5 New Rules of Nonprofit Fundraising for 2021

The nonprofit fundraising landscape has changed significantly because of the pandemic and the related economic crisis. Nonprofits are trying to do more with less. Their budgets are under pressure, demand for services is high, and many donors have been hit hard by the economic downturn. However, there are still opportunities for nonprofits to adapt to the challenges of this moment.

Here, we developed a few new rules for nonprofit fundraising to help you achieve your 2021 fundraising goals.

The pandemic eliminated your ability to wine and dine donors, so how can you invest in technology/outreach/relationship-building to make life better and easier for your donors? Think creatively about creating a better donor experience and being more donor-centric in your nonprofit fundraising and operations. For example:

• Offer specialty exclusive, virtual events for donors.
• Give donors first access to new announcements/updates about your nonprofit or a virtual behind-the-scenes tour.
• Reach out to donors for ideas and suggestions about how to improve your organization and support your mission. Rather than asking for monetary donations, ask them to share their expertise, enthusiasm, and connections. Make donors an integral part of your team.
• Give donors “face-time” with top leaders from your nonprofit.

Make it simple for donors to stay in contact with your nonprofit across multiple channels in a way that is convenient for the donors. Some might prefer daily or weekly updates on social media. Others might want a personal phone call a few times per year.

By putting donors first, your nonprofit can improve donor retention and boost your fundraising.

2020 was a year when our daily life and office work shifted to online communication tools. The same trend should continue for nonprofit fundraising until the pandemic ends: everything that can be done online should be done online. If you’re not doing this already, be more proactive and creative with your nonprofit’s online fundraising and virtual events.

Online giving is booming. April to June 2020 saw a 36% increase in online donations to nonprofits, year-over-year, compared to the previous year. Online events have been successful in 2020 during the pandemic; people want to engage with their beloved nonprofits even if they cannot be there in person.

Keep adapting. Life might not return to “normal” until late 2021, even with successful vaccines. Be prepared to keep operating and fundraising online as much as possible.

America is seeing a “K-shaped recovery” from the pandemic crisis. Lower-income Americans have been more likely to lose their jobs and suffer a loss of income, while higher-income Americans have been more likely to keep their jobs and continue earning income through the crisis. Many are struggling to pay the bills and are facing eviction. However, a sizable percentage of upper-middle and upper-class income earners are still doing well and have even been able to save extra money and build wealth, especially with the strong stock market recovery during the second half of 2020.

Depending on your nonprofit’s mission, community, and audience of donors, you might find that some of your donors are feeling surprisingly financially comfortable and are eager to give more to your cause. Take this opportunity to fundraise from these affluent donors. Make larger requests from your top donors. These key people may be more likely to give more to your organization this year, especially if you appeal to their sense of community spirit in a time of crisis.

emergency alarms? Be strategic about how to craft your fundraising appeals to meet the moment of 2021. You might need to adjust your messaging to be less emergency-oriented, and more forward-looking, and hopeful.

Of course, some organizations are still in a state of emergency, such as cultural institutions and theaters that have been unable to be open or resume operations for the past 11 months. Some of these organizations have still been able to fundraise or access cash reserves, but others don’t have the same level of financial support and might be hanging on by a thread. If your organization is in dire straits and needs urgent funding to keep the lights on, emergency fundraising could be the correct tactic.

For other organizations, if your financial foundation is stable for now, try to engage donors with more of a long-term perspective. Convey that there is light at the end of the tunnel, and your organization is still thriving and adapting. Show your donors how their funds will be invested in a highly effective, high-impact way to build momentum and create a brighter future.

There is a generational shift happening in the world of nonprofit fundraising today, as a new generation of philanthropists and smaller-dollar donors are starting to become more essential to nonprofits’ missions. The younger generations of donors, Millennials and Gen Z, have different preferences for how they want nonprofits to interact with them and what they want to see accomplished with their donations.

According to a recent article from the Chronicle of Philanthropy, younger donors want nonprofits to listen more to their concerns and directly support struggling communities, especially regarding racial justice issues. Younger generations are often interested in more of a grassroots community-oriented approach to fundraising and nonprofit action. Think strategically and open-mindedly about how your nonprofit communicates and builds relationships – not just with donors but with your communities.

Along with younger donors, your organization should think about adapting to the opportunities to engage multi-generational families in giving. As part of the recent trends in online fundraising and evolving the donor experience, think about how you can build donor relationships with multiple generations of the same family. You might have a family of donors who love your organization and want to support it. The older generation of the family could recommend your cause to children or grandchildren, spurring a familial legacy. A single fundraising call might reach multiple households across two or three generations, involving everyone in the philanthropic discussion simultaneously.

Think strategically and open-mindedly about how your nonprofit communicates and builds relationships – not just with donors but with your communities.

2020 was a year of shocking, unprecedented challenges in so many ways. But the nonprofit fundraising landscape is full of stories of adaptation, survival, and surprising areas of opportunity. Continue building relationships with donors and putting them at the center of your operations. Keep making big asks of your affluent donors, and be creative about keeping your less-affluent donors connected to your organization.

Nonprofits that can keep adapting and building deeper connections will thrive in 2021 and beyond. If you have questions about your organization’s future success, please contact your Aldrich Advisor.