The Future of Fundraising

As nonprofit leaders look to leading their organizations into 2015 and beyond, it is important to recognize that change is certain and that to survive, organizations will need to adapt how they respond to donors and society as a whole. Based on the constant need for nonprofits to acquire new donors, the changes in what motivates donors to give, and the new opportunities created through technology, here are four trends that I believe will change the nonprofit landscape over the next few years.

1. Nonprofits will use advances in technology to engage donors face to face and at every giving level.

Fundraising has always been about building relationships with people who are or will be ready, willing, and able to give. Most nonprofits recognize that face-to-face interaction is the most valuable way to build those relationships, but it’s traditionally reserved for major gift development because it’s expensive, less scalable, and time-intensive.

To justify the cost of doing more, nonprofits will increasingly use new technology to identify prospects for giving before donors make mid-level and major gifts, and then use that data to drive face-to-face visits and upgrade solicitations.

The University of Louisiana Lafayette is already leveraging technology to engage general fund donors who have the potential to upgrade to middle and major levels; so far, it has raised more than $650,000 in revenue that it otherwise may not have tapped.

Organizations must approach these interactions differently than traditional major gift development, but if they re-engineer face-to-face donor engagement based on growing and sophisticated databases of financial and nonfinancial data, it will become an affordable, rapid approach to effectively building relationships and funding initiatives through giving at every level.

2. Transitional organizations focused on solving problems and then disbanding will increasingly challenge “permanent” nonprofits.

Boomers and their parents donated to nonprofit organizations as if they were paying a bill; many of today’s donors approach giving a lot differently. They donate based on perceived needs, not because they have a history with an organization.

So what is the natural next step? As donors become increasingly motivated to see results, we will see more nonprofits formed for brief, 3-to-5-year stints.

Foundations are also moving in this direction. Atlantic Philanthropies, for example, has decided to give away all of its money by 2020. The Bill and Melinda Gates Foundation has meanwhile adopted a “giving while you’re living” philosophy, based on what it can accomplish today rather than preserving of assets for decades.

What would it look like if more nonprofits formed for the purpose of addressing an immediate challenge and then ceased operations? How might it change the way we form, fundraise, fix … and finish?

3. Big data will become ubiquitous, and easier to manage and understand.

Almost every nonprofit organization monitors recency, frequency, and monetary value (RFM) data. More and more organizations are leveraging external wealth-screening data, which evaluate a donor’s capacity to give outside of their giving records. However, collecting and analyzing non-financial, behavioral data is no longer prohibitively expensive. Nonprofits have the opportunity to leverage robust, publicly available donor data points to improve their relationships with donors.

Some large organizations have already started down this path. For example, Vasser College recently leveraged big data to drive a strategy that surpassed its donor goal by 200 percent.

Big data is available—now—to all organizations, not just the big ones. With it comes a relatively untapped treasure trove. Nonprofit executives will increasingly see well beyond their existing, internal database horizons into an infinitely expandable world of data assets that inform how they acquire, engage, cultivate, and upgrade donor relationships.

4. Nonprofits will become proactive, rather than reactive, to opportunistic fundraising campaigns.

The well-known ALS Ice Bucket Challenge raised more than $100 million in 30 days and in some ways—like giving and volunteerism in response to the 2012 Haiti earthquake—defined viral fundraising. Both of these examples teach us that donors are willing to respond to social needs even if the nonprofits that benefitted never anticipated or even solicited their support.

Enter the world of opportunistic fundraising. At the risk of sounding insensitive—even exploitative—it’s time for nonprofits to leverage the incredible media awareness of the small world we live in, and develop strategies for maximizing newsworthy events that connect with their cause and mission.

Effective nonprofits will increasingly prepare well for future crises, large or small, and approach them as catalytic moments when they can make real progress. World Vision does this extremely well; it has a plan for activating donors whenever a natural disaster occurs.

The nonprofit landscape is changing; the most effective leaders will recognize this and adapt their strategies to maintain relevancy and ultimately make an impact the world.

Read more stories by Curt Swindoll.