9 Top fundraising trends for 2023
In the past few years, fundraising organizations have seen an incredible influx of new donors wanting to contribute to their causes. According to Giving USA’s 2021 report, an estimated $484.85 billion was donated to US charities in 2021—a four percent increase over 2020’s total. And it’s no surprise—2020 and years following brought hardships and uncertainties for many, inspiring people to help out where they could. But what’s in store for 2023?
While many nonprofits and other fundraising organizations have begun to recover since the pandemic, the world is preparing for another tumultuous year. Rising inflation and interest rates, sky-rocketing fuel costs and a worldwide cost of living crisis will all have an impact on nonprofits’ ability to raise funds.
To launch strong into 2023, organizations and educational institutions must face the coming year’s challenges head-on and learn the strategies and behaviors that will allow them to cultivate strong donor relationships, retain existing donors and attract new donors—even (and maybe especially) under difficult circumstances.
The following fundraising trends have been identified as those most likely to shape fundraisers’ strategies in 2023. So read on and get ready to tackle the new reality with strength and foresight.
Fundraising trend #1: Personalized outreach is no longer a nice-to-have
No donor likes a generic thank-you email, or worse, a bland and impersonal request for a donation. Fundraisers have increasingly understood this and have taken great strides to make sure that their teams are equipped with the right information needed to make all their donor communications personal and meaningful.
In practice, this means not only maintaining an up-to-date and relevant donor database but also using the information it contains to extract those relevant details and create personalized communication and requests. With more and more people tightening their belts in these precarious times, personalized outreach is more important than ever before, but it is also one of the most time-consuming and difficult jobs on a fundraiser’s plate. Fortunately, AI-enabled fundraising software (like Raise from Gravyty) can alleviate some of these pressures by cutting out much of the grunt work involved in personalized outreach.
Fundraising trend #2: A donor retention strategy is critical for ongoing growth
Donor retention will be critical to keeping cash flow strong this year. It is easier and cheaper to build on past successes by maintaining good relationships with existing donors than to keep launching entirely new campaigns. Existing donors are already familiar with your organization and have been attracted to your message in the past. Research corroborates this, showing that the retention rate for first-time donors is just 20%, while repeat donors are 60% more likely to stick around for the longer term.
To succeed at donor retention, you need a strategy as well as a way to measure your success. Tracking donor retention will allow you to identify how well you are succeeding in this important activity, identify any lulls in donations, and make necessary adjustments to restore giving to its former levels. AI-based fundraising tools can help you track this all-important information.
Fundraising trend #3: In-person events are back
Since the post-pandemic return to reality, people have been thirsting for real-life events where they can meet and mingle in the flesh. That said, the behavioral changes triggered by the pandemic are certainly lingering.
Over the last few years, most people have been forced online, at least in some situations, and have begun to appreciate the speed, ease, and conveniences of online events.
In 2023, the best approach will be to cover all bases. Offer a range of online and in-person events to make sure you cater to every taste. To boost engagement of your new and improved in-person events, reach your donor base in a personal and meaningful way. Your donors are flooded every day with solicitations to donate and participate in organizations’ missions; make your organization stand out with custom and personal messages made specifically for them. A personalized video messaging tool like Gratavid from Gravyty can help you steward, invite and thank donors when it matters most.
Online events like Giving Days that allow for real-time chat and fast online donations may be particularly attractive to Gen Z and younger millennials, as well as being a highly effective way for you to boost donations. Digital fundraising technology like Advance from Gravyty allows organizations to create fully branded, gamified giving experiences for their donors to keep them engaged and inspired to participate.
Fundraising trend #4: Trust-based fundraising is in
During trying times, people are naturally more risk-averse. To retain donors and attract new ones in 2023, you will have to focus intensely on building trust with your donors and constituents. The core of trust-based philanthropy is relationship building. Just like with any other relationship, nonprofits, educational institutions and other fundraising organizations will have to work hard at open and honest communication, listening and learning about their donors, and being responsive at all times. It is also particularly important to be transparent about your use of funds and to be ready to promptly share any information that donors ask for.
Fundraising software will help staff keep up with many of the actions that help build trust including thanking donors within 72 hours of each donation, sharing impact stories, asking donors for feedback and remembering donors’ birthdays and anniversaries.
Fundraising trend #5: Fundraising technology will ease staffing and resource challenges
Global recession and periods of economic uncertainty are not the best times to onboard new staff members. Like many fundraising organizations, you might have to make do with the small but dedicated staff you currently have. While your staff members are likely to be stressed and time-crunched under these trying conditions, there are tools that can alleviate their daily burdens.
AI-based fundraising tools like Raise from Gravyty can cut out some of the most laborious donor cultivation activities enabling them to achieve so much more with their time. For example, Raise uses AI to scour your CRM and identify who to approach, when, and with what request.
Raise also drafts outreach emails complete with personal details and mimics each fundraiser’s personal communication style. These functions can cut hours of research time out of a fundraiser’s day and enable them to cultivate more donor relationships in the same amount of time.
Fundraising trend #6: Improve community connection with your cause
Building and maintaining community is something that is steadily growing in importance in the nonprofit world. As much as your donors support you, you need to support your donors and make sure they feel good about giving to your organization.
To survive and thrive in 2023, organizations must be engaged in and relevant to the community they seek to serve. This means getting out and communicating with community members and finding out what it is they value.
Running both online and in-person events will allow you to meet your people and build deeper connections. Questionnaires and surveys can also help you gain a better appreciation of who your community is and what makes them tick.
Most importantly, communicate regularly and meaningfully with your community. Send out frequent digests, newsletters and reports about your activities so you remain at the forefront of their minds. Bear in mind that personalized and targeted communications are more effective than generic mass-produced ones.
A community network platform can help you drive participation, engagement and trust in your member base, making them more inclined to support your causes long-term.
Fundraising trend #7: Flexible giving and participation options will be the new norm
If one word can be used to define what will help organizations survive 2023, it is “flexibility.” Nonprofits, schools and other organizations will need to be inventive and find new and diverse ways to raise funds rather than simply relying on tried and tested methods that may no longer be effective.
We’ve already discussed this in the context of planning a range of online and in-person events. Creativity must also be applied when deciding on the types of events on offer. Think about what your audience needs today and dream up new offerings to try and keep them engaged.
Another area in which flexibility is important is that of payments. Online giving grew by 12.1% in 2021 over the previous year showing how well people adjusted to the changes triggered by Covid. While mailing a donation slip might have worked in the past, today’s audiences want the convenience of paying for a donation pretty much any way they choose.
The key in 2023 is to make it easy for donors to donate in a range of ways especially via mobile devices and on the fly. Offer a wide range of payment methods, including those from digital wallets, peer-to-peer and online transaction portals (such as PayPal, Apple Pay, Google Pay, Venmo, and Facebook). QR codes can also be a great help to this end.
Fundraising trend #8: Expect a decline in lower-level gifts (and take donor stewardship more seriously)
A recent report from Chronicle of Philanthropy suggests that the number of small gift donors fell significantly in the first half of 2022 as compared to the previous year:
Small donors may not make as much of an impact individually as big-ticket donors, but every fundraising organization knows how much their impact adds up over time—especially if they give repeatedly.
It’s important to appreciate that small donors are likely to be the worst affected by the current economic turmoil. This means they will think more carefully about every penny they donate.
This makes stewardship all the more important. Keep the lines of communication open throughout the year and not just at campaign times to make sure your smaller donors still feel involved and appreciated, even if they can’t give at this time. Hopefully, things will pick up, and they can make a gift in the future if they are still connected to your organization.
Fundraising trend #9: Finding new donors and increasing donor participation is critical for the donor pipeline
Despite your best donor cultivation efforts, some will inevitably fall by the wayside. It may be because their priorities have changed or due to financial challenges. Either way, you will want to lessen the impact of these losses as much as you can. This means remaining mindful of where your next donor is coming from at all times and actively planning how to onboard new donors.
As well as working to grow your donor pipeline, you also need to keep existing donors engaged and interested. Knowing as much as possible about your donors can help you do this effectively. An AI-based fundraising tool can help you identify new donors as well as decide when it’s time to reach out to existing donors. It can also help you decide exactly how to reach out and what to say—whether it be a request for a donation, a simple activity report or a birthday greeting.
Be flexible to survive (and thrive!)
2023 will be characterized by flexibility. In tumultuous times it’s important to be as adaptable as possible and nonprofits that move with the times will be able to cultivate existing relationships and build new ones effectively. Fundraising technology will be key to helping alleviate many of the burdens fundraisers face in building meaningful relationships with donors.
Learn how our fundraising suite can help you cultivate, retain and steward your donors easier, faster and more efficiently so your organization can thrive despite the challenges of 2023. Let’s talk.