The 2024 Fundraising Outlook Report: Strategic Reflection, Proactive Planning
Just released for the fourth year, The Fundraising Outlook report from OneCause continues to provide a pulse on the state of nonprofit fundraising.
The report, which is based on an annual survey of 939 fundraising professionals, highlights nonprofit fundraising performance and success, outlines major challenges, and defines priorities as organizations strategically allocate budget and resources for the future.
Check out some of the findings:
- Event and online fundraising revenue remain instrumental in helping nonprofits meet their goals, particularly smaller organizations.
- Nonprofits continue to prioritize in-person events and show increased confidence in format selection. Those employing mix of formats experienced the highest success rates.
- Fundraisers are grappling with challenges tied to sustainability and donor sentiment.
- Nonprofits are prioritizing donor acquisition and retention after a year of economic uncertainty.
- The nonprofit sector is cautiously navigating the realm of artificial intelligence (AI).
Event and Online Fundraising Revenue Remain Instrumental
After the massive digital transformation brought on by the pandemic, nonprofits continue to leverage online fundraising, with 96% of those surveyed reporting they held at least one online fundraiser in 2023. Strengthening online giving programs is paramount as a generation raised in the digital age advances in their careers and increases charitable contributions. Events once again has a strong showing, with 95% of nonprofits reported they held at least one in 2023.
Of the nonprofits surveyed, 57% reported generating 21% or more of their annual operating revenue (AOR) from their event and online fundraising efforts. Smaller organizations continue to rely heavily on these types of fundraising: 7 in 10 nonprofits with an AOR between $350,000 and $1 million said they raised 21% or more of their budget through event and online fundraising.When it comes to how organizations are performing against their 2023 event fundraising goals, 75% of organizations reported being in line with or raising more than their budget. Smaller organizations with AORs below $1 million performed almost identically to 2022, seeming to fare better than their larger counterparts.
A shift in performance occurred for medium and large organizations, with an increase in those reporting raising less than budgeted compared to 2022. Nonprofits with AORs between $1-5 million experienced a 6-point change from 17% to 23%, those with AORs between $5-10 million shifted 7 points from 7% to 14%, and organizations with AORs between $10-50 million saw a 5-point change from 11% to 16%. And among very large organizations, there was a notable 7-point decline in those indicating they were raising more than budgeted — from 36% to 29%.
Organizations who employed all in-person or a mix of in-person and hybrid events to appeal to wider audiences once again saw greater success rates than nonprofits who held all virtual events. For nonprofits who held all in-person or a mix of formats, approximately 8 in 10 reported they were in line with or raising more than their budgets, compared to 59% of those who held only virtual events. By type, in-person auction events and golf outings were the repeat strongest performers in 2023. There was, however, a 7-point decrease in the number of nonprofits describing golf outings as “very successful.”
Fundraisers Are Grappling with Challenges Tied to Sustainability and Donor Sentiment
After a year of economic uncertainty and a decline in annual individual giving (as reported in Giving USA), the top challenges impacting nonprofits in 2023 appear to be closely tied to sustainability and donor sentiment. Donor fatigue, engagement, and retention appear alongside recurring giving, year-over-year growth, and sponsors as top challenges.
A bright spot in the data was the 5-point decrease in the number of nonprofits citing staff turnover as a challenge, dropping from 60% to 55%.
Viewed at the revenue level and only focused on items nonprofits deemed “critical” or “definitely a concern,” it’s clear nonprofit are struggling to simultaneously grow their fundraising while mitigating the immediate economic impact of one-time gifts on donors through recurring giving programs. Nonprofits may be viewing sponsorship as more of a challenge this year as a result of turning to corporate partners in an effort to make up for the dip in individual giving.
Nonprofits Are Prioritizing Donor Acquisition and Retention after a Year of Economic Uncertainty
It seems many nonprofits continue to contend, whether unconsciously or not, with ripple effects from the pandemic when it comes to donor acquisition. Many nonprofits experienced rapid growth in new donor revenue that has substantially declined, reverting to pre-pandemic levels. The 2023 Giving Experience Study revealed that social giving numbers have also returned to pre-pandemic norms.
Macroeconomic trends are also affecting donor acquisition, with some donors pulling back on giving during persistent economic uncertainty. It’s encouraging to see that 94% of nonprofits reported they’re prioritizing increasing funds from existing campaigns, and that there’s also a willingness to explore new fundraising methods to adapt to this shift. Experimenting with formats like DIY, hybrid peer-to-peer events, and auctions with a virtual component can expand organizations’ reach and build a broader donor base.
One area of concern was a decrease in the percentage of organizations that identified donor retention as a “critical” priority, which saw a 6-point drop from 57% in last year’s report to 51%. Focusing on existing donors can reduce the need for costly, resource-intensive acquisition efforts, and retained donors tend to increase their giving over time.
The Nonprofit Sector Is Cautiously Navigating the Realm of Artificial Intelligence
Artificial intelligence (AI) is a hot topic across all industries right now, including nonprofit fundraising. With new tools seeming to pop up daily, it can be a confusing landscape for fundraisers to navigate.
A mere 15% of respondents indicated having a working knowledge of AI. Around half (46%) have some sense of basic terms and concepts related to AI, and the remaining 39% either have heard of AI but don’t really comprehend it or have very little, if any, working knowledge.
While nonprofits may be unsure how AI will affect them, it appears many are convinced it’s not a passing trend. Approximately one-third (31%) strongly disagreed or disagreed with the notion that AI is overhyped in the media.
Most surveyed nonprofits said they were uncertain if AI will negatively impact donor privacy (65%) and whether it will lead to increased government oversight in the sector (67%). A more optimistic outlook emerges when considering overall benefits for nonprofits. A combined 41% strongly agreed or agreed that AI would greatly benefit nonprofits, and a collective 36% strongly agreed or agreed that AI would directly impact their fundraising strategies. Overall, the data surrounding nonprofit sentiment on artificial intelligence underscores the need for a deeper exploration of AI’s role in fundraising to inform strategic decision-making.
Very few organizations reported using AI in their fundraising efforts, and the most common way nonprofits reported currently using AI was to assist with copywriting. And when it comes to barriers to implementing AI, 43% of nonprofits expressed uncertainty about having the necessary time or financial resources to undertake implementation.
As fundraising technology companies continue to incorporate artificial intelligence into their platforms in efforts to enhance fundraising, there will likely be shifts in these statistics as organizations navigate and embrace AI’s potential.
Here are a few tips to get you started as you plan for the months ahead:
- Benchmark your performance using the data within The 2024 Fundraising Outlook.
- Create an easy giving experience rich with donor options to encourage repeat gifts. Offering choices of one-time giving, recurring donations, and various payment options support donor preferences and makes giving easy.
- Explore how you can diversify your fundraising streams. Help mitigate external factors by exploring avenues such as incorporating new campaign types into your fundraising strategy, collaborative partnerships, sponsorships, and grant opportunities to create a more resilient financial foundation.
- Set aside time for exploration of emerging technologies. Consider incorporating dedicated time on your organization’s calendar for training sessions, workshops, or discussions to delve into potential applications of new technology, such as artificial intelligence.
- Strategize donor acquisition and retention. Strategically focus on cultivating donor relationships from the start. Tailoring approaches to resonate with supporters’ evolving preferences and employing technology to enhance donor experiences can significantly impact retention and long-term success. Use the 2023 Giving Experience as a companion to understand what donors are looking for in the giving experience.