# Crisis crystal ball: the future of fundraising?

- Link: https://fundraising.co.uk/2020/07/07/crisis-crystal-ball-the-future-of-fundraising/
- Published: 2020-07-07T12:17:12+01:00
- Author: Bernard Ross

**The pandemic and protests are creating uncertainty in almost every sector, including
philanthropy. Many of these will be discussed at the IOF convention. There are some
big unknowns.**

 

• How will COVID-related giving and the long-overdue focus on racial injustice affect
the funds we’ll raise from _individuals_ in the coming years?

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• What do the bold moves of _foundations_ — such as Esmee Fairbairn, Paul Hamlyn—
to increase unrestricted money in the next three years portend?

 

• As _corporations_ cut jobs and shareholder dividends, will they continue investing
in the communities they serve?

 

With that much uncertainty ahead, it’s easy to go from handwashing to handwringing.
And the challenge is that while historical trends, even recent ones, provide insights,
it can be akin to trying to see the road ahead by looking in the rearview mirror.

 

What’s the alternative? One approach is called the Delphic Panel Approach, in which
you ask a team of experts to consider future questions and offer their opinion on
likely outcomes based on their experience an insight. That’s exactly what we did
to look ahead down the highway in the USA. We asked 20 of the smartest fundraising
experts in the United States we know what to expect for philanthropy over the next
three years. They included the directors of development of some of the largest humanitarian,
educational, cultural, and social service agencies in the US, as well as a sprinkling
of the most experienced consultants.

 

Our goal was to help create a clearer picture of what the future might hold in the
US, based on their opinions (albeit expert opinions). We share the results below
for information. And we’re now talking to UK experts to create the same data set.

 

 

 

![Uncertainty quote by Bernard Ross](https://wfay6x.infiniteuploads.cloud/2020/07/
uncertainty-handwashing-handwringing-bernard-ross-quote.png)

 

 

 

## Clues from 2019

 

Before diving into the results of our Delphic survey, we turned to a resource for
excellent historical data on philanthropy that everyone in the US can access. The
longest-running, most comprehensive philanthropic survey is [Giving USA: The Annual Report on Philanthropy](https://www.givinginstitute.org/page/GivingUSA),
published by the Giving USA Foundation. The most recent instalment was released 
in June month.

 

Key findings for 2019 include:

 

• Individual giving remains the largest source of contributions (**69%**), which
totals **79%** when you add bequests.

 

• Looking at growth in sources, corporate giving increased by **13.4%** (though 
note that this includes Gifts in Kind – not the most fungible of resource), and 
giving by individuals increased by **4.7%**, driving an overall increase in giving
of **4.2%**.

 

• Recipient sectors who benefitted most were ones where high-net-worth individuals
tend to concentrate their giving: with public-society benefit increasing **13.1%**,
arts,

 

culture, & humanities increasing **12.6%**, and education increasing **12.1%**.

 

• Philanthropy is often driven by underlying economic results, and 2019 was a strong
year with the S&P 500 increasing by roughly **29%**, personal income growing **4.4%**,
and gross domestic product growing by **4.1%**. So you could consider the longer
term impact as the economy struggles in the next three years and beyond.

 

 

 

## Predictions for 2020 and beyond

 

Next, we turned to our selected group of 20 peers—all veterans in the fundraising
profession, ranging from the leaders of development operations for large multi-sector
nonprofits to consultants who deal with nonprofits of a variety of sizes. All were
able to take a national view.

 

All completed the survey in June 2020. The results were remarkably consistent across
the individuals and the different industries we surveyed.

 

Expected growth for funds raised. Of those surveyed, **61%** were reasonably confident
that philanthropy overall would grow during the next three years. The spectrum of
growth expectations are illustrated below.

 

 

 

![Pie chart showing expectations of growth from US fundraising leaders](https://
wfay6x.infiniteuploads.cloud/2020/07/bernard-ross-us-expectations-covid19-202007.
jpg)

_Expectations of growth from US fundraising leaders_

 

 

 

When we drilled down into % expectations of growth among our optimistic cohort these
ranged between **5-15%**. For the minority – 22% – who foresaw a shrinking market,
the average was **5%**, though one pessimistic outlier was concerned about a possible**
20%** drop.

 

Surprised? Well during a crisis, you might imagine contributions would dramatically
decrease, and stay there for a while. However, the long-term Giving USA data shows
us even the steepest recent recessions tend to recover in five or fewer years (in
current dollars). Our top respondents mostly agree: a decline in giving is not likely
to be long-lasting and there is hope for growth.

 

 

 

## What were the investment predictions?

 

We asked out top team for their key investment predictions.

 

• The overwhelming majority (**67%**) of respondents suggested that their organisations
or clients would be investing more in fundraising during the next three years, with
only 5% indicating that their organisation or client would spend less. The implication?
Avoid austerity…

 

• However, there is more challenging news for fundraising jobs. Respondents were
fairly evenly split regarding retaining fundraising staff and hiring more fundraisers.

 

No one suggested their organisation or client would have a net reduction in fundraising
professionals over the period. So despite the short-term news of layoffs, there 
should be opportunities in development.

 

• Regardless of the near-term impact of COVID, veteran fundraisers anticipate organisations
adding more accelerant to the fundraising fire. If your board or senior

 

managers recommend cutting investment or reducing development staff, our expert 
panel suggests the smart money is on the opposite.

 

 

 

## Where will growth come from?

 

Another part of the survey explored where specifically growth would come from- in
terms of channels and sources. Here’s a headline summary.

 

### Individuals remain essential

 

• Respondents overwhelmingly agreed that growth in future fundraising revenues would
come from individuals. Our senior fundraisers anticipate gains from bequests, major
donors (**>$15k**), and regular/routine/sustainer donors.

 

### No change or reduction in other streams

 

• Outside of Individuals, most other forms of fundraising were expected to remain
the same or decline.

 

• Half of respondents predicted a drop in corporate giving, with only three individuals
hoping for an increase.

 

• No surprise, the only component of individual giving expected to retreat was community/
event fundraising.

 

• The importance of Individual giving remains consistent with Giving USA’s four 
decades of research.

 

### Drive acquisition with digital

 

In terms of investment in specific fundraising acquisition channels:

 

• Nearly all of our senior thinkers thought that their organisations or clients 
would be spending more on digital. (No one suggested that they would be spending
less).

 

• Other growth areas identified by the survey include DM, DRTV, and a resurgence
in telemarketing.

 

• Perhaps surprisingly, our experts were evenly divided on whether face-to-face,
difficult in COVID settings, will continue to perform. We’re doing more work to 
study this.

 

• The one channel most clearly in retreat in everyone’s opinion is – no surprise–
print advertising.

 

One further thought: several commentators suggested organisations need to develop
a digital strategy – not just a digital presence. It’s not just COVID that is driving
this – the changing tastes and preferences of donors, as well as the fluctuating
state of our world, requires it. The interesting follow up question is where to 
focus your digital dollars- anyone remember when SnapChat was invincible? And do
you reject Facebook on ethical grounds or simply hold your nose and work with it?
Anyone monetising TikTok yet?

 

 

 

## Why not have your say in a UK version?

 

A survey is just a survey. And opinions, even those offered by super smart and experienced
people, are only opinions. And this is US data. So we’re about to undertake a complementary
phase of this work creating more detailed UK scenarios to aid planning. We’ll be
sharing what we learn in the next few months. If you want to know more about how
scenarios work [have a look here](https://www.managementcentre.co.uk/blog/scenario-planning/).

 

We’d also love to know your opinion on growth opportunities. If you’d like to add
your opinion, we’re looking for up to 100 UK respondents to participate in the same
survey taken by our US experts . If you reckon you’d like to add your view, you 
can [access the survey here](https://www.surveygizmo.com/s3/5700675/UK-Fundraising-Market-Fundraiser-Confidence-Survey-2020).
As a bonus, if you share your views, you’ll gain access to the detailed outputs,
which may be useful for your own peace of mind or to share with your board or senior
colleagues.

 

 

 

**_Bernard Ross_**

 

_=mc consulting_

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