12/31/18: The Day Fundraising As We Know It Died?

January 4, 2019
2018 may have been a year of another kind: a true foundational change to fundraising as we know it, and a new way to consider end-of-year.

2017 was amilestone year in charitable giving in the United States, surpassing the $400 Billion mark for the first time. Over that year, we’d done much thinking about the state of philanthropy as it related to the divisive political times, the diverse and increasingly urgent threat, as well as hownew generations of consumerswere leading the philanthropic charge.

The collective impact of these scenarios ultimately swayed the pendulum in our favor in 2017, but the impending tax law changes added an element of uncertainty that we can likely agree we all felt as we entered 2018. What we may not have known a year ago is just how much this, and other tumultuous circumstances that the country faced during the peak end-of-year fundraising period, would shift the balance. So, while 2017 was a banner year for the sector, 2018 may have been a year of another kind: a true foundational change to fundraising as we know it, and a new way to consider end-of-year.

What Came After The Grind On Giving Tuesday?

While competition for engagement and dollars was undoubtedly higher on Giving Tuesday – perhaps even more than we’ve ever seen – it was still a largely successful event for nonprofits across the country. Overall, dollars given were up, more organizations participated, and the competitive nature suggested that we, as an industry, have gotten much savvier with our digital fundraising chops. Because of the increasing emphasis over the last few years on Giving Tuesday, we’ve, in turn, approached the bulk of Q4 and Holiday with the mindset that it’s generally softer, and therefore, we need to be significantly more aggressive with spend.

And yet despite that continued grind, from December 20th on, we saw some standout trends emerge, including: lower gift volume, fewer outlier gifts, and increased variability in the last few days of December. Did anyone else feel anxiety or impending doom about missing budget as we inched closer to the New Year, and then see an unexpected year-over-year spike on December 31st alone? We saw something inherently different about giving patterns, with more of those who gave waiting until the very last moment.

Finally, and maybe even most surprising was that the increase in consumer confidence and retail spending during the holidays did not translate to philanthropic giving. Fake out, anyone?

What we seem to be saying: what’s historically been the most reliable giving season brought us some real challenges.

What’s Going On Here?

So, this all begs the question: what’s causing this? As we mentioned earlier, we believe the tax reforms had, and will continue to have a sizeable impact on charitable giving. Of course, the effect varies, and it’s difficult for any one nonprofit to know exactly how their current and potential donors are being affected, or how their incentive to give is changing. But, the changes were big enough to have a tangible effect on end-of-year.

What else? Market volatility caused widespread concern across the American population, with some of the biggest single-day swings we’ve ever seen, and a near freefall on December 24th. This inevitably influences how donors think about the amounts they can give, and in our case, it couldn’t have happened at a more critical (or frankly, worse) time. In a similar vein, we expect that the government shutdown will have ultimately had some influence on end-of-year giving.

What’s historically been the most reliable giving season brought us some real challenges.

And finally, another element that we may not be considering amidst all the distraction of the aforementioned, is that the donor we once knew is no longer. People’s way of thinking around impacting causes and creating meaningful change is not exclusively tied to traditional giving anymore. And while we may not want to admit it, this shift is something we’re still grappling with as a sector.

What Does It All Mean?

Now that we’re officially in 2019, and we’ve had some (well, only one or two) moments to reflect on 2018 and the challenging end-of-year season we just experienced, now is unfortunately not the time to rest. Things are changing, and we need to act quickly, and reset strategy and thinking accordingly, or risk more intense challenges in the future.

Some questions that we’ve considered internally:

If we now have to budget and think about strategy in a way that no longer leans so heavily on end-of-year giving, what does that actually mean for our overall approach?

What other membership or fundraising models should we be looking at?

How do we encourage small donors to increase giving in order to create more mid-level donors?

How can we grow sustainer programs where we have higher volumes of reliable monthly donations?

What can we do to evolve proactively with the changes in our donors, not work against them?

So, are we out with the old ways, and working our way into the new?

We’d love to hear your thoughts and stories about end-of-year 2018, and how you’re approaching these critical shifts in 2019.

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