Tech Trends for Community Giving Days in 2021
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One of the most interesting trends during the pandemic in terms of revenue has been the consistent overperformance of community giving days. In reviewing data from both dozens of individual giving days as well as larger calls to action like #GivingTuesdayNow, the reality is clear: Communities, nonprofits and individuals will continue to benefit from having a focused day to generate excitement around the work they are passionate about.
Historically, this has been an under-appreciated part of our sector and does not get the same level of attention as corporate led initiatives like AmazonSmile. Yet, if you peak beneath the hood, it looks like 2021 is going to bring a massive amount of innovation that everyone will need to pay attention to if they are serious about social good.
How Does the Tech Work for Community Giving Days?
An obvious question is what is so different about the technology for community giving days versus an average donation form. While most donors and the nonprofits they support are familiar with systems like a constituent relationship management system or digital fundraising technology, there are major differences in how giving days operate.
In general, giving days will:
- Allow a "host" or community manager to solicit, review and accept individual nonprofit applicants to be part of their giving day.
- Encourage standardized goal-setting and templated storytelling to streamline the process for the nonprofit.
- Provide and support training for the community, so they can generate as much excitement in the lead up and during the day itself.
- Enable donor covered fees, accept donor-advised fund contributions, business sponsorships, matching gifts and other forms of contributions to be logged in a primary set of leaderboards to encourage friendly competition
The most important barometer of success is whether the giving day can weather a massive amount of donations coming in at one time. One of the most prominent examples of this was the catastrophic failure of the company Kimbia, which resulted in significant revenue loss for communities hosting a giving day who had placed their trust in that platform and company. The fallout was so much that Kimbia was eventually acquired by another company to try and resuscitate that business.
Investing in backend infrastructure and financial technology is an important part of making community giving days a success, since there will continue to be a wide variety of ways that donors want to contribute as well as the overall security and integrity of the platforms that nonprofits need to trust. The baseline is about stability and transparency of financial distribution and management.
What Are the Community Giving Tech Trends for 2021?
If we look at where community giving days are growing, there are many evident industry trends that any potential community host or individual nonprofit who has the opportunity to join their existing day needs to pay attention to. Let's break down the top three.
While overall community giving has been doing amazing during the pandemic, an extremely encouraging long term trend has been around peer to peer fundraising. Neon One has seen a massive increase of 120% of peer to peer fundraising revenue around giving days in particular.
While mission specific peer-to-peer programs will continue to drive the vast majority of revenue in the sector, there is a massive difference between a focused program and casual social engagement during a community event.
What we think will happen around community giving days in the coming year is:
- Donor experience. Increased focus on the donor experience and their data security and ownership, since they are potentially donating to multiple charities at one time and will want control over who they receive communications from.
- Social storytelling. More focus on storytelling and social media engagement, such as empowering fundraisers with easy to setup fundraising pages and built in sharing options.
- Hybrid fundraising. A hybrid physical and virtual event approach, such as hosting a livestream while the event happens during the day to encourage public engagement.
The overall donor retention rate across the sector has trended over the years downward toward low 40%, with first-time donor retention rate around 11% for 2020 thus far. That means the average donor that your organization acquires will not be back next year.
Yet there is an amazing opportunity for your organization to acquire donors during a giving day at a much lower cost of acquisition than the industry average, since the major lift on marketing and awareness is taken on by the community giving day host.
There are a few technologies that may help address this trend that we are seeing work flourish in 2021:
- A single login to help donors manage multiple donations. If a donor can come back and login to streamline their donations to multiple nonprofits, that will increase retention rates.
- Retention emails, which line up the donations made the previous year and make it obvious how to donate without having to login.
- Deeper host analytics of success, which will help identify what metrics and programs need to be better invested in to retain donors.
One of the most interesting movements that have come out of the pandemic is the shift around thinking that a community giving day has impact only on the day itself. As the average nonprofit organization's major gift focused staff member knows, it will take a blend of art and science to move someone from casual to committed. Yet how does that translate into a community that may help hundreds if not thousands of nonprofit organizations without diluting the impact?
There are a few ways that this should come to fruition in the coming year:
- Year-round giving options, especially around digital giving like credit cards and ACH transfers.
- Deeper investment into resource support for individual nonprofits that are looking to benefit from the giving day itself. This may come in the form of training hubs or service extensions like printed materials and marketing supporting the community's nonprofits year round.
- More support around business sponsorships, which may result in a more long-term investment into the community giving day's nonprofits for things like matching gifts.
- Better data management, such as directly syncing the donation and donor data into the nonprofit participant's CRM with little effort.
The reality is that community giving days have helped save a large amount of nonprofits from closing, and the only reason these types of events can continue to flourish is through further investment into the day itself. If there is a community giving day in your community, then your organization should invest in it.