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How 2020 Influenced our 2021 Fundraising Trend Predictions — and Why It Matters for Your Success, part one

At the beginning of every year, we take time to consider the fundraising trends we expect to see in the coming months. Often, these trends are predictable and don’t dramatically shift year-over-year. However, the COVID-19 pandemic in 2020 changed all of that.

As fundraisers, we all faced the most unpredictably unique year in our lifetime. The pandemic put our ability to stop, drop and roll to the test, and all of us have come out on the other side stronger for it. By all indications, 2020 proved to be a record-breaking fundraising year.

As we continue to monitor the constantly evolving situation, we’ve adjusted our 2021 outlook for marketing trends accordingly. We believe organizations that continue to adapt their fundraising methods will see solid returns and positive results as trends change.

So, what does the rest of 2021 hold for us?

AFP president Mike Geiger said, “Many charities will continue to face very stiff fundraising challenges into 2021 and possibly beyond — we are not out of the pandemic woods by any stretch.”

But what we have learned from 2020 is to never stop believing.

Our three-part series will examine the trends we believe will impact philanthropy in 2021.

1. Donor-Advised Funds

Donor-Advised Funds (DAFs) are one of the fastest-growing giving channels to advance your mission today. Fidelity Charitable reported a 39% growth in DAF dollars granted in 2019. In the first two months of 2020, donors made more than $100 million in grants from Fidelity Charitable DAF accounts in response to the pandemic. March grants increased 36% from the previous year. And on May 5, 2020, in response to Fidelity Charitable’s Giving Tuesday Now Challenge, donors recommended an additional $312,490,836 for grants.

National Philanthropic Trust (NPT), the nation’s largest independent DAF sponsor, reported a record $2.11 billion in donor-recommended grants for the fiscal year ending June 30, 2020. The aggregate grant dollars represent a 54% increase from $1.39 billion in the previous fiscal year.

Why it matters:

DAFs are not exclusively for the 1% anymore. Many DAF sponsors — including Fidelity Charitable — allow a donor to open an account with no minimum initial contribution. They are opening the door for more mid-level donors to use this taxwise way of giving. Another fact not to be ignored is the more than $120 billion sitting in DAFs waiting to be granted.

What we’re watching:

Donors have a tax incentive to move money into a DAF, but there is no urgency to transfer the money out. Often money sits in these funds due to inertia — donors need to be encouraged to make recurring grants and/or name your organization as a beneficiary to the account.

Additionally, now is the time to encourage your donors to accept the #HalfMyDAF challenge. In 2020, California technology-industry veterans David and Jennifer Risher created the #HalfMyDAF movement. On May 15, 2021, and again on September 30, 2021, they will match grants to randomly selected nonprofits from the pool of those nominated for the match. Any nonprofit that your DAF sponsor supports is eligible.

2. Virtual Events

Though their popularity has risen out of necessity during the pandemic, virtual fundraising events will continue into 2021. Not only because of the continued pandemic, but also because of the efficiency and benefits they provide.

Why it matters:

In-person events require substantial upfront costs and have traditionally been a staff time-suck. Virtual fundraisers provide greater access to larger audiences. They can be more donor-centric, allowing your donors to attend from the comfort of their own homes. Additionally, virtual events offer many lasting benefits:

  • Lower costs, no venue, food, insurance, decorations or entertainment needed
  • Free you of geographic limitations to engage speakers, attendees and sponsors
  • Reduction of staff time required to produce the event
  • A lower barrier for attendee entry — no travel or wardrobe expense
  • Increase fundraising ROI

What we’re watching:

Virtual events only work if your organization does it right. Focus on impact — translate immediate, short-term needs into long-term, community-based goals. Paint a vivid picture of your plans moving forward. Inform your donors about additional tax incentives. Lastly, practice — don’t let the software trip you up. Ensure it is easy for supporters to submit their donations.

3. Community Connections and Corporate Philanthropy

Another one of the many lessons we learned in 2020 is that we are stronger when working together. Lines between the corporate and nonprofit sectors are blurring, and we expect this to continue into 2021. This trend has been developing over the past few decades, and the convergence of the pandemic and the global social justice movement provided a tipping point.

We can look at the most recent Super Bowl spots as proof — Chipotle, “Can a Burrito Change the World?”, DoorDash, “The Neighborhood” and the unforgettable Toyota, “Upstream” spot featuring Paralympian Jessica Long.

Why it matters:

Despite the pandemic, corporate giving was up 0.4% in 2020 and is expected to rise another 1.4% in 2021. Consumers and employees, i.e., donors and volunteers, are demanding that businesses add more purpose to their profit-centric model. Likewise, nonprofits are looking to successful for-profit companies to develop a more scalable and sustainable growth model.

According to the Philanthropy Outlook for 2020-2021, companies are beginning to recognize the benefits of focusing on their employees’ philanthropic interests. Fifty-eight percent of Americans consider a company’s social and environmental commitments when deciding where to work.

What we’re watching:

This increased sense of corporate social responsibility leads to new opportunities for partnerships and programs like:

  • Corporate matching gift programs. These are donations made by companies that match some percentage of gifts made by their employees. Encourage your donors to ask their employers if they offer this kind of program.
  • Corporate sponsorships. Corporate sponsorship is all about the win/win. What does your organization have to offer — access to donor lists, brand mentions in planned marketing campaigns and mission alignment? Do your homework to develop a winning proposal.
  • Volunteer days. When you have a volunteer program at work, it attracts the best talent. Additionally, it gives employees a chance to understand one another better, providing an opportunity to find common ground. Ask current volunteers if their employers offer volunteer days.

By implementing strategies that leverage these fundraising trends, your nonprofit will be ready to take on whatever challenges may come your way. Check back next week when we explore three more trends for 2021!

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