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The State of Giving: What 2018 Taught us About Generosity

by | Feb 15, 2019 | Fundraising, Nonprofit

I would rather have it said, ‘He lived usefully’ than, He died rich.’

Benjamin Franklin

Last year we learned about the trends in American generosity and giving. Let’s take a step back to have a look at what the nonprofit landscape revealed in 2018.

There is one indisputable fact – America, as a whole, is becoming more and more generous. According to the Giving USA 2018 report, American companies and citizens donated over $410 billion to support various causes. That’s the largest amount our nation has ever given to nonprofits. To put things into perspective, this is close to 2% of our country’s GDP.  Even more astounding, 70% of these donations were made by ordinary Americans is even more interesting. This makes America the most generous nation in the world.  Impressive, isn’t it?   

What influences people to give?

What drives people to give? Is it their personal interest? Or the fact that they were moved by a nonprofit’s plight? Or maybe even the fact that giving is a norm, something that other people usually do? Last year, Lily Family School of Philanthropy (LFSP) decided to explore how gender and perceptions of others’ behavior influence giving to causes benefiting girls and women. The report revealed some interesting findings, which could change the way nonprofits communicate with their donors.

It’s no secret that women tend to be more interested in women’s and girls’ causes than men. Research has proved that the “gender gap fully closes for men and women who believe others are highly interested in giving to women’s and girls’ causes.” Thinking that others are interested makes you more likely to donate. The same goes for the perceived growth in popularity. In other words – if people think that a cause is gaining momentum, they’re more likely to contribute. Men generally consider the causes to which both men and women are supporting. Women, on the other hand, tend to be influenced by the decisions of fellow women.

Researchers recommend that organizations should emphasize positive trends in giving in their communications. This rings especially true for causes that lack social awareness or support, such as women’s or girl’s causes. At the same time, if men are donating significantly less to a cause, that particular nonprofit needs to work on visibility. Testimonials and endorsements from other men who support your cause could help elevate its importance to another level.

The donor paradox: fewer Americans donate more money

American nonprofits have an important trend to worry about. We’ve already explained that the total amount of donations has hit an all-time record. But an alarming fact is, that it’s too early to be feeling optimistic about the future of the nonprofit sector.  Recent research suggests that the number of Americans supporting nonprofits is actually going down. This means that the $410 billion record is all due to the fact that loyal donors are simply giving more money. At the same time, nonprofits struggle to maintain donor interest. In 2018, more than half of first-time donors never returned to make a second gift.

Considering all of the above, we can conclude that the fight for donor’s attention should be fought harder than ever before. Nonprofits should make building and maintaining strong donor relationships a strategic priority.

Nonprofits think social media is great for brand awareness, but they don’t bother to create social media strategies

Let’s have a look at social media and the ways nonprofits are using the opportunities that they bring. An overwhelming majority of nonprofits admit that social media is useful for brand awareness, and yet, only 30% of them actually have a social media strategy. In other words, nonprofits think that social media is great, but don’t bother to create a strategy that’d help them reap it’s benefits.

Most of us spend countless hours on social media. We use Facebook on the commute, post our food on Instagram, and we Tweet from concerts…. People use social to communicate with friends, interact with brands and discover stories. Social media is excellent for spreading the word about your cause and it also plays an increasingly important role in fundraising. Last year social media drove 40% of small donations (under $100) and 29% of donations between $101 and $1,000.

If you want to go social, here are some of the most important things you should keep in mind. You won’t be able to reap the benefits without a strategy. The first thing you need to remember – post great content, regularly. What do we mean by great? Great content educates, entertains and inspires. You need to tell the donors about your cause and the work that your organization does. You need to post interesting stuff – photos, videos, stats, basically whatever they would feel like sharing on their own pages. At the same time, you need to give them the stories that resonate, things that move and inspire to give. Honesty is the key – tell them about your joys, your sorrows, your victories, and failures. Sure thing, it may take you a while to figure out what content works and what doesn’t – but the fact is, you’ll have to experiment a lot before you get social media right.

Online vs. offline donations: 4 factors determine how people give

Online or offline? That is the question. What are the factors that drive how people give? According to the 2018 Donor Experience Study, new donors are much more likely to donate offline. While you may use digital tools to draw donors in and make them aware about your work, to land online trust you’d most likely need to start building relationships in person.

What does the study say about online donations? The average amount is $299. When donors wish to contribute higher amounts, there is an increase in the likelihood of donors going offline.  Age and wealth also play a role in giving. Elderly donors are the least comfortable giving high amounts of money online, while Millennials and affluent donors are the most comfortable with online giving tools.

An interesting note, donors are actively embracing mobile donations. While 7 in 10 people donate by using their phones, 46% of them do it logging in to a nonprofit website. Considering the fact that only 15% of donors send money by using apps, nonprofits still have a lot of catching up to do.

Favorite causes haven’t changed

Disaster relief, religion, education, health, and other local social services are on top of the American giving agenda. While the numbers differ across reports,  these are the causes that received the strongest outpouring of support in 2018.

Volunteers are coming back

For many years, multiple sources reported that volunteer numbers have been going down. Now, it finally looks like the tide has turned! The Corporation for National and Community Service reports that in 2017, a record number of volunteers have contributed their time to charity. The number currently stands at 77.3 million people (nearly 1 in 3 American citizens).

According to the Independent Sector’s estimate for 2017, the total value per hour of volunteer contribution amounts to $167 billion.

Boomers are the most generous generation, for now

Boomers make up the 41 % of donations made in 2017. The average American donor is a generous 60-something year-old who contributes an average of $1,061 dollars to charity every year. While there is a lot of talk about Millennial and Gen X giving, it looks like boomers are still intent on making a big difference. They’re the only generation that grew more generous over the last 5 years and they don’t seem to plan to stop giving. There’s a simple explanation for why the younger generations aren’t ready to catch up yet. While Gen X is approaching its prime giving years, Millennials and Gen Z have a long way to go. Millennials are building careers and raising families in an unstable world. Their disposable income is much smaller than the disposable income of the older generations. Put simply – they did not yet have the time to accumulate enough wealth that they could use on donations.

High Net Worth Americans are Intent on Delivering Change

Wealth means more than money to half of America’s young high net worth individuals (HNWIs). Indeed, they are twice as likely to cite the ability to create change through giving as a top definition of wealth. What’s more, two-thirds of them feel they have a personal responsibility to use their wealth for good. Giving is becoming a part of their identity.

Young women at the highest levels of wealth are particularly focused on using their fortunes for good. Many of them consider that making a difference is more important than accumulating wealth. In addition 3 in 5 plan to distribute their wealth during their lifetime. For comparison, only 16% of older women (boomer & mature generations combined) plan to do the same.

Interestingly, young affluent Americans are likely to support animal welfare, diversity & inclusion, and human rights causes, which makes them different from the older generations. Older HNWIs prefer to work on improving education, reducing poverty and helping religious and spiritual organizations. The only two interests that unite both of the generational groups are healthcare and the environment. Nonprofits should take these differences into consideration when communicating with high net worth individuals.

Overhead isn’t going away

Last year’s studies have reconfirmed the importance of trust.  As Give.org discovered, only 19% of donors trust charities completely. Greed and high overhead, which is generally defined as the amount of money that nonprofits spend on staff salaries, training, management and fundraising, are reported to be the most important reasons to distrust a nonprofit. Bad reputation, bad media, lack of honesty and transparency also serve as giving demotivators. Arts and culture nonprofits, as well as the organizations working on issues connected with wildlife and the environment,  are considered the least trustworthy.

Overhead is so important because donors have a tendency to think that nonprofits spend more money than they actually do. Strong communications strategies, as well as increased financial transparency,  could help alleviate donor distrust.

Donors and nonprofits need to help each other out

Donors are abandoning nonprofits. Some leave because they can no longer afford to spend hard-earned cash on things that may still be dear to their hearts. Others leave because nonprofits fail to preserve trust and maintain donor interest. One thing is certain – nonprofits will have to fight harder than everб before and MyWay2Help is here to help.

MyWay2Help is a platform that offers nonprofits the opportunity to build meaningful relationships with their donors, while giving donors robust and diverse ways to help their favorite causes.   By harnessing our collective passion to help, MyWay2Help enables nonprofits to add value to the lives of donors, while generating a steady stream of financial support in the process. In doing so, our platform makes helping go both ways. Our compelling and easy-to-use platform was designed to cater to the needs of all nonprofits – whether they are big or small. You don’t need to be an IT expert to register and get your official page up and running.

By using MyWay2Help, donors have several choices. They can support nonprofits directly, they can be sellers, or they can be buyers…all for a good cause. They can even do all three if they want! Our Auction and Marketplace modules allow users to list goods, services, and experiences for sale.  Sellers have the option to choose the percentage of the proceeds (20 to 100%) that will go to the nonprofit of their choosing.  MyWay2Help is preparing to launch two more features: network-branded gift cards for businesses and mission funding for individuals that need a helping hand to make a difference. 

Click here to learn more and become one of the first to hear when we’re going live! 

Takeaways

  • You can’t afford to lose donors. Building and maintaining donor relationships should be a strategic priority for your organization. 
  •  When it comes to targeting different donor age groups  – balance is everything. Elderly donors are entering their twilight years, Boomers will continue to dominate for years to come. Your long-term future, however, will depend on Millennial and Gen Z interest in giving. Don’t neglect donors because they aren’t ready to deliver the same level of impact just yet. 
  • Create a multi-dimensional social media strategy. Earn donor trust by communicating honestly, clearly and transparently. Be open about your expenses and actively spread the word about the impact that you’re making. Use the power of social pressure. Tell people about the popularity of your cause and the fact that it’s growing. And don’t forget to feature testimonials from both genders. 
  • Young high net worth individuals are extremely focused on giving, so help them find meaningful ways to use their fortunes for good. Keep in mind that there’s a significant difference in causes of interest between the youngest and the oldest generations. 

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