Institute for Charitable Giving

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Five Predictions & Preparations for 2023 Fundraising

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By Tammy Zonker, ICG Dean & Fundraising Transformed President

There’s been a lot of crystal ball gazing as of late. Many researchers, experts and thought leaders are looking at the economic forecast, Giving USA data, research, surveys and assessing general nonprofit sentiment. Trying to predict what 2023 may have in store for the sector, and specifically charitable giving.

I tackled this topic on The Intentional Fundraiser Podcast in mid-February. That episode was titled, Predictions & Preparations for 2023 Fundraising – episode #35.

I say, “Predictions & Preparation” for an important reason. It’s one thing to predict or anticipate what may likely happen. But those predictions are useless unless we prepare for those likely scenarios.

As Abraham Lincoln once said, The best way to predict the future, is to create it.”

Today, I want to share 5 predictions informed by many brilliant minds and bodies of research across the sector.

So what are those predictions? Well, let me tell you:

1. The number of U.S. households giving will continue to shrink.

2. Giving through donor-advised funds will continue to grow.

3. Retaining quality fundraising staff will be increasingly difficult.

4. Foundations will continue to give an increased percentage of assets, particularly to organizations led be people of color.

5. And trust-based philanthropy adoption will expand.

Let’s unpack the first prediction:

1.  The number of U.S. households giving will continue to shrink.

According to the most recent Association of Fundraising Professionals (AFP) Fundraising Effectiveness Project (FEP) report from Q3 2022:

• The number of donors giving fell by 7.1%

• Ninety-six percent of the decrease in the number of donors is attributed to declines in those giving less than $500.

• Overall donor retention dropped by 3.1%.

• New donor acquisition fell by 24.7% in 2022.

Giving USA continues to report overall increases in giving year-after-year. A record-breaking 6% increase in 2020, a modest 3% increase in 2021 (adjusted for inflation) … and of course, we’re anxiously awaiting the report on giving last year.

That’s the tricky part. If we just look at dollars given, it can mask significant declines in individual household giving year-over-year. Just like looking exclusively at revenue in our own shops, can mask a donor retention problem. We have to look at our data and donor-giving trends through multiple lenses to truly understand what’s happening with our donors.

From that position of clear understanding, we can build a strategy.

So what are the strategies, or preparations we can take to address this prediction of the continuation of shrinking household given?

Radical stewardship

• Thank you calls within 24 hours of gift receipt for all donors. We all know these calls, made swiftly will positively impact donor retention. Yet making it happen consistently appears elusive. When will we align our time, with what we know to be true or engage volunteer leadership in this critical effort? When will we make a data-informed case for investing in donor relations? We need to do the math; to quantify the return on investment of staff focused on increased donor retention.

• Impact reporting in multiple forms and media (print, digital, video). Sharing how supporter investment is making a difference through ethical storytelling and outcomes reporting. Understanding your donors, and how they prefer to receive information.

• Embrace new communication channels (texting, video, digital, and print). Let’s face it; open rates for text messages and emails containing video are significantly higher than traditional email and print communications. Don’t get me wrong, direct mail is NOT dead. I’m suggesting we complement digital and print communication with texting and video.

Prioritize retention at all gift levels: it costs 5x more to acquire a new donor than retain a current donor.

Invest in recurring giving programs that have retention rates averaging 70%. For example:

• Monthly Giving Clubs

• Leadership / Sustainer Giving Circles

• Women of Philanthropy

• Alumni Groups

Prioritize loyal donors at every gift level through peer-to-peer gratitude efforts. Recruit and engage board members and other volunteers to thank donors and volunteers.

Reimagine the criteria to be assigned to a development officer’s portfolio to diversify our donor file within under-represented groups, regardless of gift values:

• Supporters of color with a loyal giving history.

• Longtime supporters giving below the major gift threshold presently.

• Younger supporters may give more over time.

• Ambassadors who regularly amplify your communication within their circles of influence on and off-line.

2.  Second prediction:

Giving through donor-advised funds has rapidly grown in the past few years because they’re a flexible, tax-efficient way for individuals to support charities they care about. As you evaluate how effectively you utilize this giving channel, consider the following:

There are three categories of donor-advised funds:

• 61% National DAFs (for example: National Philanthropic Trust, Fidelity Charitable Gift Fund, Vanguard Charitable, Schwab Charitable Fund, etc.)

• 26% Community Foundation DAFs

• 13% Single-Issue DAFs (for example: Jewish National Fund, Nature Conservancy, etc.)

In 2022 DAF charitable assets were estimated at $235.96B – a 39.5% increase since 2020

Grants from DAFs to qualified charities totaled an estimated $45.74B – representing a 28.2% increase compared to 2020. 

The average DAF annual payout rate is above 20%.

How do we prepare to maximize giving through donor-advised funds?

• Identify DAF donors in your database. Who has already given to your organization through the community foundation, a national or single-issue donor-advised fund? 

• Explore utilizing a DAF prospect research service. Presently DAFinitive is the only searchable database available to help you find information about donor-advised funds. Check it out at

• Build relationships with charitable advisors in your community.

• Review your gift acknowledgment protocols. Of course, you send gift acknowledgment letters to the fiduciary. Do you also send a hand-written note, make a thank you call, and/or arrange visits with the DAF donor – unless they request no contact. Do you send stewardship reports to both the fiduciary and the donor of origin, unless specified otherwise? It’s time to go beyond what’s required, to do what’s most relationship-centered.

Get your organization DAF-friendly:

• Host educational programs with DAF fiduciaries, similar to how many nonprofits host planned giving educational programs with financial planners.

• Include inviting donor-advised fund messaging on your website.

• Add a “Give through my donor-advised fund” checkbox and messaging on appeal reply devices, pledge cards, and gift agreements.

• Ensure staff and board are comfortable talking about the basics of donor-advised funds. But never giving advice about charitable giving tax benefits.

3.  My third prediction: Attracting & Retaining Quality Fundraising Staff will be challenging.

Here’s a snapshot of the U.S. fundraising workforce:

• There are nearly 200,000 self-described nonprofit fundraising and public relations professionals in the U.S.

• Most U.S. fundraisers identify as Caucasian women possessing a bachelor’s degree or higher.

• U.S. fundraisers are paid an average annual salary of $85,657 (median $75,000). Of course, salaries vary greatly based on geography, education level, years of experience, and the type of nonprofit employer. Typically colleges and universities or healthcare systems pay more than human service or animal welfare organizations, for example.

• The field is estimated to grow at 15%, lagging significantly behind the demand from more than 1.5M U.S. registered nonprofit organizations.

That’s one of the reasons the Association of Fundraising Professionals headquarters is increasing focus on professional development and credentialing; and generally looking for ways to attract professionals to the profession and retain the fundraising professionals already working in the sector. If you’re interested in learning more about this listen to episode #30 of the Intentional Fundraiser Podcast where I talk with AFP Global Board Chair and Institute for Charitable Giving faculty Birgit Burton.

If you’re a fundraiser, you’re likely not happy. You’re not alone. According to a recent survey here’s how fundraising professionals feel about their jobs and the sector:

• 91% want more time to meet with donors.

• 92% say vacant positions are stressing their workload.

• 94% report feeling stressed and unappreciated.

• 48% say they’re likely to leave their position in the next two years.

• 28% say they are likely to leave the profession altogether.

• 82% say development roles are unappreciated and undervalued.

• 89% say they don’t have enough people on their team to achieve their goals.

So how might we attract and retain our fundraisers?

• Embody IDEA (inclusion, diversity, equity and access) principles and practices in everything you do forever. This is not a one-time effort to be checked off a list. IDEA must become part of your organization’s culture, period.

• Include salary ranges on job postings. AFP Headquarters and many AFP Chapters require the inclusion of salary ranges in order to post open positions for fundraising job seekers. It’s one more way to ensure equity through transparency.

• Welcome former star talent back. Many fundraising professionals who left positions during the Great Resignation are finding the grass wasn’t necessarily greener on the other side. Let the ones who got away know about positions they may be well-suited for now and invite them to apply.

• The new generation of employees are demanding a flexible work environment and schedule (work from home, hybrid, 4-day work weeks, etc.) We need to consider how we might attract and retain talent through creating culture of belonging, in a flexible work environment. It’s not always about how many hours you were in the office or in front of a screen. Rather it’s about how effective you are at building lasting relationships and achieving measurable objectives.

• Build trust with individuals and teams within your area and throughout your organization. One way to do that is to include development staff in decision making. Doing so will likely increase understanding, trust and team cohesion. It will also strengthen your leadership pipeline.

• Develop staff with on-going personal and professional development and leadership opportunities and experiences. When people are learning and growing; they’ll be far more satisfied on your team. 

 • Lastly, maximize the power of recognition. It costs us almost nothing or very little to acknowledge and appreciate co-workers with kind words. Just understand each person’s recognition preferences. Some like public recognition, while others prefer more private acknowledgment. Just like with our supports, a little gratitude can go a long way!

Let’s talk about my 4th & 5th predictions together:

4) Foundations will continue to give an increased percentage of assets, particularly to organizations led by people of color.

5) And trust-based philanthropy adoption will expand.

Now, we all know foundations give from assets. And just like our own investments, most foundation investments have also decreased in value in the past year or so. Even so, an increasing number of foundations have publicly said they’ll give a higher percentage of assets. And many have expressed a growing interest in investing in organizations led by executives of color.

Here are the attributes of trust-based philanthropy:

• Trust-based philanthropists and foundations often give multi-year, unrestricted operating support. They do so, based on a belief that nonprofit organizations best understand the needs of the communities they serve.

• The foundation performs upfront homework on the nonprofit. Your transparency is an important asset in trust-based philanthropy. Are you high-ranking on watchdog sites such as Charity Navigator and Guidestar? Is your information complete and current?

• Are your prior year’s audited financials available? Does your website have the most recent annual report available for download? Is each of your board members listed on your website and in your annual report? Is there evidence that you truly embrace IDEA principles in your organization?

• Trust-based philanthropists and foundations seek to simplify the grant application and post-award reporting process. Seeking true partnership and aiming to dissipate traditional power dynamics.

How do we attract trust-based philanthropy?

• Build strong relationships with the foundation staff and board. Leverage your board members to strengthen connections where existing relationships exist.

• Inquire about their perspective on trust-based philanthropy. Share articles and white papers on the topic.

• Demonstrate organizational transparency as described earlier.

• Communicate your clear mission, vision, and theory of change. What is your big, audacious dream for your community and how are you aiming to achieve it? How, where, and to whom are you reporting progress? Where and with whom are you collaborating?

• Demonstrate consistent, relevant, impact measurement and reporting practices.

• Maintain good board governance & fiduciary management.

• Achieve 100% board giving. Believe me they’ll ask, and you want to proudly say, “yes!”

These are my five predictions for fundraising in 2023. I believe that when predictions meet preparation, we have the ability to lead with confidence.

Cheers to you and your ability to navigate whatever 2023 brings so that you can transform the world or your corner of it.

tammy zonker 5 predictions

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