic giving in the US. Although there were bump-ups in giving during the pandemic, especially from very wealthy individuals, the report is clear that overall rates of giving by individuals have continued to decrease every year since the early 2000s. That’s why it’s so important to build your individual donor program.
A recent article from the Chronicle of Philanthropy How Fundraising Can Bring Americans Back to Giving— if It Changes illustrates the point. It provides some great data for nonprofit leaders to consider.
(There is a paywall here, but this publication is way worth the $110 annual subscription if you want to build a serious donor base of support! Plus, you can try it for 4 weeks for free. Disclaimer: I get nothing if you decide to subscribe.)
The Statistics
‘Today fewer than half of all American households give to charity, down from two-thirds in the early 2000s. That is 20 million fewer households giving’, as shared by the Chronicle.
Foundation giving as a share of total giving is way up over the last 40 years, rising from 6% to 19%, but it still dwarfs total giving by individuals even with these consistent annual declines. In 2021 individual giving still made up 67% of all giving in the US. (Giving USA 2021 study)
The Chronicle further shares, “There is a fair amount of data that suggests the flow of generosity has not stopped, but people are channeling it in new ways. Nearly a third of Americans give money to structured community organizations that aren’t registered charities, such as mutual-aid groups or rent-relief funds, according to new research from GivingTuesday.”
People are also giving directly to individuals (think GoFundMe – which has grown tremendously in use) and to other loosely organized groups.
The act of giving hard-earned dollars to those in need may feel more direct and impactful giving to individuals and such groups (even though there is generally much less accountability required of them).
Further, “donor-retention rates have fallen from about half to around 43 percent over the past 15 years. Nonprofits can attract donors, it seems, but are not so good at building the relationship that makes them want to give again,” says the Chronicle article.
An Opening for YOU
These statistics are worthy of deeper study. I do believe, as does the author of the article, that this is a HUGE opportunity for nonprofits willing to be more intentional in developing relationships with individual donors.
The bottom line, most nonprofits SUCK at this.
That’s why this may be THE time to build your individual donor program.
For one, its so easy to stand out from your peers, big and small.
From the very small $50,000 start up to $200 million institutions, few organizations care to build and nurture heart centered genuine relationships with individual donors. Most typically, take individual donors largely for granted.
If you are part of the HIGOL community, we know you want to develop a sustainable organization for the ages, that achieves real community impact and has the revenue to sustain it.
This is truly an opening for you.
The Best Story from the Chronicle: The Houston Food Bank grows Individual Donors by Over 100% in Two Years
Not so long ago, a recently hired young fund-raiser at the Houston Food Bank started sending food recipes to individual donors. This simple act created an opening for herself and the organization to develop genuine relationships with donors.
Over two years, she took every opportunity to connect with donors in some way using creative emails and video. She often shared specific stories of the impact their work was having on families and individuals. She sent birthday wishes out with cake recipes – right on time! The message was ‘we see you and we care about you’!
She started to put small calls out for emergency requests during disasters. People were thrilled to be able to help.
Over that two-year period, individual donors at the Food Bank increased from 2,000 to 5,000. She started receiving unsolicited gifts.
I love this story.
It illustrates simple yet profound success. People are dying to feel like they are part of something bigger than themselves. We crave a sense of community.
If you can provide this for us, it is valuable beyond words. It opens the door to big generosity. AND this can become a powerful path to financial sustainability for your organization.
It can help ‘recession-proof’ you.
Thousands of donors in a growing community may be the BEST possible insurance in the uncertain turbulent times we face.
Concern around the state of our health, future pandemics, the economy (and stock market) no one can figure out, and wholly unpredictable politics clearly may affect foundation endowments payouts and government support in the future.
Plus, strong individual giving programs give people hope and a productive way to channel their energy in these times.
What Next?
Are you interested in developing, growing and strengthening a reliable base of individual donors?
If yes, what are some tangible next steps you can take?
First, know your history.
- Have individual given to your organization in the past?
- Whether there are five or five thousand – who are they?
- How much have they given?
- When did they last give?
- Do you know specifically what motivated them to give?
If you don’t know the answer to the last question, invite them to a conversation to find out. Share with them updates on the work of your organization and stories of its impact. Just be in touch in the most personal way you can, especially with those who have given the most in the past.
From there, ideas will likely see how to build on donors’ interests that align with your vision, purpose and goals. Invite them to engage more deeply. Create opportunities (beyond check writing) for them to do that.
Reach Out
If you would like a thought partner to help you brainstorm what a good plan for engaging individual donors might look like for your organization, reach out to us. We are happy to engage with you in a complementary 45-minute strategy session to do just that.
There are also tons of resources at the Chronicle of Philanthropy to help you build your individual donor program.
Go ahead, take some action. Build the momentum you need to move towards a more sustainable organization.
