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What we’ve learned about philanthropy since March—and what it means for the months to come

Nonprofit institutions have never experienced anything like the last six months.

In the U.S. alone, there have been more than 6 million documented cases of COVID-19. The global pandemic kindled an economic crisis that pushed the U.S. unemployment rate higher than at any time since the Great Depression. At the same time, the United States is dealing with an intense racial reckoning prompted by the Black Lives Matter movement.

Each crisis on its own would be enough to stress nearly any nonprofit institution. Taken together, the cumulative impact has likely produced the greatest strain on nonprofit institutions that any has experienced.

Social distancing and stay-at-home orders have pushed institutions to innovate on the fly. Those efforts have enabled us to learn a tremendous amount about what works—and what doesn’t—when it comes to fundraising in times of crisis. Those lessons, as well as our understanding of tumultuous periods over the past few decades, can help us understand some of what we might see in the months ahead.

What we’ve learned

There’s little doubt that many, if not most, nonprofits have faced significant challenges since March, when we launched a tracking poll that examines how nonprofit institutions have been impacted by the COVID-19 pandemic and resulting crises.

The good news is that nonprofits have become less pessimistic about the crises’ impact on their short- and mid-term fundraising since March, when much of the United States was under shelter-in-place or stay-at-home orders. The percentage of executives who expected the crises to have a “high” impact on fundraising over the following 30 days peaked the week of March 23 at 87%. As time passed, the situations unfolded, and fundraisers adjusted their tactics, that share fell to 40% in in late-August and early-September. There’s been a more modest shift when fundraisers look ahead to the next 90 days. 53% of respondents in March expected a “high” impact as looked ahead to the spring and summer, eight percentage points higher than the 42% who in late-August and early-September expected a “high” impact in the late-summer and fall.

While the share of respondents who expect a major short-term impact on their overall fundraising goals has sharply declined over time, it’s clear that the crises did hinder many organizations’ fundraising efforts. For example, 33% of respondents to the mid-August survey reported their organizations finished below their fiscal year 2020 numbers and 36% were flat. Perhaps not surprisingly, 81% of late-June survey respondents were planning to set their fiscal year 2021 fundraising at or below their 2020 numbers, including 50% of which set their fundraising goal below the previous fiscal year.

A historical look

Those results make clear that many institutions remain concerned about, and are preparing for, some short-term turbulence. However, if the current crisis follows historical patterns their concerns are unlikely to last. After all, charitable giving is remarkably resilient, as GG+A CEO John Glier detailed in his May article “How philanthropy might recover from a COVID-19 recession.” For example, total giving in current dollars actually increased in each year of the 1980-82, 1990-91 and 2001 recessions, despite declines in U.S. GDP. Immediately following those recessions, total giving moved to a succession of new highs. And while the “bounce back” was slower following the 2008-09 recession, total giving hit a new high within three years. It’s also worth noting that total charitable giving has increased or stayed flat in current dollars every year since 1979, with the exception of three years that saw declines: 1987, 2008, and 2009.

After adjusting for inflation, total charitable giving has declined nine times since 1979. Looking at the magnitude of the declines makes clear that philanthropy is remarkably durable during periods of crisis; even with those declines, the average annualized rate of change in total giving in inflation-adjusted dollars since 1979 is 2.8%.

 

Prior to the pandemic, philanthropy was on a strong upward trajectory; 2019 was the strongest year for giving in U.S. history. Giving from all sources was either at or near an all-time high, and giving to all but three charitable subsectors was also at an all-time high.

While the initial weeks and months of the pandemic stymied that momentum, we’ve seen many of our clients begin to recover by finding new ways to  engage donors and ask for their support. For example, 49% of August survey respondents saw an uptick in first-time donors in response to pandemic-related fundraising initiatives such as student emergency support and in-kind gifts of personal protective equipment. To build on that momentum, GG+A has worked with several clients on strategies to retain those first-time donors. For other clients, we are helping design unique virtual events with academic and program partners to broaden engagement. And we developed surveys for other institutions that gather real-time information about their philanthropy and programming to enable them to assess whether their efforts are working.

Although the future may appear murky, there is reason for hope in the months to come. After all, while giving rises and falls in line with GDP—it doesn’t stop. And creative tactics are generating results that could benefit institutions for years to come.

 

If you would like assistance planning for the months ahead, contact Suzanne directly at shilser-wiles@grenzglier.com.

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About the author

Suzanne Hilser-Wiles

President

 Suzanne Hilser-Wiles, President, partners with GG+A clients around the globe to help them elevate their fundraising by offering more than 25 years of experience in advancement, program building, and campaign planning and implementation. Throughout her career, she has helped design, rebuild, and reimagine programs by applying her experience with…