Ideas to Help Nonprofits Succeed in 2023’s Challenging Giving Season

The boom contribution years that followed the COVID-19 pandemic came to a screeching halt last year, with donation activity in the first half of 2023 continuing to be soft. As a result, there is apprehension and much breath-holding this year as fundraisers enter into the critical fourth quarter Giving Season of 2023.

After two years of record donations, fundraising ran into a wall in 2022. Donations were down by 6.4%, according to Giving USA. This was only the fourth year since they started to track donation activity in 1956 that donations had declined. Specifically, Giving Tuesday saw a significant decrease in activity in 2022, with people who gave $101-500 in 2021 down by 8% in 2022 and those who gave less than $100 down by 15%.

I wanted to share some ideas to help your organization succeed in what looks like it will be a challenging 2023 Giving Season from my perspective as a CPA and CEO of Connect360 Multimedia, a communications company that works with national nonprofits across the country.

Promote Early Giving Season Donations

Though fundraisers are concerned, one study did find that 69% of U.S. donors who donated to Giving Tuesday last year said they would likely donate again to the same charitable organizations in 2023.

To get ahead of the curve, some nonprofits are starting their Giving Tuesday efforts early this year. It is not cheating to get donors to make their contributions before Giving Tuesday on November 28^th.

Getting out in front of the competition in a competitive year like this one can only help. With Thanksgiving falling on November 23^rd wouldn’t it be nice to be thanking donors on Thanksgiving Day?

In the same way, it is wise to keep the Giving Season donation doors open for as long as you can and to send follow-up messages to people who donated last year but haven’t yet done so this year.

Help People with 401k Mandatory Distribution Requirements (RMDs) to Use Them to Fund Donations

It is remarkable how few people age 73+ know that they can make direct donations from the 401K accounts to charitable organizations and not pay tax on these withdrawals. You can help by educating them and making it easy for them to initiate these transactions directly from your website.

With the IRS now only allowing people who itemize their tax deductions to get credit for charitable deductions, using RMDs to fund charitable deductions makes so much sense. For example, a $1,000 donation made by someone in a 32% tax bracket will only have an out-of-pocket cost of $680, when the donation is made using pre-tax dollars.

Make it Easy for People with Donor Advised Funds (DAF) to Donate

Donor Advised Funds continue to grow in both dollar size and importance. Last year, people with money invested in just the Fidelity Charitable program donated over $11 billion. This was the most in Fidelity’s history. According to Vanguard, which has another big DAF program, many people are now setting-up recurring gifts earmarked for specific charities. This is money then will generate a continuous stream of annual donations for years to come.

You can help make the process for these potential donors easy by designing your donation website to seamlessly accept DAF donations and encourage recurring donations. You can even get around the issue of anonymity that sometimes exists with DAFs by getting donors to opt-in on the sharing of their names. This way you will know where the money is coming from, thank them, and possibly turn them into legacy donors.

Don’t Forget Younger Donors.

In 2022, mobile devices were responsible for the majority of all visits to nonprofit websites and 75% of Gen Z and Millennial donations. Since this group prefers to donate using mobile devices, it is your job to make that easy for them to do.

Gen Z and Millennials, more than earlier generations, want to know specifics about how their donations will be used and what the impact will be. They are less concerned with large overarching missions than granular information and personal stories. Your thank-you mailings are an excellent place to share specifics about how their donations will be used.

Keep Building Relationships

Una Osili, who oversees Giving USA’s research at Indiana University’s Lilly Family School of Philanthropy, told the Chronicle of Philanthropy that in uncertain times, “You don’t stop engaging with donors, you don’t stop working with them … We found that organizations that stopped building those relationships had a much harder time recovering.”

Considering that donations from individuals make up 67% of total nonprofit revenue, individual giving is really important. Not only does it support non-profits, but it helps people feel like they have a stake in and are able to help their communities.

It is “everyday donors [that] can sustain fundraising programs over the long term,” Christine Newkirk a senior fundraiser at Project Hope told the Chronicle. She probably summarized it best when she said, “Don’t take your foot off the gas pedal, because you’re going to need to work harder to get those donors and retain them.”

Even in down years there are organizations that succeed, either because their mission’s story resonated more or they just worked harder and smarter than the competition.