The United States of America holds a special – and perhaps privileged – place in global fundraising, exerting an influence that extends much further than its 50 states.

Philanthropy has been a core tenet of the United States since our earliest days. Many of our social, arts, and philanthropic institutions are the direct beneficiary of generous philanthropists who saw their role in shaping the communities around them. While evidence of philanthropic generosity abounds, fundraising as a more ‘formal’ activity started a little more than 50 years ago.

It really has been only over the last two decades or so that fundraising has grown in professionalization with formalized training and career track. This is due, in large part, because fundraising’s importance has grown, evolved, and adapted in response to an ever changing economic, social, and political landscape. This Critical Fundraising Report is our perspective of key issues and trends that affect fundraising in the US. 

State of public trust and the nonprofit starvation style

Donor trust in the nonprofit sector has been stagnant since the early 2000s. Reports by the media in the late 1990s of mishandling of funds by a few organizations prompted wider questions about how nonprofits spend their budgets.

As a result, operational capacity is perceived less favorably than direct program investments, although each is equally important for long-term sustainability. Thus nonprofits feel compelled to limit their operating costs to appear more attractive to donors. But by doing so, they compromise their ability to produce results, scale, innovate, and have reserves.

Recommendations

1. Nonprofits must honestly assess what financial resources they need to perform at their highest degree. They should be candid and clear in forecasting how that increased funding in non-program costs will strengthen them as an entire organization and lead to longer term sustainability.

2. The sector should critically investigate core assumptions in giving. As the tax reform bill surfaced in various iterations, nonprofits were quick to sound the death knell of the sector. While it’s unclear whether a decrease in charitable giving will occur and the job loss numbers seem to be unsubstantiated at best, few if any interrogated the real issues, opting rather to defensively posture to prevent a perceived loss. The sector should have serious, unbiased, and self-aware discussions about whether the charitable deduction is actually charitable, whether the sector does what it is intended to do, and whether nonprofits are operating as effectively and efficiently as possible.

The current and anticipated fundraising talent crisis

Nonprofits are not keeping less experienced fundraisers any longer than they have in the past 20 years. And there is no sign the problem is getting better. The average tenure per job for fundraisers under 10 years of experience remains very close to steady over 20 years, at about 2.5 years. There seems to be a significant lack of investment in professional growth of fundraisers by their employer nonprofits and the institutes that fund them.

Recommendations

Nonprofit CEOs and senior leaders need to:

1. Implement plans to reinvigorate their employee advancement and recognition strategy.

2. Address their intention to professionally develop the abilities of their youngest staff and make it known that they personally care for the success of the individual fundraiser.

3. Encourage women, and racial and sexual minorities to apply for lower tenure jobs and open the ranks of the senior levels to diverse populations.

Defining standards for fundraising

The definition of who is or is not a fundraiser is not clear and may include all those who raise funds in some capacity. Are they all ‘fundraisers’? This invites a larger question: is fundraising a well-defined profession in the United States? If not, what does that mean for the nonprofit sector?

Recommendations

1. A set of standards for professional practice in fundraising, distinct from those set by professional associations or other membership bodies for fundraisers, should be established. These standards would define a global code of best practice for fundraising and also include required levels of knowledge and education.

This would create a framework for employers to use when hiring for fundraising roles, as well as a guide for aspiring fundraisers to follow in preparing or building upon their careers. This also would eventually lead to protection of the sector from unqualified practitioners who could damage the reputation or productivity of their organizations through uninformed actions in their pursuit of donations.

Diversity, inclusion, and gender equity

Calls for diversity, inclusion, and gender equity have reached mainstream media prominence in the last decade. The nonprofit sector’s shortcomings may turn up fewer hits among headlines, hashtags, and smear campaigns than the commercial sector; however, structural exclusion and systemic inequity permeate the field. The third sector’s re-inscription of white, male, cisgendered, heterosexual dominance ensures the persistence of a stagnant philanthropic culture in the US.

Recommendations

1. The academic community has already identified a need for more research on demographic differences in giving. In addition to studying the impact of race and other demographic factors on giving (and equity) in the status quo, we should also attempt to impact the trajectory of such impacts and study the success of such interventions.

2. Nonprofits with the budget capacity to fund research informed diversity pipeline projects should do so. Those without these resources should take advantage of the many free or low-cost mechanisms available.

3. Individuals need to make an effort to change inequitable norms, especially those belonging to dominant groups. Actions and behaviours could include mentoring someone who is different to them, learning about microagressions and how they impact the health and wellbeing of their victims, and creating inclusive working environments and teams (see s6.6 for the full list or recommendations).

4. Codify new individual behaviors into policies and protocols adopted by organizations, such as:

• Adopt a policy and/or protocol that ensures diverse outreach strategies for job postings, board recruitment, and donor prospecting.

• Use a rubric to evaluate job candidates rather than relying on impressions.

• Adopt an affirmative action plan (in accordance with laws and regulations).

How data, technology and social media are affecting fundraising

As in all industries, the technological tools available to fundraisers now are myriad and offer solutions to nearly every aspect of fund development. However many nonprofits cannot afford or do not have the expertise or knowledge to implement tools that would drastically increase their fundraising results. Many practitioners may not even know that the resources exist.

Recommendations

1. Fundraisers need to invest in multi-channel comprehensive communications. Standard mail, email and phone are no longer viable stand-alone methodologies and donors of all generations are using multiple platforms for all their communications.

2. Fundraisers must have a rudimentary understanding of data analysis and hygiene, as well as a modicum of technological knowledge to manage both standard communications and newer methodologies. Data quality can have the single largest impact on revenue; as data ages or becomes incorrect, fundraisers lose donors through the inability to contact them, or contact them correctly.

3. As part of a comprehensive, strategic fundraising plan, fundraisers must include the strategies and platforms that make sense in the context of their organization and plans, and that they can manage well and efficiently.

The tendency to chase after the newest technology or platform should be tempered against the overall plan for the organization and what can be managed and managed well.

The misalignment of social fundraising data sources and donor relations

Social fundraising and online giving platforms are changing the landscape of fundraising and marketing for nonprofits. In a world where technology innovation is happening at a faster rate than ever before, nonprofits are lagging in their ability to both keep up with the rate of innovation, and also in mining disparate data sources to drive true, intentional relationship fundraising.

Recommendations

1. The sector needs to allow for ample investment in new technologies and social engagement. Nonprofit staff should be given time and dollars for training and continuing education on social engagement and online giving platforms.

2. The sector should push for changes within data transfer between platforms such as Facebook and nonprofit organizations. If we truly want to adapt to the way that people want to engage with us, and meet supporters where they are, then we need to work together with technology innovators to create the greatest growth opportunities.

3. As data will play a crucial role in developing relationships with donors who give online and through social peerto-peer programs, nonprofit organizations should focus investment in understanding these donors in order to build relationships and loyalty to their cause, via these changing avenues for giving.

4. Nonprofit organizations should embrace the way that donors and supporters want to engage, and stewardship and relationship building should adapt to the platforms where supporters are showing their support. As an example, if data is not accessible, then in lieu of email and or postal stewardship, organizations should be focusing on how to cultivate and build relationships on social platforms where people are engaging. Stewardship and relationship building may vary on these platforms, but we should not be so focused on the method of follow up (i.e. email) versus the preference of engagement of the donor (i.e. a public note of encouragement on a fundraiser’s Facebook page). 

Rogare (Latin for ‘to ask’) is the independent think tank for the global fundraising profession

Rogare Critical Fundraising Reports are explorations of the issues and trends relating to particular areas of fundraising, providing a snapshot or barometer of the current important and critical issues in those fields. Read the full report here