The past 22 months have turned our snow globe of a world upside down. Just as the pieces were starting to settle, the “Hand of Fate” gave us another shake. But, new fundraising trends are taking shape beyond the blizzard of the here and now. Four senior development officers at large, leading nonprofits predict the changes coming during the next five years and share what they’re doing to prepare.

Donor Behavior and Expectations

“The biggest change I foresee is engagement with different generations based on their preferences,” according to Kara Ramirez Mullins, chief advancement officer with the National Geographic Society. “While traditional strategies will continue to prove effective, folding this next generation of philanthropists into our organization is critical.”

Gen Z’ers and Millennials are pushing fundraisers to figure out how to  meaningfully and authentically connect those audiences to their missions. Mullins explained that at National Geographic Society, “this spans from unique programming and donor travel to personalized events and even our organizational presence on social media. We must ensure interactivity and relevancy across all programs and platforms.”

Similarly, Linda Roth Platt, chief development officer with Compassion & Choices, predicts that this donor desire for direct connection will move supporters to giving directly to individuals and away from giving to nonprofits. “There are signs that the overall number of donors giving to nonprofits rose during COVID. However, I believe this is a short-term increase and a decline will continue over the next five years. People will continue to give directly to individuals and through channels like GoFundMe where the donation is given to a person or specific situation like a neighbor’s house being burned down,” she predicts. “In our messaging, we focus on the impact our programs have on individuals and that impact being told by individuals.” Compassion & Choices is committing to an expansive stewardship program and adjusting acquisition program strategies “to drive the maximum number of donors onto our file rather than focusing on raising the average gift amount.”

Mullins added, “For effective direct marketing, as well as any donor correspondence, the philosophy is ‘show me you know me.’” She emphasized that data integrity is key, especially as National Geographic Society is expanding data collection efforts.

Postal System and Supply Chain:

This past year has also forced nonprofit managers to look outside of their own ecosystems to the context in which they are working. Yes, COVID-19. And also, hello USPS (USPS? USPS? Are you there USPS?).

“Postage,” responded Rachel Earl, chief development officer with St. Labre Indian School, answered when asked of challenges. “If you’re a direct mail fundraiser, this is definitely on your list of challenges and concerns for the future.” She worries that fewer of her house donors will qualify for 1st class postage treatments, and the impact will be reduced response and retention rates. “We all know what happens when retention rates fall … fewer donors on your file and declining revenue.”

Brian Cowart, chief development and marketing officer at USO, agrees with Earl. “Unfortunately, I believe costs for direct mail will continue to significantly rise due to a combination of postage and materials pricing increases. This will make it increasingly difficult to garner incremental revenue from this channel without finding ways to garner greater return from your direct mail expense dollars.”

Now is the time to prepare. “Start testing NOW,” recommends Earl. “Really think outside of the box — things that haven’t been done before or done before in your organization.”

Channels and integration:

The large increases in postage rates of the past year are also accelerating diversification into other channels and greater cross-channel integration.

Mullins notes how increasingly important it is to capture email addresses and phone numbers. Earl adds, “Highlight and try creative ways to funnel more of your direct mail donors to online by using coordinated one-to-one text messaging or QR codes that offer something so engaging or interesting an offline donor can’t help but click.”

Similarly, she adds, “Aggressively market and educate your donors wherever you can about other giving vehicles that make a big difference now.  If you can convert a direct mail responsive donor to use a different giving vehicle that has a much higher average gift that moves them up the donor ladder, that’s a win.” She includes cryptocurrency, donor advised funds, IRA rollover distributions, stock transfers, and corporate matches among the alternative options.

“Start pushing alternative giving vehicles now in prominent places in your direct response campaigns; flag donors that use them so you can target and provide personalized, variable messaging to them going forward,” said Earl. “We have been including this language in the all-important P.S. on campaign letters, on reply devices, and email campaigns with great success. Don’t wait, start planning and testing now.”

St. Labre is implementing cryptocurrency processing in time for the year-end giving season. “In digital programs, you typically have a demographic you are targeting that looks similar to the quality of donors you already have,” explains Earl. “I believe the cryptocurrency user world opens up a whole new demographic … I don’t know that in five years virtual currency will be the currency of choice, but I feel fairly certain that’s the road we are on. This is a great time for nonprofits to get started accepting cryptocurrency because the competition is minimal. Organizations have a chance to get in on the ground floor, get proficient at it, and be the first option for crypto donors interested in supporting organizations in a specific sector.”

Mullins agrees with Earl. “As we look ahead, our giving vehicles must include what these donors use, moving beyond mail and even the website and text to include Apple Pay, Google Pay, and even cryptocurrency.”

Cowart is depending on technology and artificial intelligence (AI) to track individual behaviors. He points out, “Delivering content across direct response channels based on donor behavior is ramping up quickly. Data capture and analytics for tracking conversions for individuals based on the cadence and types of message content being delivered is also increasing.”

This impacts how an organization measures the impact of direct response marketing activities. “This more integrated marketing approach requires that we no longer measure return on investment (ROI) by specific channel, but by a more holistic view that looks at the returns garnered from combined investments and measures how different touchpoints impact overall returns.” The hope is that this will allow for improved performance and greater ROI for all direct response channels when viewed together rather than separately.

Mullins concludes, “We are taking an innovative and holistic approach to ensure that in five years, we have a strong portfolio of next-generation philanthropists who are deeply and, in their own preferred way, engaged.”

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Abby Graf is vice president of programs and community engagement at The Nonprofit Alliance in Washington, D.C. Her email is [email protected]