What can $100 provide for a donor-based not-for-profit? Not as much as it used to, according to the newest Giving USA Foundation report.
The annual report on philanthropy is the longest-running report on the sources and uses of charitable giving in America. And while the report showed that giving was up in 2023 compared to 2022, inflation has played a role in reducing real giving impact by 2.1%.
The good news is that individuals can make a difference. The report states that 67% of nationwide giving comes from individual donations, amounting to just over $374 billion. Corporations were the next largest giving segment, with contributions increasing from 1% of all giving in 2022 to 7% in 2023.
However, because data shows that younger individuals are not as active in giving as older and high-net-worth individuals, not-for-profits need to change their focus. Invest in what fundraising expert Richard Shadyac, Jr. called “charitable living” in a recent Nonprofit Times article. Appealing to the core values of individuals through new strategies can help not-for-profits offset inflationary pressures and other challenges for new revenue.
Here are tips for offsetting inflation through financial and development strategies:
Budget Review
By reviewing cost centers quarterly, there will be telltale signs that your organization needs to make changes to maintain your budget. Whether it’s a change of supplier or a reduction in the frequency of orders, there are always solutions for controlling costs.
The key is timely reconciliation and proper categorizing in your chart of accounts to ensure that you are reviewing accurate and timely numbers. You need to track where costs are rising to investigate the right solutions with your team.
Revenue Diversification
There may be certain programs or development efforts in which costs are rising significantly. For example, if your not-for-profit provides transit services, then you are experiencing increased fuel costs. If you host events, you will see increasing event management and hospitality costs. If these initiatives are still core to your organization, then look to new sources of revenue.
Whether you partner with a for-profit organization, sell branded products or sponsor another organization in exchange for donor promotions, there are many creative ways to advance your mission and increase support and visibility in significant ways for donors.
St. Jude Children’s is an example of stepping outside the box to increase revenue, whether they partner with companies for round-up giving at the retail checkout counter or they build relationships with online gaming communities to reach younger donors.
As you see new opportunities to grow revenue, pay attention to how the revenue aligns with the organization’s mission. This will avoid complexity regarding unrelated business income tax laws.
Charitable Living Outreach
Does your organization offer education and outreach to build a charitable mindset in your community? From financial management courses to the basics of debit accounts, savings and retirement, young people are not always trained on how they can balance spending with savings…as most importantly giving to causes they care about.
Young people are charitably minded. From a recent report by Blackbaud, GenZ donors are charitably minded when they understand and trust the organization’s mission and impact. The report stated that 84% of 1,000+ GenZ consumers surveyed were supporting nonprofits, charities and causes in some way.
Telling your story through multimedia as well as educational events, and helping young donors get involved with their time and advocacy will help advance your mission and overcome inflation and other economic strains in the future.
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