Fundraising Trends to Pay Attention to in 2021

Samantha Lego • Dec 17, 2020
fundraising trends for 2020

2020 was a doozy.

But beneath the foggy gloom, the nonprofit sector shone bright, illuminating its heart, grace, and scrappiness that makes it so resilient to the tribulations of time.

As the impact of COVID-19 spread, so too did the resources to combat it. NPO’s rallied together to secure resources when the government was unable. Folks from every corner offered their respective knowledge and expertise in online events that had planned to be live just weeks if not days before. The jump to adopting new technologies and increasing data literacy seemed to occur overnight. 

So, as we round out 2020, the question remains. Where do we go from here? 

Use these 2021 fundraising trends for the nonprofit sector to help you stabilize your fundraising efforts and continue to grow in 2021 and beyond. 

Unlock your potential by staying ahead of the curve

Download our 2021 Fundraising Guides for either Canada or the United States and gain access to tips, strategies, and checklists.

1. Reinventing cultivation using innovative technology

Online fundraising is not a new concept. It grew by 10% in 2019 and continues to grow. Yet, as everyone scrambled to switch their in-person meetings to behind screens, nonprofit organizations have readily adopted tech at a surprising speed. Considering its reputation for making do, and even thriving, with limited resources, we expect 2021 to yield even more tech-literacy as innovative solutions present themselves.

The rise of mobile

Pre-COVID, email marketing was lauded as the ruler of nonprofit communications, but it’s not the only channel that yields effective returns. Considering 50% of all web traffic comes from mobile devices (and rising), it’s time for more organizations to start embracing mobile-friendly means of stewardship. 

This includes mass communications and text-to-give initiatives which offer organizations of any size the opportunity to forge quick, easy relationships with supporters. With 75% of everyday consumers comfortable receiving SMS messages that they have opted into, text-to-give initiatives are a fantastic way to reach your constituents directly. Just make sure your donation forms are formatted correctly for mobile or you’ll see your conversion rates drop.

Email still has its place, but with a Click-Through-Rate on fundraising messages of 4.2% with SMS compared to 0.56% with email, mobile is ripe for further exploration in 2021.

Cultivation with Artificial Intelligence

According to a recent survey, more than nine in ten nonprofits worldwide continue to be negatively impacted by the COVID-19 pandemic. With widespread layoffs and a doubling down of already limited resources, it’s time to turn to technology to bridge the gap.

Nonprofits have a treasure-trove of data available to them. They just aren’t always the most effective at using it. Artificial Intelligence (and specifically Machine Learning) can take on tedious administrative work by sifting through donor demographics, previous donation amounts, event attendance records, and volunteer hours to give your team more insights into your supporters’ giving history, interests, and impact. 

And while 89% of nonprofits believe AI has the potential to make organizations faster, smarter, and more efficient, still just 23% utilize these types of solutions.

This mindset needs to shift in 2021 to best support your efforts, make better use of your time, and ultimately increase your impact. 

Remember, AI is here to help you, not replace you. Ultimately, making an intuitive and informed decision will always be at the discretion of knowledgeable fundraisers. 

 👉 Here are 11 AI fundraising tools that will change the way you raise money.

2. Changing donor landscape

The landscape of giving has changed. Yes, it’s moved online, but the makeup of who is giving, and more importantly, who could be giving, is changing. The state of modern philanthropy can be attributed to two driving factors going into 2021. 

The Great Transfer of Wealth

The Great Transfer of Wealth is the term coined for money changing hands from Baby Boomers to Millennials and Gen Z. While it’s predicted to happen en masse over the next few decades, this process has already begun. And the dollar amounts are vast. In the US alone, an estimated $15 trillion to $68 trillion will change hands. 

This is important because, with this transfer, the landscape of giving will dynamically shift in 2021 and beyond. 

Nonprofit organizations need to re-energize their fundraising efforts and reimagine who their messages are reaching, and where. Platforms like TikTok are the perfect place to engage with younger generations. While it seems alien to you, this is where the lion’s share of future donors are spending their time. 

And these platforms aren’t exclusive to Gen Z donors either. Take video game streaming: The average gamer is 34 years old and the eSports industry was worth $138 billion in 2018.

To make sure your organization is primed for the Great Transfer of Wealth, you can download our 2021 Fundraising Guide for strategies and checklists that will keep you on track.

The social justice movement and embracing multiculturalism

The nonprofit sector, along with every corner of our society has faced a long-awaited reckoning, fuelled by the harsh truth of inequality and racism permeating through our daily lives. Despite it’s earnest intentions, much of the sector is beset with the same issues of casual racism, sexism, xenophobia, ableism, and a general inability to perceive past deep rooted biases. 

It’s proven that the larger your organization, the more likely you are to have a Board of Directors that are 40+, male, and white. Yet when you consider the landscape of donors across all generations, there is a disparity in how that landscape is represented.

As we’ve seen with the great migration of wealth, more money is being transferred to younger generations, and as it stands, Gen Z donors are the most multicultural of any generation

2021 needs to see a shift in representation across all levels of organizations, and not just to meet a diversity quota. A study by Harvard Business review proves that diverse teams in for-profit companies actively improve the bottom line for companies and increase market share. Diverse teams not only make decisions 2x faster, but those decisions are often statistically better, delivering 60% better results than homogeneous teams.

Yolanda F. Johnson, the founder of Women Of Colour, recently had some wise words for our Donor Experience Conference on the topic of “Building Donor Diversity”.

Her advice for creating an inclusive environment and team with inclusive language is a vital first step to eventually reach out to increase the diversity of your donors. Those very same young, multicultural donors that will be soon deciding just where and when to donate.

Make no mistake, the recent upswing in civil activism across the country in response to violent acts of systemic racism is not a moment to seize upon for capital gain. It is a movement that must be taken to heart for the betterment of all who reside here. Your community no doubt has constituents of marginalized backgrounds, and they deserve the same opportunities and treatment as the white men who sit on those boards.

3. Doubling down on your metrics to maximize your impact

As 2020 took a nosedive, negatively impacting how nonprofits were able to operate, those same organizations also saw an increased demand for their services. With fewer resources on hand, organizations need to ensure that every dollar is being used effectively.



Diversifying revenue sources 



Most organizations have a donor base predominantly made up of donors aged 50+. Statistically, it’s shown these donors prefer to pay by traditional means: i.e., cheque or cash. This can be broken down further – the larger the gift size, the more likely it is to be donated via these traditional methods (larger gifts avoid high processing fees!).

On the other side of the coin, smaller, more ‘impulse’ based donations are rising in popularity. To facilitate these transactions, third-party platforms like Stripe and Paypal are also on the rise. They enable quick, easy donations on-the-go.

Data taken from transactions processed through Keela

What is evident from these graphs is that credit card payments are increasingly being replaced by third party processors, although credit cards still make up a substantial part of donations. But whatever way you look at it, virtual payments are rising. And this fuels a system where younger donors are becoming more prominent members of the giving landscape; donors who are more tech-versed, who prefer being cultivated in innovative ways, and care deeply about where their money is going – regardless of whether it’s $10 or $1,000.

As your organization heads into 2021, the most important takeaway from this is to diversify your fundraising sources. The more channels you have for collecting payments, the better. This way all corners of your constituency map are covered; from Boomers to Gen Z. 

Get a handle on your nonprofit revenue with the Fundraising Forecasting Tool

Tracking Key Performance Metrics in 2021 

Key Performance Metrics, or KPIs, will play a pivotal role in tying these trends together. 

These might sound like fairly “business-y” words for a nonprofit, but it really isn’t much more complicated than what nonprofits have been including as part of their programs for years: effective monitoring and evaluation.

Going into 2021, KPIs and Benchmarking are about keeping your organization in good financial health. They move you beyond confirming your fundraising efforts have worked, to ensuring they are actually growing and getting better, especially important amidst unstable economic landscapes. 

Some of the most common KPIs for nonprofits measure:

  • Donor Retention Rate
  • Donor Lifetime Value
  • Average Gift Size
  • Donation Growth Rate 

You can find a wealth of examples of what to measure online, as well as examples of how to measure them in our Ultimate Guide to KPIs.

These fundraising trends are powerful concepts that can be harnessed across small, mid-level, and internationally-backed nonprofits. By embracing technology and integrating new tools into your 2021 fundraising plans, you’ll find it easier to connect with your donors and beneficiaries, allowing you to drive positive change in the New Year.

 

If you’re interested in learning more about how these trends can help you raise more money, schedule a free demo with a Keela expert today.

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