15 July, 2020

Benchmarking Fundraising Report 2020 – our predictions for the future of fundraising

Earlier this year, we released our Benchmarking Fundraising Report for 2020. This is Australia’s largest and most comprehensive benchmarking report for the fundraising sector. Kerren Morris, our Not-for-Profit Strategy Director breaks down some of the key findings and shares her top tips for the future of fundraising.

By Kerren Morris

1. Diversifying is more important than ever

Building and maintaining a diversified and balanced fundraising portfolio, and exploring a range of fundraising channels is essential for charities now more than ever.

To reduce the risk of relying too heavily on one method of income, your organisation should invest across a range of different gift types and channels.

Ideally, try to avoid having more than 30% of your revenue reliant on one gift type. The data gathered in our Benchmarking report shows us that as a sector, we have strong diversity in our options for income by gift type:

  • Bequest 19%
  • Regular giving 40%
  • High value giving 13%
  • Event giving 13%
  • Single giving 10%
  • Other 5%

When it comes to fundraising channels, we’ve noticed that some channels have had exponential growth over the past 10 years, only to level-off and then contract. We saw this occur with the dramatic reduction in revenue and acquisition through direct mail after a peak in 2015-2016. Right now, we are seeing the early signs of contraction in face-to-face fundraising.

It seems that as more and more charities jump on the bandwagon for a particular gift and channel combination, the less effective it eventually becomes because of over-saturation. The problem isn’t necessarily the channel, but the way it’s used. We recommend finding ways to innovate within your channels of choice and allowing time for the channels to succeed.

2. Short and long-game fundraising plan will be essential

Short-game fundraising is a relatively low-cost activity that brings in cash quickly to help organisations profit in the current year. This includes single giving, emergency giving, and peer-to-peer giving. With this approach, charities often prefer online execution as it provides speed to market and continuous optimisation.

Long-game fundraising, on the other hand, is what will sustain your organisation, even if situations arise which require you to stop investing. This is made up of regular giving, gifts in wills and high value giving from your established, loyal donor base. At a time like this, we recommend maintaining regular contact with your donors, expressing your gratitude for their support and nurturing these relationships.

This chart from our Benchmarking Fundraising report shows ‘long-game’ fundraising made up of Regular Giving (illustrated in light blue) and Bequest Giving (illustrated in purple), are both growing over time. While the short-game gift types remain fairly stable.

Charities might wish to aim for at least 60% of revenue from long-game fundraising when creating their fundraising strategies.

3. Leveraging Multi-Giving

This is the perfect opportunity to redefine your supporter journeys and contact strategies around insights, behaviours, and lifetime value goals.

Data gathered on donors in 2019 reflects large volumes in each single, regular and event giving. However, as the Venn Diagram below shows, there is incredibly low crossover by gift type. At the individual charity level, this is even more pronounced as this looks at overall giving across all organisations.

Charities need to move past ‘protecting’ one supporter group from approaches for other giving types, as this prevents your donors from exploring other ways to support your organisation. Challenge the norm – consider asking regular givers for an extra donation during Christmas, or single-givers over 65 for a regular gift, as you find new ways to engage and convert your supporters.

4. Invest in Digital

Digital fundraising is something fundraising leaders have been advocating for years. However, many fundraisers find it a challenge to invest in this space when they are presented with narrow boundaries for defining success – namely, short term ROI. On the other hand, charities that have persevered and are testing and learning in this space are really starting to see some strong results. All while growing their digital brand.

A good place to start is looking at what the leaders in the space are doing. How do they position fundraising on their website? How do they use social channels? What does their digital journey look like? Understand the behaviour of visitors to charity websites and use this understanding to inform your digital strategy. With people spending more time at home than ever before and relying on digital channels to stay informed and connected, working on your digital presence is vital.

5. Keep finding ways for new donor acquisition

Right now, many charities are pulling back on acquisition to focus on retaining existing donors. This is the opposite of a growth strategy. Donors attrite continuously, so if you’re acquiring at anything less than the replacement rate, your fundraising program is in decline.

The chart above shows acquisition volumes by gift type. Only single giving and event giving are showing growth in 2019 after 3 years of decline overall. Single giving uplift is due to the Bushfire crisis in October – December 2019. Event giving is due to 2-3 charities investing heavily in this space.

Don’t just tread the well-trodden path for donor acquisition. Absolutely focus on single giving with a strong conversion pipeline to regular giving. Use direct mail and letterbox drops to drive digital interactions. Focus on quality over quantity. While many charities were pulling back on DM acquisition, a whole new world of sophisticated targeting strategies emerged which reduces wastage and delivers return – even if your pack cost is higher due to reduced economies of scale.

6. Keep a ‘Futures’ Focus

That’s not a typo – futures plural. Because as we now know there’s no single future – there is a range of possibilities. Charities need to use the range of tools and advice available to develop scenarios that will allow you to survive and grow under a range of different potential futures.

And finally, Don’t. Stop. Fundraising…

Kerren Morris

NFP Strategy Director

Data-Driven Communications

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