Predicting the Trends in Nonprofit Fundraising for 2022
With January and end-of-year fundraising wrapped up, it’s time to turn to the rest of 2022 and tweak fundraising plans. Given the continuance of the pandemic, an unpredictable stock market, and concerns over inflation, there’s a lot of uncertainty in the philanthropy sector. What are the experts predicting for this year?Julep staff reviewed many blog posts and articles predicting trends for 2022, and below is a summary of what we found.
1. Mixed signals from the stock market.
We know that philanthropy and the stock market are closely linked. However, the effect of inflation is rippling across consumer prices as well as the stock market. In December, financial investors predicted a big year of growth, but January fluctuations prompted a re-evaluation as the S&P 500 plunged 6%.With inflation rising, this creates a double-whammy for nonprofits. Not only are budgets stretched further due to rising prices, but donors have less expendable income to donate. This change could hit nonprofits immediately, according to Philanthropy.com., “Fundraisers can expect that donors will continue to slow the pace of their giving, postponing gift decisions to later in the year and withholding support to new organizations or programs in the short-term.”
2. Donors are more amenable to funding endowments.
Traditionally, recruiting donors to fund endowments has been a hard sell for fundraisers, but the pandemic demonstrated why donors need to contribute to rainy day funds. As GivingUSA noted in December:
The pandemic instilled in donors a sense of responsibility and sustainability. Endowments that were once an afterthought are now at the top of donors’ priority lists. Donors recognize the fragility of the organizations and institutions they support; they want to ensure their favorite causes can weather the next pandemic or catastrophe.
PNC Initiatives agrees:
The events of 2020 reinforced the timeless counsel that preparation is key for nonprofits. Having a reserve fund, should unforeseen expenses arise, is a best practice for any organization. While there is no one-size-fits-all answer in terms of how much an organization should have in a reserve fund, aiming for 3-6 months of operating expenses is generally a good place to start. For endowments, having 2x the annual operating budget is the industry standard. While building this reserve through fundraising is typically challenging, as donors often prefer to give to specific initiatives, events of the past 18 months may make donors more receptive to the idea.
3. Invest in virtual events and make them accessible.
Depending on restrictions and dangers in your area, virtual events may be your only option. Your donors may prefer to have some events online for convenience with in-person events reserved for important occasions, such as a gala. InsideCharity recommends adding virtual components to fundraising, marketing and donor stewardship efforts:
Just because virtual meetings replaced in-person ones doesn’t mean your donor stewardship activities should be any less impactful. Connect with donors in meaningful ways using text, emails, phone calls and video chats. With these communication platforms, you can keep your organization (and its fundraising efforts) front of mind for your supporters, even if they aren’t interacting with you in person.
Since some forms of virtual events are likely to become a permanent part of nonprofit fundraising, organizations need to invest in a platform that offers reliable streaming and makes connecting easy. Additionally, organizers should be aware of accessibility and strive to make virtual events open to all.
4. Create Flexible Funding Plans.
Since pandemic uncertainty is extending in years, it no longer makes sense for organizations to depend on five-year plans. While long-term planning still needs to happen, especially for capital campaigns, organizations need to be flexible enough to adjust to rapid changes in the market or major, last-minute adjustments to the major fundraising event.Giving USA encourages the use of two-year plans:
There are many benefits to a shorter strategic plan. For nonprofits, a shorter timeline means more opportunities to engage key stakeholders in the plan’s drafting and execution. A shorter span also creates a sense of urgency—and increases the likelihood that the plan will be fully implemented.
InsideCharity also advises:
As we move into next year, keep your strategic plan front-and-center. Host regular check-ins with your team to ensure you’re meeting targets efficiently. If you choose to hire a nonprofit consultant to help with your plan, you can even continue working with them on an ongoing basis to help implement their recommendations. This can give your team the stability and structure it needs to tackle any obstacles that arise.