Year-End Fundraising Jumped for Some Groups, Declined for Others

2023-02-16 14:37:04 By : Ms. kity yang

Early data about year-end fundraising is in, and the picture is mixed. Some charities did gangbusters, while others struggled amid economic uncertainty and inflation. Some organizations that compile fundraising data are still tabulating, so more information will emerge in the coming weeks. But early signs suggest fundraisers may face some headwinds this year.

A few companies offered year-end data based on product use or surveys from charities that use their services. Those results were mixed. Starting with the good: OneCause, a digital fundraising company, found that overall 2022 was a gangbuster year for charities fundraising through its platform.

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Early data about year-end fundraising is in, and the picture is mixed. Some charities did gangbusters, while others struggled amid economic uncertainty and inflation. Some organizations that compile fundraising data are still tabulating, so more information will emerge in the coming weeks. But early signs suggest fundraisers may face some headwinds this year.

A few fundraising technology and consulting companies offered year-end data based on nonprofits’ use of their products or surveys from charities that use their services. Those results were mixed. Starting with the good: OneCause, a digital fundraising company, found that over all 2022 was a gangbuster year for charities fundraising through its platform.

Organizations that used the platform in both 2021 and 2022 saw a 50 percent increase in donations.

“We were really pleasantly surprised to see the fundraising results that our customers were able to generate in all of 2022,” says CEO Steve Johns.

That’s not to say that success was universal. While charities using its platform performed well over all, OneCause found that smaller charities “struggled” in 2022.

“There’s a little bit of a drop-off, maybe around the million-dollar revenue line,” Johns says. “Organizations who have $1 million or more were those who were reporting increased fundraising proceeds. Those who were less than $1 million were not raising as much as they had budgeted for the year.”

Vanguard Charitable, one of the largest sponsors of donor-advised funds, saw increases in grant making from those funds in 2022 over all, including at year-end. Donors gave $1.87 billion to 52,000 nonprofits.

“This total was a 5 percent increase over the prior record year of 2021,” says Ann Gill, chief philanthropic officer. “The average grant amount also increased 4 percent from 2021.”

Things weren’t as rosy in the giving data tracked by EverTrue, a fundraising technology company that works primarily with colleges and universities. In the second half of 2022, the amount of money customers raised dropped nearly 32 percent compared with the same period the previous year. However, Mike Brucek, EverTrue principal data scientist, says the 2021 period appears to be anomalous, with a spike in large donations.

“People had extra money, and fundraisers were more confident to close gifts,” he says. Last year’s uncertain economic outlook was a reality check for donors.

EverTrue clients saw their total number of donors decrease. The number of donors in November and December declined 16.5 percent compared with the same time period the previous year. This tracks with data from the Fundraising Effectiveness Project, which noted a drop-off in donors in its third quarter 2022 report.

M+R, a fundraising consultancy, also had a glum year-end outlook. A survey of 21 charities working on a range of topics from international issues to health to the environment found that year-over-year fundraising revenue decreased for 15 groups and the number of gifts and the average gift size declined for12.

While data wasn’t available from many of the big aggregators of data on charities, like the Fundraising Effectiveness Project, some anecdotal evidence is emerging.

Woodrow Rosenbaum, who is GivingTuesday’s chief data officer and helps compile data for the Fundraising Effectiveness Project, said the project expects to have year-end 2022 data toward the end of the first quarter. Anecdotally, he’s heard mixed news from nonprofits. Some charities did really well; others did not.

“It’s hard to predict the aggregate, but there are continued disparate results,” he says, adding he’d like to see the data that comes in before drawing any conclusions. “There are no clear indicators yet.”

Looking at news stories, results are mixed. Salvation Army locales in Illinois, Indiana, Minnesota, and Montana reported a decline in giving at year-end. At the same time, some nonprofits proclaimed big successes, including National Geographic, which hit a $100 million goal, an Oregon charity that doubled what it had hoped to raise, and a Texas school district foundation that raised nearly $100,000 more than the previous year.

The Arizona Community Foundation has done pretty well so far in its fiscal year but has heard that some charities in that state have struggled.

“I do think that the economy and inflation did have an impact,” says Kimberly Kur, chief development officer. “I can see how it would have a big impact on smaller-level donors just having much less in discretionary dollars.”

Yoonhyung Lee, a partner at M+R, notes the drop in average gift size found in their data could be caused by economic conditions. “Anecdotally, we heard that midlevel giving was a little soft,” she says. “So potentially inflation was something that impacted those donors.”

While the year-end picture is still forming, some of what we know so far about 2022 offers insights into 2023. For example, Kur explained that one reason the foundation is on track to exceed its fiscal year goals is that more than half of its donations came in advanced forms of giving that typical year-end donors don’t always use, including planned gifts, noncash donations like real estate and business interest, and other foundations.

“We still are actually on pace to surpass our fundraising goals with those kinds of gifts,” Kur said, noting the group’s fiscal year ends in March. She says smaller nonprofits should try to tap similar donor resources and says many community foundations, like hers, offer training to local nonprofits in this area.

Appealing to DAF account holders is a good idea during these times of uncertainty, given that those donors have already set aside money for charity, says Gill, of Vanguard Charitable. She says that 20 percent of Vanguard Charitable donors set up recurring gifts, and more than half make unrestricted donations.

Johns, with OneCause, says in-person events were responsible for a lot of the healthy growth in fundraising its clients had in 2022 and suggests charities lean into their in-person events this year.

For charities that saw a fundraising decline at the end of last year, now is a good time for reflection, say Lee, of M+R. “Everybody’s happy when revenue is growing,” she says. “But these soft times help expose what’s not working.”

Her colleague Rachael Wolber, vice president at M+R, agrees, suggesting charities identify and jettison tactics that aren’t working and try some new things moving forward.

“When I think about the groups that were outliers to this overall trend [of declines in fundraising], it’s groups that are continuing to innovate,” Wolber says. “They are innovating in terms of their digital fundraising and asking, How can we optimize the things that are working?”

Emily Haynes contributed to this article.