• Stein Strategies LLC

Don’t stop fundraising! Donor behavior during a recession and in COVID doesn’t look like you think.

I’ll lead by acknowledging this is an extremely challenging time for everyone and many nonprofits are feeling either an immediate decrease in revenue or anticipate decreases. Responding nimbly and creatively has become a necessity for nonprofits and it’s proving a challenge.

That being said, the anticipatory losses in revenue are not grounded in historical data and this post is meant to provide you with data-driven optimism. Donor behavior during a recession and present donor anticipations for their future giving doesn’t match the anticipatory anxiety in our industry.

Let’s talk about the Great Recession first, and I’m going to start with the data.

Most data shows during the Great Recession that total giving dropped around 15% over 2 years. Lilly Family School of Philanthropy’s reports shows that during and following the Great Recession, there was a continuing downward trend in charitable giving participation rates, with fewer Americans making donations than in the past. So the Recession led to lower total giving and fewer people giving, but is that the whole story?

The Chronicle of Philanthropy found Americans who earned less than $100,000 annually gave 4.5% more of their income from 2006-2012, meaning middle and working-class America made less, but gave more. Giving USA looked at 50 years of giving data and found people’s giving relative to their income stays the same despite the economic conditions. The same report from Lilly Family School of Philanthropy that reported less participation and giving during the Great Recession concluded with, “during recessions, many donors continue giving and nonprofits can continue raising funds.”

Now let’s talk post-Recession. Total charitable giving began exceeding pre-Recession levels far more quickly than anticipated. According to the Center for High Impact Philanthropy at The University of Pennsylvania, “[a]s our economy has bounced back from the recession, so has philanthropy, and at a much faster rate than experts predicted: giving in 2014 rose to $358.4 billion, surpassing pre-recession rates.

Now let’s talk about the present. Here are the results from the BBB Giving Alliance (on latest survey:

Charity’s survey:

· 80.5% of charities anticipate 2020 giving will drop

· Of those charities, 93.5% say they anticipate the decrease because donors will be less able to give and 54.5% say donors will likely redirect support.

Here’s what the 1000 adults surveyed shared:

· 48.2% are looking for ways to support charities now

· 52.5% say they expect to give the same in 2020

· 30.8% plan to give more to charities in 2020

· 47.7% Millennials and 60.8% Gen Z anticipate a rise in their giving

· 8.8% expect to give less

· 8% don’t know

Here’s another survey, this time from Fidelity Charitable (and available on their website).

· Most donors (79%) plan to maintain or increase the amount they give to charity this year.

· 56% plan to give to the nonprofits primarily support

· 16% will shift to new nonprofits serving on the COVID frontlines, but continue to give to nonprofits normally support.

· 8% plan on shifting their giving to a different organization.

*Methodology: This study was conducted between March 18 and 30, 2020 online among a national cross-section of 1,842 adults in the U.S. who donated at least $1,000 in 2019.

All this being said, data shows major giving, foundation, and corporate giving will look different in a recession. Data is also showing your communication and outreach will need to look different during the pandemic and in a recession. This public health and economic crisis will demand nonprofits pivot, but not necessarily the way you think.

The takeaways: Don’t assume your donors can’t, or won’t, give. Don’t assume you are not relevant to your donors even if you’re not providing a direct response to the pandemic. Don’t cut your fundraising and marketing budgets as a response to this crisis. Don’t stop fundraising! Your donors want to help, they anticipate helping, and no matter the economic conditions – they will stand with you.

Stay tuned for another silver lining that didn’t have a presence in previous economic downturns, donor-advised funds.

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