Nonprofits Plan for Year-End Fundraising and Uncertainty
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by Emily Haynes and Eden Stiffman
The laundry list of challenges fundraisers face is daunting: a presidential election, a pandemic, a poor economy, and record unemployment. Add in the drama surrounding U.S. postal service delays and it's clear that the 2020 year-end fundraising season — a critical time for many nonprofits — will be unlike any in recent memory.
Many nonprofits plan to focus their fundraising efforts on donors who gave earlier in the year, with special emphasis on informing them about the impact of their earlier support. Some organizations are leaning heavily on their biggest donors who, thanks to the strong stock market, are weathering the storm relatively unscathed. Fundraisers are doubling down on check-in calls and thinking about how they can creatively replace in-person events in the fall and beyond.
Different types of charities will confront a different mix of factors, says Eric Javier, managing director at the consulting firm CCS Fundraising. He describes the current environment as a "tale of three cities."
Some social-service groups, racial-justice organizations, and health charities have been able to raise a lot of money because of external factors like the pandemic, the economic downturn, and the charged atmosphere surrounding race. Others, like museums, performing-arts organizations, and religious groups, have struggled because people cannot visit or attend performances or services. Then there are colleges and universities, whose reductions in enrollment have put more pressure on philanthropy at a time when donor interest is being pulled in directions that may feel more urgent.
The last quarter of the calendar isn't the be-all and end-all for every charity, Javier says, but for human-service organizations and food banks, "the year end is typically huge."
"Giving around Thanksgiving and around holidays is a big part of their communication, and these are the same organizations that have actually done quite well because of Covid, because of the urgency, and because of the economic environment." Though the need for their services is higher, for many of these groups, "this year there isn't as much pressure at year end."
Some charities, like Feeding America's national office, have seen an influx of new donors since the start of the pandemic. Gifts from first-time donors also spiked — particularly from March to June — at the Mid-Ohio Food Collective, a regional food bank. Contributions from more than 12,000 new donors helped the food bank raise 65 percent more than the fundraising goal it had set for the fiscal year that wrapped on June 30. Media coverage of the charity's work helped attract new donors, says Matt Habash, chief executive.
The new donors were a boon in a year when expenses at the food bank increased by 30 percent, Habash says. "We anticipate this increased spending level to continue for at least the next 12 to 18 months," he wrote in an email.
The charity will need donors to keep giving so that it can continue to meet its community's increased need for food. So far, roughly 19 percent of donors who made their first contribution in March have given a subsequent gift, according to the food bank.
At Feeding America's national office, new supporters have stuck with the nonprofit as the health crisis has dragged on: Close to 9 percent have made a second gift, according to Liz Nielsen, senior vice president for digital and direct marketing. That stickiness was initially surprising, Nielsen says.
"We anticipated that many of these donors would behave more like a disaster-response donor," she says. "This is a prolonged disaster, and certainly that environment has some impact on this donor behavior."
It helps that the charity can make a direct link between its services and how the pandemic and employment crises have worsened hunger, she adds. With no end to the crisis in sight, the charity wants new donors to start giving monthly. They've already seen success: The number of monthly donors has increased 70 percent since the end of 2019.
Nielsen says she and her team are trying to strike a delicate balance between keeping new donors updated on the organization's work and asking them to help the charity meet high levels of need for its services.
"We don't want to overstep. We want to build a relationship with these new donors," she says. Rather than ask for recurring gifts outright, the charity instead promotes a monthly giving option on its online donation page.
The charity plans to kick its year-end appeals into high gear ahead of Thanksgiving. While the fundraising strategy and messages will be similar to past years, Nielsen and her team want appeals to tie into current events. "We'll still talk about Thanksgiving," she says. "But we'll talk about Thanksgiving and the fact that we've never seen a need like this, and we've never experienced a situation like this."
A Fine Line
Other charities are also hitching their message to current events in ways they typically wouldn't.
Heifer International is developing a Covid-19-focused year-end campaign that positions farmers as frontline workers and heroes, a message the organization has been testing since March.
"There's been a lot of talk about a world food crisis, and obviously that's the space we're in," says Christy Moore, senior vice president for marketing. But many people aren't making that connection between the headlines and the charity's mission.
"I think it is eye opening to a lot of our supporters, and especially on social media, how critical a role that farmers are playing," she says. "They're on the front lines, and we're making sure they have the tools necessary for planting and then harvesting and then connecting those products to a market that needs it."
The last quarter of the year is a critical time for the group's fundraising, during which Heifer typically raises a large portion of its annual budget. In some ways, the year-end campaign will look much like it has in the past years. The charity will continue to promote its holiday gift catalog — a successful fundraising tool for more than 25 years that allows donors to give a cow, a sheep, or a flock of chicks to a family in need.
At this point in the year, the charity's fundraising is ahead of where it was in 2019. That's notable because Heifer paused its fundraising from about March until May.
"We really did not reach out to our current database of supporters asking for additional donations just because the market was so flooded," Moore says. "At that moment in time, the world did need to focus on the health crisis."
The charity continued to update supporters on its work and provide free educational resources but didn't ask directly for donations. While Heifer plans to continue its telephone, email, and direct-mail appeals in the coming months, Moore says the organization is being careful not to overdo it.
"We need to be respectful of the space that we're in, and we don't want to lose supporters during this time," she says. "We want to show them the impact their gifts have made so that when the end of the year comes, they are primed to understand the impact they've had and then give additional support."
Four years ago, after Donald Trump was elected, progressive nonprofits saw an influx of new donors. Their continued support has bolstered some organizations during the crises of 2020.
That's the case for the Environmental Defense Fund, which has built both its base of contributing members and activists who take action in support of the organization's mission.
"We have continued to invest in that growth and acquisition," says Catherine Nardone, chief development officer. "But at the same time, we have been very mindful of the need to retain the donors that came on in what people were calling the 'Trump bump.'"
The growth continues, though it has slowed somewhat, she says. Her team is drawing on lessons it learned during the Great Recession. Outreach from fundraisers — that doesn't involve a request for donations — to understand how supporters are coping is critical.
The calls have been well received, she says, but the pandemic has made it harder for trustees and other key major donors to support fundraising in the ways they have in the past. Whether that's hosting a cocktail party and bringing friends into the organization's circle of donors or facilitating in-person introductions, Nardone says, "it's just really harder for us to use the tried and true networking within the major-donor realm to grow our support in major gifts."
Fundraising in 2020 has been strong so far, and year end is not a make-or-break time of year for the advocacy group, Nardone says. But the unknowns of the economy and the upcoming election make planning complicated.
"The [stock] market has not caught up with the reality of the economy, and so for now things continue to feel OK," she says. "Once the reality of the economy is reflected in the market, it's going to get difficult for everybody."
Because the organization has to map out appeals through December and beyond, her team is planning for three scenarios: a Biden win, a Trump win, and an unclear result. For each scenario, fundraisers are crafting messages for direct-mail and digital efforts, deciding what kind of phone outreach will be necessary, and thinking about how the outcomes will affect the direction of their programming.
"That level of scenario planning and alternatives is unlike anything we've dealt with before," Nardone says. "Honestly, it's the most complicated and time-intensive year-end campaign we've ever confronted."
No matter the election outcome, the American Civil Liberties Union will have something to say, according to Alicia Meulensteen, director of supporter marketing at the charity. But the challenge for the almost century-old group is determining what will motivate giving from donors who have spent the year reeling from the pandemic, a crippled economy, and racial injustice. The charity's mission to defend civil rights is especially relevant, Meulensteen says, "but we're obviously trying to think about how to convey that to donors who might be dealing with any level of uncertainty."
While direct-mail appeals are generally less tied to news events than digital appeals and as a result less time-sensitive, warnings that mail-in ballots might overwhelm the postal service this fall are complicating fundraisers' plans. Some charities have seen delays in mail delivery and worry their investment in postal appeals won't pay off.
Ronni Strongin is concerned. As chief marketing officer for American Associates, Ben-Gurion University of the Negev, which raises money for the Israeli university, she cites delays delivering three recent mailings to supporters. One, which included an annual report, was sent to 2,500 donors almost five weeks ago. Some people received it, but many still haven't, she says.
"These packages, of course, are important to send to donors," Strongin says. "They tell the story. They show how their money is being used."
The delays are disheartening. "We spend a significant amount of money creating these kinds of publications, and then they're not being received," she says. "Every dollar we spend doesn't go to the people we help."
Looking ahead, she and other fundraisers are considering how to plan their messages around unpredictable delivery dates. After seeing delays with standard nonprofit bulk mail, some nonprofits are weighing whether to pay more to send their year-end appeals first class.
Throughout the pandemic, many existing donors — including some who had not given in more than a year — have made another donation to Feeding America by direct mail.
Direct mail has been important for many of Javier's clients, but many are continuing the gradual shift to digital campaigns. "It's where a lot of the money has come from in these last four or five months," he says. Still, he doesn't expect they'll abandon direct mail.
Despite anecdotal reports of slow or unpredictable delivery of letters, the data show that, over all, average delivery times haven't changed, according to Polly Papsadore, director of marketing and business development at PMG, a company that produces mailings for nonprofits.
But it's a different story for bigger envelopes, like those used to ship thank-you gifts for donors. Papsadore says there were delivery delays when one of her clients recently sent a calendar from a Midwestern mail house to a big list of supporters. Another charity she works with sent a gift to supporters from a West Coast mail house and recorded scattered delivery times among recipients.
PMG tracked delivery dates for bigger envelopes in California, Florida, New York, and Texas to get a clearer picture of how long it's taking for mailings to reach recipients. "The Florida and New York timing was very slow," she says.
However, Papsadore stresses that delivery timelines seem to range even within regions. Her company tracks delivery dates for mailings sent to PMG staff members and employees of their nonprofit clients — "seed packages" that help nonprofits track when their mailings reach recipients. One mailing showed a two-week difference in delivery dates between addressees near Baltimore and addresses near Philadelphia. "The emphasis is on the word 'inconsistent,' " Papsadore says.
Even so, she urges fundraisers not to panic. "They should have confidence in the deliverability of their mail this fall," Papsadore says.
If fundraisers want to hedge their bets, Papsadore suggests they add extra time for internal reviews of appeals (knowing that people often miss deadlines) and send appeals to the printer early. Some printers were already asking nonprofits to give them extra time because social-distancing measures mean fewer workers on the floor at a time.
"It's more of a gentle reminder: Continue to plan ahead," she says.
To compensate, some groups are stepping up digital campaigns and making more phone calls.
At the ACLU, fundraisers hope to reach potential donors both online and over the phone. "We're looking at how we're going to message across all these channels knowing that our donors cross those channels, too," Meulensteen says.
But as in other election years, she worries about breaking through the sheer volume of communication targeted at donors. "There's more messaging just over all right now," Meulensteen says.
That's the real challenge during election season, says Javier, the consultant.
"Leading up to an election, it's less the political giving that affects the charity's ability to raise money, and it's more a matter of attention," he says. "The election distracts and focuses people on the election itself, and it's just hard to sort of penetrate that."
Some organizations he works with are planning to spread out the timing of their appeals in the weeks surrounding Election Day. Some, for example, plan to avoid the week before and week after the election.
'People Can't Give What They Don't Have'
Some membership organizations, such as museums, expect the amount of money coming in from monthly donors and other supporters who give small or medium-size donations to drop by as much as a quarter or a third, Javier says.
"We're hearing a lot of concern around that," Javier says. "People can't give what they don't have."
For that reason, some groups are looking to wealthier supporters who can help make up for donors who have cut their giving because of job losses or other financial struggles. There's a heavier emphasis on people who have donor-advised funds to which they've already given money designated for charity. Feeding America has updated its website to highlight giving through donor-advised funds alongside more traditional means like checks and online donations, according to Zuani Villarreal, communications director.
But in Houston, major donors are also feeling the sting of the economic downturn.
Many of the area's large donors work in the energy industry. When the pandemic hit and oil crashed, some faced layoffs and decreased their charitable giving, says Nancy Giles, chief development officer at the Houston Symphony. The organization has always relied on its major donors. But over the past few years, fundraisers there have worked to broaden the organization's donor base.
Still, the symphony has lost a lot of money in ticket sales, so there's more riding on the year-end campaign than the past, Giles says. Despite the travails of the energy industry, when it comes to making up for the significant gaps in revenue, she says, "it's the major donors who are going to have to see us through."
Over all, wealthy Americans are doing quite well in this economy. Not only have high-net-worth individuals largely weathered this crisis, in some cases they're making money in the stock market.
Unfortunately, the economic meltdown is likely to exacerbate the trend of fewer Americans making donations and nonprofits relying on a smaller number of big donors, says Javier, the consultant. But the pressure to raise the revenue remains. "Charities have to go to where those dollars can be raised."
Correction: A previous version of this article said that close to 90 percent of Feeding America's new donors have made a second gift since the pandemic began. Close to 9 percent have made a second gift.