After the unprecedented events of the past year, nonprofit fundraisers have many questions about the performance of faith-based giving. In this post, we will explore the outlook for giving in 2021 and 2022.
Key takeaways for faith-based nonprofits
Online donation is growing
According to Giving USA 2021: The Annual Report on Philanthropy for the Year 2020, total charitable giving in the United States grew by 3.8%. Giving to religious organizations continues to capture a steady percentage of philanthropic dollars (28%).
This generosity is not surprising, but it is an immediate consequence of places of worship adopting online and mobile giving – nearly 55% of churches reported receiving higher donations during the pandemic.
Faith-based fundraising has opportunities to grow
The average donation in the faith-based sector is $176, compared to the overall average fundraising gift of $737. This could be for a number of reasons, one of which being that churches tend to promote a recurring, monthly giving model, compared with many other nonprofits that use a quarterly or annual approach, resulting in higher average gifts.
Millennials are staying connected to the church
Millennial donors are more active in religious nonprofits than we all anticipate. According to a 2017 study by Dunham+Company and Campbell Rinker, the top two charitable recipients of Millennial philanthropy are places of worship and other faith-based organizations. During the pandemic 74% of millennials donated money. That’s the highest rate among any of the generations polled. Gen Z (ages 18 to 24) had the second highest giving rate at 66%, followed by Gen X (ages 35 to 54) and baby boomers (ages 55 to 72).
2020 is an outlier
There will never be another year like 2020. Because giving patterns and trends deviated from the norm, resist the temptation to compare 2020 to any other year.
Between 2008 and 2019, giving largely consolidated. Donors began giving larger gifts to fewer organizations. That shifted in 2020. The number of smaller gifts (less than $250) grew by 15.3 percent while the number of larger gifts grew by only 8 percent. The number of new donors increased by 18.5%.
When looking at fundraising goals for 2021 and 2022, it would be wise to manage your expectations and also help stakeholders understand why it is unlikely to sustain 2020’s rates of new donors the highs in giving levels.
Being attentive to 2020 donors will bear fruit
Most organizations saw an increase in new donors last year. Yet, the national renewal rate of new donors is less than 20 percent. And the overall donor retention rate (new and returning donors) was only 43.6 percent in 2020 according to the Fundraising Effectiveness Project (2020).
Genuinely stewarding your new donors to avoid attrition in the coming years is a must-implement strategy. Create an authentic dialogue. Tell your donors how important they were to you last year, and – most importantly – that they are still important. Make the communication personal and show them the direct impact their generosity has made.. Quantify the giving into the action the monies supported. Make a strong case for them to connect emotionally for their renewal.
Suggested steps for improved fundraising results for faith-based organizations:
- Build connections with secular donors as well as those who are religiously affiliated. It is essential to engage potential donors who are outside the traditional sphere of your organization. Assess how to identify potential donors who may have an interest in your mission and specific projects. Develop creative ways in which individuals who are not affiliated could get involved with your organization and how to communicate those opportunities in an effective way.
- Continue to invest in your web and social media presence. As attendance continues to decline in most religious institutions, it becomes more and more important to provide a robust web and social media presence to keep congregants and others involved in the life of the organization. Provide multiple ways for individuals to connect, including live streaming services, podcasts, posts to both promote and report on events, reminders for various activities, useful resources for education and assistance, etc.
- Fundraising tools are evolving rapidly. Ensure that your online giving platform is up-to-date and easy to navigate. Giving online has become increasingly preferred among religious donors, as in other subsectors. Automated giving, in particular, is a win-win: it provides donors an easy way to contribute and the organization benefits from both the regular donations as well as the ease of processing and tracking.
The most striking implication of this study is that religious organizations aiming to increase the effectiveness of their fundraising campaigns need to be more agile and have the foresight to leverage both offline and online fundraising methodologies simultaneously.
Take a moment to read the full research findings. Implement them into your fundraising strategy. As a result, you will have a more data-driven strategy that will help you truly focus on your donor needs.