Digital Immaturity Damaging Fundraising Outlook

The 2021 outlook for nonprofits in the United Kingdom is considerably more optimistic than it was in 2020, with two-and-a-half times as many believing they will thrive in the upcoming year, according to The Status of UK Fundraising 2021 Benchmark Report, a new 43-page report from Blackbaud. But those most likely to see turnarounds are those that have embraced digital technology as part of their fundraising or operational activities.

To be sure, any optimism is welcome. In the 2020 study, only 24% of nonprofit professionals were confident their organizations would adapt and find new fundraising methods that would enable survival through the coronavirus pandemic. This year, that figure hit 60%.

This optimism comes amid concerning trends. Income levels have dropped during the past three years, with 40% of respondents reporting declines in 2021 alone. Only 21% met the year’s fundraising targets, a slip from 26% in 2020 and 25% in 2019. In comparison, 29% indicated they had not met their targets, an increase from 26% in 2020 and 25% in 2019.

A key difference between organizations that thrived and those that merely survived came from nonprofit professionals who agreed their organizations had a fair amount of digital expertise. Only 12% of organizations described themselves as digitally mature – having digital strategies that go well beyond fundraising, and in many cases incorporate activities from all operating units. They were more likely to gain supporters, grow income and be bullish on the future. 

More respondents characterized as “digital adopters” (39%) than any other category. These organizations track fundraising effectiveness through their digital operations, but may not have enterprise-wide technology solutions and have some trepidation about keeping up with the pace of technology change.

Respondents from the 35% of organizations that describe themselves as digital rookies do not place a high priority on digital transformation, and openly admit that keeping up with the pace of technology change is a challenge. The remainder, who are labeled digital “sceptics,” tend to be on the smaller side (more than two-thirds have annual income under $1.4 million, and nearly one in five have no paid employees). These were the most likely to have experienced income drops.

Overall, respondents rated the entire sector as a “five” on a scale of one to 10 for digital maturity.

The need to embrace digital fundraising was exacerbated during the pandemic, as analog fundraising and activities suffered. Nonprofits that relied on event and community giving activities for their fundraising were hit hard during the pandemic. Community giving levels dropped, according to 43% of respondents, and nearly two-thirds – 64% — indicated event fundraising contributions were less than they had been before the pandemic.

The pandemic spurred donations toward organizations with missions that aligned with relief efforts. Among the 35% respondents who said their nonprofits had seen income growth, 75% believed this was because of the pandemic. Nearly six in 10 (58%) also said their income grew because their overall donor numbers increased.

That said, significantly more respondents – 49% – had indicated their income increased in 2019. Overall, when respondents considered 2020, just over one third (36%) said they were gaining more donors than they were losing.

The survey was conducted in June 2021, and results are based on completed surveys from more than 1,000 nonprofit professionals. The survey data was augmented with a series of in-person interviews.