Poor Year-End Giving: Reasons or Excuses?
It’s clear from the moaning and groaning reaching our Agitator ears that, for many, year-end giving fell short of expectations and projections.
Just how much off the mark? Results vary but overall the shortfall may be as much as 25% for some organizations. For others there was no shortfall, and, in fact, 2018 year-end exceeded 2017 totals. There seems to be no pattern—at least no patterns that are identifiable until the benchmark numbers from Blackbaud and the Fundraising Effectiveness Project come out in a few weeks.
The most specific information we’ve seen so far came last week from M+R, the digital consultancy that indicated “Some nonprofits experienced year-over-year growth, but overall December fundraising returns were down for many organizations by a little or a lot.”
In their posttitled What the heck just happened? Riding the December digital fundraising rollercoaster: exciting, scary, a little nausea-inducing! M+R summarized what they know so far about year-end digital giving as compared to 2017’s digital returns. They conclude:
“In short, December was not quite the celebratory, champagne-popping, record-breaking year-end digital experience that many nonprofits have grown used to over the past few years” For example:
- “Some nonprofits experienced year-over-year growth, but overall December fundraising returns were down for many organizations by a little or a lot.
- “November’s Giving Tuesday fundraising results were generally up year over year by a little or a lot.
- “December’s email results were down over last year’s returns for half of organizations and up for the other half.
- “Unsourced web giving was more down than up.”
In the words of M+R, “What the heck happened?”
Of course, whenever there’s a drop-off of income there are as many theories and hypotheses as PowerPoints at an AFP conference. M+R offers up these hypotheses to be explored:
- “Did the new tax law impact giving for any or all donor segments, particularly mid-level givers?
- “Did political fatigue, wins, or changing issue focus impact giving (especially for politically-oriented organizations)?
- “Did the increased focus on Giving Tuesday decrease December giving?
- “What was the role of technical challenges—in particular email deliverability—on revenue?
- “Was 2017 such a strong online fundraising year for many organizations that 2018 was a return to “normal” for some or many groups?
- “Did the recent turbulence in the stock market lead donors to be more conservative in their giving?
- “Is email dead? (That last one was just for funsies!)”
While it’s certainly worthwhile exploring any and all of these hypotheses there’s very little that can be done even when some of them prove out. For example, the impact of the new tax law affects most every 501 (c ) (3), just as ‘political fatigue’ may affect the majority of 501 (c ) (4) organizations. And the roller-coaster effect of December’s stock market probably hobbled the generous spirit of many donors regardless of type of organization.
Of one thing I’m certain. Even before any attention is paid to serious analysis there will be a stampede to the horrid fundraising solution of first and last resort — “Let’s mail more.”
And so, without regard or analysis of the role played by the blizzard of fourth quarter postal and digital communications –Giving Tuesday, Match Gift Appeals on Top of Endless Matching Gift Appeals, ceaseless year-end reminders—the volume and frequency knobs will be turned up all over Nonprofit Land. (See Agitator’s Donors are Turned Off by Excess Solicitation.)
Therefore, at The Agitator’s weekly Editorial Meeting and Food Fight we’ve decided to take a look at two issues we believe are beginning to wreak havoc in the sector regardless of year-end giving or not: Volume and deliverability.
We’ll be back on Friday with a look at deliverability and the reasons you should be mighty worried.
Roger
10 responses to “Poor Year-End Giving: Reasons or Excuses?”
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Roger, the stock market plunged at worst moment possible imaginable. You know as well as I how many households, especially ones likely to give, have money there. The impact of the political upheaval and roller coaster we have been seeing (and everything that means to progressive nonprofits) is undeniable. And most of all, the impact of the so called tax “reform” (I’m already seeing surveys showing that a high number of donors who didn’t give in December cite that as the reason) is extraordinary. I’m honestly disappointed in the slant of this article. If there ever was a time when we have a pretty clear *explanation* for what went on it is this moment in our history. I think the tilt toward how these factors may be used as an *excuse* does us all a bit of a disservice. Sorry my friend.
Harry, could you share links to any of the surveys you mention? I need to bring myself up to speed on this topic.
Gail, we are trying to figure out how much we can share since what I am citing is proprietary/confidential belonging to our clients. I think I am ok sharing that roughly half — yes half! — of donors who did not give at the end of 2018 are explicitly citing the change in the tax law as their reason. We had expected significant impact but this is pretty stunning.
Harry, I agree with the points you make, but my position on those is that almost every nonprofit in particular sectors is subject to the same circumstances. In my mind these sort of universal or near-universal external circumstances are similar to an electrical power outage. Everyone is subject to darkness. Some light candles, some remain in darkness.
I’m as appalled as you about the drop off and indeed the tax laws and the December’s stock market probably exacerbated the situation, but the decline is not new.. Benchmark report after benchmark report over the past several years has been chronicling the decline in numbers of donors and retention rates, while studies show rising exasperation/frustration on the part of donors over the widespread “spray and pray’ tactics of the sector–particularly where digital is concerned.
Unlike tax reform or the stock market, “deliverability’ and ‘volume’ are two factors that individual organizations can control, and that’s why we decided to focus on these two elements.
There may be other elements beyond volume and deliverability as well. In fact, I strongly believe there are because the decline this year wan’t universal. In fact some organizations report that they posted stronger 2018 returns than those for 2017.
As always, Harry, your insights and criticisms as well as your willingness to share are valued. Keep ’em coming.
Roger, my own sense is that something new and out-of-the ordinary *did* go on this fall, particularly in the final few weeks of the year. Some groups indeed were up a little, but many weren’t, and (while the final numbers aren’t in) some appear to have experienced sudden, ferocious, jaw-dropping declines. I think it really was different this time. Everything you say is true and you are right to focus us, your devoted readers, on what we can do and constructive steps we can take. From what I see, you are pointing us in the right directions for sure. But today I put myself in the shoes of, for example, the CDO who got dragged across the coals last week because the bottom dropped out of her fundraising program during the final weeks of 2018. Fundraisers are far-to-often guilty of making excuses for poor results. But this is a moment in history where I think we need to spread the message, loud and clear, that factors beyond fundraisers control are having big impact. Thanks so much for your thoughtful response to my earlier comment — I am grateful and impressed as always. Now I just hope that my CDO friend’s boss read beyond the headline of your post this morning!
I look forward to the Agitator covering email deliverability as a pivotal topic on Friday. Too often it’s overlooked as an external factor that organizations can’t control, but it is now our responsibility to ensure that emails reach our most engaged supporters’ inboxes. Email isn’t dead – but email results will suffer if you leave deliverability unchecked. All organizations need an email expert with a baseline knowledge of how to maintain healthy email practices. So thanks for making sure we’re all having that conversation.
I’ve talked to some of my fellow fundraisers and one thing we have agreed on is that there was a considerable increase in email solicitation (and new senders) in our inboxes this year from various organizations compared to years past.
Due to this, another hypothesis I’ve mulled on is, digital fundraising is no longer a secret–or nonprofit organizations have found or invested in the resources to reach donors and potential donors through digital channels.
This would suggest that digital giving (revenue) across all organizations has increased or stayed the same but is spread out among more organizations, with individual organizations seeing an undesirable decrease or flatness in revenue and overall response. On the flip side, this could lead into a reason why some organizations saw growth in 2018… because they were tapping into resources they hadn’t yet used at all or successfully in the past.
The next step in determining this a factor is looking out for those benchmark numbers and evaluate giving trends–specifically the number of nonprofits shifting to digital fundraising, the number of email sends, list growth, deliverability, etc.
We look at deliverability pretty regularly and for the most part it was on par with the rest of the year. Anecdotally nearly all of our regional clients did fine and were up year over year in December. National clients were flat or down. I have a hypothesis brewing that when the proverbial sh** hits the fan, people turn to local causes where they feel like they can have a direct impact. Time (and data) will tell.
Karin, that’s an insightful and solid hypothesis. The trend with regional organizations generally faring better than national groups is something we saw too. As you say, time and data will tell. Thanks for sharing that.
[…] The fundraising industry is reporting that a lot of organizations saw decreases at the end of the year. “Overall the shortfall may be as much as 25% for some organizations” said The Agitator. […]