The good, the bad and the somewhat surprising…
From Lolly Colombo, Executive VP Client Services
On one gloriously beautiful SoCal morning, back in April of 2020, I was out feeding my chickens their breakfast. I often take this time with the girls to clear my mind and prepare for the day… but seemingly overnight, nothing was the same as it had been the day before.
In the light of the unprecedented events we were living through, I had no idea how the pandemic would change our daily lives – or our fundraising strategies and successes, for that matter. It seemed like my chickens were the only ones around me who were unfazed by this global crisis.
In those first uncertain weeks, who could have predicted the challenges we would face, the unanticipated silver linings we would find and the way our lives would be framed two years later…
Though life post-COVID has had its ups and downs, we have all learned to “pivot” no matter what comes our way and stay positive in the light of our “new normal.” Similarly, the methodologies we use and the face of the fundraising landscape for nonprofits in the U.S. – and Rescue Missions in particular – has changed dramatically. We experienced a seismic shift in donor behavior that, in some aspects, is likely to be permanent.
BDI recently published our 2021 benchmark study, analyzing the giving trends of 42 Rescue Missions over the last five years. The data brings greater clarity to these unprecedented years in charitable giving we’ve all experienced. So let’s look at the big shifts in fundraising in 2021… and 4 nonprofit fundraising trends in post-pandemic giving we now see on the horizon that you should be watching in 2022.
A Look Back at 2021: Retention, Revenue and Recurring Donors
- Continued online adoption and growth in online giving
In 2021, online revenue increased an average of 10% among the BDI benchmark Rescue Missions. This is on top of the staggering 96% YOY growth seen in 2020. The pandemic accelerated the adoption of digital giving as a preferred channel, establishing a new baseline.
This can be observed by looking at the percent of total revenue that is given online. In the chart below, we see online revenue contributed 8-9% of total giving for several years. Then in 2020, this figure jumped from 9% to 13% and remained at 13% in 2021.
Online Giving as Percent of Total Giving
- Revenue up, but number of donors down
Rescue Mission donors continued to show extraordinary generosity throughout 2021. Total revenue was up 8.8%, which outpaced the 2.7% growth reported in the 2021 AFP Fundraising Effectiveness Project. (This study includes nearly 9,700 organizations.)
While total revenue was up, active donor file size decreased 6.8% compared to 5.7% decline in number of active donors shown in the AFP report. We see fewer donors giving higher average gifts and with increased frequency.
- Overall retention rate returned to pre-pandemic norm
Retention rate declined from a historic high of 71% in 2020 to 63% in 2021, which is the normal level we observe for BDI Rescue Missions. However, when you take a closer look at retention rates by donor segment, there’s much to be encouraged by.
As we know, a huge influx of new and reactivated donors came on in 2020. The good news is these donors are retaining better than average. In addition, multi-year donors (those who gave in 2020 and in 2021) had a retention rate of 78%, which is also better than 2019. The combination of significant new donor growth coupled with high retention rates resulted in 16% increase in donor file size since 2019.
- More recurring monthly giving
In 2020, there was a 58% increase in the number of recurring online donors among Rescue Mission clients in BDI’s digital program. This amazing growth trend in online donors continued in 2021 with an additional 21% increase!
According to the 2021 M & R benchmarks study, recurring donors contributed 18% of all online revenue in 2021. For BDI clients, this number was 13%. As digital adoption continues and more people are accustomed to cashless, automatic payment methods, recurring monthly giving will become an increasingly important strategy for every organization.
Now that we’ve unpacked our analysis of charitable giving in 2021, let’s take a look at 4 nonprofit fundraising trends you should watch in 2022. Keep reading to see how you can leverage these trends to boost your organization’s fundraising!
4 Nonprofit Fundraising Trends to Watch in 2022
- QR codes are here to stay
Thanks to health and hygiene measures put in place at restaurants since 2020, everyone knows how to use their phone to scan a QR code. But today, QR codes are for more than looking at the restaurant menu. They’ve become a regular element across marketing channels, from out-of-home to TV spots (anyone see that Super Bowl commercial?) to print.
Take Action: Get on the bandwagon by adding a QR code to your direct mail appeals. This gives donors an easy way to donate online and, if tracking is set up, can provide a more complete view of gift attribution to that appeal.
There are so many fun and creative ways to use QR codes to engage donors:
- Video: Scan the code to watch a video showing one of the many transformation stories at your Mission.
- Music: Link to a special Spotify playlist of your guests’ favorite worship songs.
- Wish Lists: Scan the code to access the Mission’s Amazon Wish List… and more!
- Texting to reach donors
Last year, this trend appeared more often, eventually becoming the norm. A growing number of donors have become comfortable receiving texts from organizations, and in fact are more responsive to text than email. Text messages have an average open rate of 98% vs. 20% for email.
Take Action: To build capacity in this channel, start by collecting mobile numbers during volunteer or donor registration and be sure to include terms of agreement where the donor can consent to receiving text messages.
- TikTok for Good
TikTok is most popular with the under-30 age group, so while it doesn’t target your best donor profile (whose average age is still 65), it’s a great way to generate awareness and engagement among Gen Z. TikTok has launched tiktok.com/forgood to help organizations grow their audience, activate supporters and raise awareness around specific causes.
Take Action: Launch a TikTok campaign asking users to create and share videos which highlight the needs of our homeless neighbors. For every video shared, a donation of $XX will be made to the Rescue Mission, up to $XX,XXX thanks to a generous matching gift.
- Attention turning to international causes
As the U.S. has settled into the “living with Covid” phase, donors’ attention is being drawn to the current crisis in Europe. In 2022, we anticipate a shift in giving from domestic organizations to international causes.
Take Action: As Missions compete for the donor’s share of wallet, utilize messaging that highlights the struggle more and more people are facing due to soaring inflation and food insecurity.
It’s been said that the “unprecedented times” of the pandemic brought about unprecedented giving. While BDI’s analysis certainly shows this to be true, we are now settling into a “new normal” of fundraising, including new strategies and never-before-seen results. BDI will continue to watch these 4 nonprofit fundraising trends closely – and others that emerge – to identify opportunities for nonprofits to release generosity in 2022.
And if you’re ever looking for a little clarity and inspiration to help you start your day, feel free to come join me and the chickens for a little backyard meditation!
Click here to read more “Strategic Insights” on our website.