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Seeing the Forest for the Trees: Trends that Are Shaping Philanthropy Today

Friday, July 15, 2016   (0 Comments)
By Avrum Lapin, President of The Lapin Group, LLC

Many of us involved in the “day-to-day” of fundraising are acutely aware of and attuned to the latest reporting on philanthropic giving and trends in the marketplace. However, we rarely peek behind the curtain and assess what cultural, demographic and economic shifts are responsible for causing or affecting trends in the first place.    

One good example of this is the Giving USA 2015 Report, which shows that overall online giving is up. According to the research conducted by Giving USA, online contributions grew to represent 19% of all giving, compared to 12% in 2014. This cannot be explained only by more adults using cell phones and mobile tablets. According to The Pew Research Center, nearly two-thirds of American adults (64%) now own a smartphone of some kind, up from 58% in early 2014. A quick glance at the data might explain the rise in online giving. However, new smartphone users in 2015 tended to be younger and actually less affluent. In fact, 23% of smartphone owners have had to cancel or suspend their service in the past due to financial constraints. This second look at the data reminds us that we need to dig deeper to truly understand the driving forces behind these shifts.

The philanthropic marketplace is evolving in response to both natural shifts in demographics as well as by economic developments and technological advancements. Natural changes by their definition happen slowly, over the course of many years. Often, we are living and breathing those changes and do not stop to understand the implications of these natural progressions. Within the context of philanthropy, for example, the rise of both women and Generation Xers, together with rapid advancements in technology, has impacted both the internal operating methodologies of nonprofits, reflecting the needs and expectations of donors. These new volunteer and professional leaders have changed the way that both nonprofits and donors operate, communicate, create connections and relationships, and demonstrate effectiveness.

In addition to demographic shifts, the charitable environment today is much more dense and hyper-competitive due to the steep increase in the number of nonprofits vying for donor support. There were more registered nonprofits in 2015 than in prior years. This, coupled with increasingly sophisticated technology and availability of data have forced nonprofits to tell their stories in a more compelling and data-driven manner. Online applications require statistics that marry mission to results and impact. Donors have abandoned brand loyalty and are looking beyond traditional giving and opting to support those nonprofits that can demonstrate that their gift will demonstrate results and be an investment in the future.

These shifts have greatly impacted fundraising and communication methods. Therefore, strategies must shift to accommodate newer approaches that will not only speak to new demographics but also keep organizations fresh and modern. However, building and nurturing relationships and individual “asks” are still essential for any organization. According to the most recent Giving USA, "Emerging fundraising methods such as giving days, fundraising challenges, and crowdfunding can provide a gateway for new donors to engage with an organization." The rise of strategies designed to engage donors in investment and generation of results and impact will ultimately lead to increased revenue and increased donor retention. It is not simply enough to create a mobile giving presence, one must understand who it is targeted to and what message will say to this emerging audience.

Understanding these many forces at work will help organizations be proactive and respond appropriately to current trends and better serving their audience, whether they are foundations, philanthropists or other key stakeholders. The Lapin Group, LLC has interviewed leaders in the nonprofit world, including funders, donors and leaders of nonprofits to get a better handle on the elements behind the changes. View the findings, the opinions of these thought leaders, and The Lapin Group’s analysis.

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