Overcoming the Charitable Giving Decline: How Keela Empowers Nonprofits

Introduction

According to the 2022 Giving USA report, a comprehensive analysis of philanthropy and charitable giving demographics in the United States, we are witnessing a concerning trend—charitable giving decline.

This report, considered a benchmark for tracking and analyzing charitable contributions, provides valuable insights into the state of our generosity. Unfortunately, the numbers paint a challenging picture, revealing a decrease in charitable dollars to various causes across the board. Here are a few findings from Giving USA’s historical data:

• Individual giving revenue declined by 6.4% (13.4% when adjusted for inflation), and we saw a large decrease in the number of donors, meaning that fewer people are giving or engaging in philanthropy work.
• Total giving fell 3.4% in 2022 to $499.3 billion, a drop of 10.5% when adjusted for inflation.
• Inflation, a tough economic climate, the flattening of total giving levels after the pandemic surge, and the decrease in the number of donors are the main cause of the decline.

But why should we be concerned about this decline indicated by Giving USA? Well, let’s think about the numerous nonprofits (even large-scale nonprofits) and charitable organizations that depend on these donations to fulfill their missions.

These dedicated groups strive to make a difference in the lives of those in need, whether it’s providing essential human services to underserved communities, funding medical research for life-threatening diseases, or supporting education initiatives for disadvantaged youth.

Charitable donations serve as the lifeblood for nonprofits, fueling their ability to create positive change. Without the necessary funds, their ability to provide crucial services, support those facing adversity, run international programs, and drive meaningful progress is severely compromised. In short, the decline in giving poses a significant challenge to the sustainability and effectiveness of nonprofits, ultimately impacting the well-being of countless individuals and communities.

In this blog, we will dive deeper into the factors influencing the decline and discuss potential strategies to reverse this troubling trend.

Why has Charitable Giving Declined in 2022?

From economic uncertainties to shifting donor priorities and the impact of external events, these dynamics are reshaping the landscape of philanthropy. There are numerous causes for a decline in giving, let’s explore the main highlights from the Giving USA report.

Economic Factors

In today’s rapidly changing economic landscape, it’s no surprise that financial considerations play a significant role in a prospect’s reasons not to donate to charity. Let’s face it, when times are tough, individuals and businesses may find themselves tightening their purse strings, prioritizing immediate needs and personal financial security. Here are some economic factors that contribute to the decline:

1. Economic Downturns: During periods of economic recession or financial instability, individuals and corporations often experience reduced disposable income and limited resources for charitable contributions. Uncertainty about job security and financial well-being can lead to a decrease in overall giving, from both individuals and donations by companies.
2. Wealth Inequality: The growing wealth gap within societies can impact charitable giving patterns. While the ultra-wealthy might continue their philanthropic endeavors, a significant portion of the population faces financial constraints, making it difficult to contribute to charitable causes.

Shifting Donor Priorities

Donor preferences and priorities evolve over time, reflecting societal shifts and changing perceptions of pressing issues. These changing priorities can divert charitable contributions away from certain causes. Here are a few factors contributing to the shift in donor preferences:

1. Cause Fatigue: Over time, donors may feel overwhelmed by the sheer number of causes vying for their attention. The constant barrage of requests for donations can lead to a sense of donor fatigue, where individuals become desensitized or skeptical about the impact their contributions can make.
2. Personalization and Connection: Donors are increasingly seeking personalized experiences and direct connections to the causes they support. They want to see tangible results and be involved in the outcomes of their donations. When organizations fail to provide meaningful engagement opportunities, donors may be less motivated to contribute.

Impact of External Events

External events, such as pandemics, natural disasters, and other crises, have a profound impact on giving. These events can divert attention, resources, and donor support away from regular charitable causes. Here are some ways external events affect giving:

1. Pandemics and Natural Disasters: When a crisis strikes, individuals and organizations often redirect their resources towards immediate relief efforts and emergency response. The urgency of the situation can overshadow ongoing charitable initiatives, which leads to donations declined for non-emergency causes. While much of life has returned to normal, we continue to see organizations being challenged by the pandemic.
2. Political and Social Turmoil: Unrest, political instability, or divisive social issues can reshape donor priorities. In times of heightened tension, donors may shift their focus to causes directly related to the prevailing social or political climate, resulting in reduced support for other charitable endeavors.

It is crucial to recognize and understand these factors that contribute to the decline in giving. By addressing these challenges head-on, we can devise innovative strategies and foster a renewed culture of generosity and support for nonprofits.

What to Do When Charitable Giving is on the Decline

As charitable giving experiences a decline, we the nonprofit sector must adapt and strategize to sustain our missions and effectively serve our communities. In the face of this challenge, here are essential steps nonprofits should consider taking:

1. Assess and Adjust Fundraising Strategies: In times of a charitable giving decline, it becomes crucial to evaluate your existing fundraising strategies and make necessary adjustments. This involves analyzing donor trends, identifying areas of potential growth, and exploring alternative avenues for fundraising. By staying proactive and adaptable, you can better position your nonprofit to secure much-needed support.
2. Cultivate Meaningful Relationships with Donors: Engage individual donors and build strong and lasting relationships with them. You should invest in cultivating authentic connections, showing gratitude, and providing transparent communication about the impact of nonprofit donations. By fostering personal connections, you can inspire loyalty and encourage continued support, even during challenging times.
3. Explore Diversified Revenue Streams: Over-reliance on a single source of funding can leave you vulnerable to fluctuations in giving. To mitigate this risk, you should explore diversifying your revenue streams. This may involve developing earned income opportunities, building corporate giving programs, applying for grants, or organizing creative fundraising events or Giving Tuesday and year-end fundraisers.
4. Embrace Technology and Data-driven Solutions: In the digital age, nonprofit organizations must leverage technology and data-driven solutions to optimize your fundraising efforts. Investing in a robust Constituent Relationship Management (CRM) system is essential. A CRM enables you to efficiently manage donor information, track engagement, personalize communications, and identify potential supporters. By harnessing the power of technology, you can streamline operations, enhance donor experiences, and improve fundraising outcomes.

Keep Tabs on Current Fundraising Trends

Use this guide to learn how the nonprofit sector is adapting to the increasingly digital landscape and get tips on how your organization can take advantage of current opportunities.

Download the Guide

How Keela Can Support You During Challenging Times

When it comes to navigating the complexities of declining giving, Keela is a valuable ally for nonprofits. Let’s explore how Keela can make a difference for your organization during challenging times:

Keela is a fundraiser’s CRM designed to streamline operations and empower organizations to achieve their fundraising goals.

Enhanced Donor Management and Engagement:

Keela simplifies and enhances the management of donor relationships, enabling you to cultivate meaningful connections. With Keela, you can:

1. Centralize Donor Information: Keela’s CRM functionality allows you to store and manage donor data in one place, making it easy to track interactions, giving history, donor preferences, and build your philanthropic strategy.
2. Segment Donors: Keela enables you to segment donors based on various criteria, such as donation history, engagement level, or demographics. This segmentation allows you to personalize your outreach and tailor communication to different donor groups effectively.

Streamlined Fundraising Campaigns and Appeals:

Keela provides the tools you need to plan, execute, and track successful fundraising campaigns and appeals. With Keela, you can:

1. Create Compelling Campaigns: Keela’s campaign management features allow you to design visually appealing and persuasive campaigns that resonate with your target audience.
2. Track Donations and Progress: Keela enables you to monitor donations in real-time and track campaign progress. You can easily build donation pages, set fundraising goals, view donor contributions, and measure the impact of your campaigns.

Data-Driven Insights for Informed Decision-Making:

Keela harnesses the power of your data to provide valuable insights that inform strategic decision-making. With Keela, you can:

1. Analyze Fundraising Performance: Keela’s reporting and analytics features give you access to comprehensive data on your fundraising efforts and produce an annual report. You can assess campaign effectiveness, measure donor engagement, and identify areas for improvement.
2. Make Informed Decisions: With data-driven insights, you can make informed decisions about your fundraising strategies, resource allocation, and donor stewardship initiatives.

Simplified Donor Communication and Stewardship:

Keela streamlines donor communication, ensuring that you can effectively engage with and steward your supporters. With Keela, you can:

1. Personalize Communications: Keela’s email marketing tools allow you to personalize your communications, sending targeted messages to specific donor segments. You can create customized email templates and automate communication workflows.
2. Manage Donor Stewardship: Keela helps you build strong relationships with your donors through automated donor stewardship journeys. You can schedule and track stewardship activities, ensuring timely follow-ups and meaningful interactions.

During challenging times, Keela’s comprehensive features and intuitive interface empower nonprofits to navigate the complexities of declining giving.

Tackle the Charitable Giving Decline with the Help of Keela!

See how Keela’s tools work to streamline nonprofit operations and empower organizations to achieve their fundraising goals.

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Conclusion 

In conclusion, the decline in giving in 2022 has posed significant challenges for nonprofits. The impact on these organizations, which play a vital role in addressing societal needs, cannot be understated.

However, as these challenges remain, there is hope and opportunity. You can proactively tackle the decline in giving by leveraging powerful tech tools. By utilizing a comprehensive CRM solution, such as Keela, you can enhance donor management and engagement, streamline fundraising campaigns, gain data-driven insights, and simplify donor communication and stewardship.

Together, by adapting to the changing landscape, leveraging technology, and nurturing meaningful relationships with mom and pop donors, we will see a charitable giving rebound!

If your organization is experiencing a decline in donation revenue, connect with us about how Keela can help!

The Indiana University Lilly Family School of Philanthropy prepares all of the estimates in the Giving USA report for the Giving USA Foundation. Keela is not associated with the Giving USA Foundation or the Lilly Family School of Philanthropy.