Adapting to Shifting Giving Trends
The recently released Giving USA report paints a concerning picture for the nonprofit sector, with total charitable giving in the U.S. declining by 3.4% in 2022. This drop comes on the heels of record-breaking pandemic-era generosity, leaving many nonprofits struggling to maintain critical services.
However, this shift also presents an opportunity for organizations to reevaluate their fundraising approaches and position themselves for long-term sustainability. On an optimistic note, Barron’s projects an increase in charitable giving for 2024 and 2025.
What can you do to garner more donations for your nonprofit? Here are a few key projects you can take on to bolster support for your organization.
Strengthening Strategic Partnerships
One key avenue for nonprofits to explore is enhancing their strategic partnerships. By collaborating with corporations, foundations and other stakeholders, organizations can access new donor pools, leverage complementary resources and create innovative funding models. For example, you could partner with local businesses to develop cause-marketing campaigns, or you could seek multi-year grants from foundations aligned with your mission.
Rallying Donor Support
While the drop in middle-class giving is concerning, donor-based nonprofits can focus on engaging their most committed donors, including major donors and high-net-worth individuals. By providing personalized stewardship, highlighting the impact of their support and exploring giving vehicles like donor-advised funds (DAFs), you can deepen these crucial relationships. Additionally, nonprofits should consider diversifying their donor base by reaching out to younger generations and non-traditional donor segments.
Balancing Government and Private Funding
As government funding remains a significant portion of revenue for many nonprofits, advocating for continued public support is crucial. You should actively engage in policy discussions, join industry coalitions, and educate policymakers on the essential services nonprofits provide. At the same time, organizations must strike a balance between government and private funding, leveraging diverse revenue streams to mitigate the risk of relying too heavily on a single source.
Diversifying Revenue Streams
To strengthen your financial resilience, nonprofits should explore opportunities to diversify their revenue streams. This could include expanding earned income activities, such as fee-for-service offerings or social enterprise initiatives, as well as exploring alternative funding sources like crowdfunding, impact investing or corporate sponsorships. By diversifying their funding mix, nonprofits can better weather fluctuations in charitable giving and ensure their long-term sustainability.
Nonprofit Accounting and Consulting
In addition to these strategic initiatives, nonprofits may also benefit from partnering with specialized nonprofit accounting firms or consultants. These professionals can provide audit services, nonprofit procurement policy guidance and strategic accounting and consulting services to help organizations reduce expenses, optimize their financial management and position themselves for success. Our team at LvHJ is ready to help!
Vote!
Take matters into your own hands by encouraging friends and family, colleagues and partners to vote for better tax implications concerning nonprofit policies. Especially in 2024, we have the chance to change our situation now more than ever before.
Find a polling location near you.
By embracing these strategies, nonprofits can emerge from this period stronger and more resilient than ever before.
Sources
https://www.barrons.com/articles/charitable-giving-is-expected-to-rise-4-2-this-year-report-says-2465d0a8
https://calnonprofits.org/publications/article-archive/832-giving-is-down-nationwide
https://blog.dickersonbakker.com/four-key-takeaways-from-giving-usas-alarming-report-on-2022-giving
Related: Are Bundled Gifts the Answer?
