2023 TRENDS TO WATCH FOR IN FUNDRAISING
Here are some of the biggest philanthropy trends to watch out for in 2023, along with tips on how to leverage the trends to strengthen your fundraising strategies.
Cryptocurrency can be a difficult concept for nonprofit organizations to grasp. The product itself is volatile, the underlying technology is perplexing, and new cryptocurrencies are developed on a regular basis.
When crypto donations arrive, nonprofits must decide whether to sell right away, hold indefinitely, or diversify a portion of the donation. Each strategy has its own worth.
Here are a few ways nonprofits can accept cryptocurrency:
1. Use a Donor Advisory Fund (DAF)
The easiest way for a nonprofit to accept cryptocurrency is through a commercial donor advisory fund (DAF) sponsor which involves accepting the donation through another 501(c)(3) so that your nonprofit doesn’t have to take custody of the cryptocurrency or manage compliance. A larger community foundation is an example of a DAF provider that may accept crypto donations.
2. Outsource to a third-party payment processor
There are also payment processors that help nonprofits accept donations to their own wallet, allowing them to hold onto crypto as an investment if they wish. A wallet is a place where you can receive, send, and store crypto. For a service fee, companies like The Giving Block and Engiven handle transactional aspects like automatic conversion to cash and tax receipts. In the situation of using a payment processor, it will be important to note that the nonprofit will need to handle compliance with IRS regulations and use accounting best practices.
3. Use a Crypto Exchange
There is also the use of a crypto exchange which allows for an automatic conversion to cash for a minimal fee. However, the nonprofit will need to handle donor support, tax receipts, and collection of donor information. This approach is for organizations with an established donor base, a high potential for substantial crypto donations, and the staff capacity and expertise to manage the process internally.
To progress toward new ways of doing good, nonprofits must continue to balance the benefits and risks of cryptocurrencies. Read more about the basics of cryptocurrency here.
NEXT GENERATION GIVING
The next-generation, particularly millennials and Gen-Zers are reshaping the donor landscape and upending nonprofit organizational standards.
Both generations were told as children that they could make a difference in the world, and now that they are adults, they’re putting that belief into action. These generations regard their time, and their money as equals when it comes to supporting organizations they care about. Understanding the contrasts between what inspires baby boomers to serve — and how they like to engage — and millennials or Gen-Zers is critical.
Organizations that adopt a next generation-driven donor engagement strategy can expect a whole new level of participation as this generation brings their personal connections and passions to the causes they care about. Here are a few ways nonprofits can meet the expectations of a new generation:
Offer multiple ways to engage:
Donate- Younger donors should be offered a variety of donation options, including credit/debit cards as well as online payment mechanisms like PayPal, Zelle, or Venmo. Ensure your website is mobile-friendly with eye-catching page layouts in your brand colors.
Share-Give younger donors opportunities to participate in peer-to-peer fundraising on behalf of the organization via social media. They can share your mission with their friends and family, increasing your nonprofit donor base.
Volunteer- Volunteering time appeals to younger supporters with limited discretionary means, who are typically at the beginning of their careers. Offering opportunities to volunteer, whether it is an individual or group volunteer activity will lead to a long-lasting relationship.
Read more ways to attract younger donors here.
TECHNOLOGY FOR SOCIAL GOOD
Nonprofits face the unique difficulty of gathering information from a range of sources, including communities, employees, volunteers, and donors. At the same time, organizations have been held back by limited funds and data expertise.
Nonprofits have started taking advantage of the rise of data philanthropy, predictive analytics, and machine learning to measure impact and extend their reach, thanks to the availability of innovative technologies and new partnerships.
Using technology, nonprofits can capture every touch and build a powerful understanding of their constituencies, including their history, location, demographics, unique interests and more. Analytics can be used to uncover new relationships that can help to better understand giving trends.
Technology can also help to personalize the giving experience. Acknowledging the donor’s interests and communication preferences to tailor unique messages to them about donor impact and upcoming engagement opportunities helps develop a stronger relationship with the donor. Check out StratusLIVE's technology solutions for nonprofit organizations here.
INCREASED DONOR PRIVACY
In 2021, Apple launched its much talked about Mail Privacy Protection Policy. Before the policy, nonprofits could gather engagement data about their email campaigns by inserting hidden pixels into the email body. When emails are opened and these pixels are loaded, the email host can see that the email was opened, the device type that was used to open it, and the recipient's IP (Internet Protocol) address, which provides an estimated location usually limited to the recipient's city. Once Apple’s mail privacy protection policy took effect, email marketers could no longer track these data points and came up against a few other challenges.
Nonprofits are now having to track alternative email metrics to assess campaign results such as:
- Click rate- The amount of clicks you receive inside your email content as a percentage of the total number of emails sent and emails opened is referred to as the click rate.
- Unsubscribe rate- You may better understand how many contacts no longer wish to receive your communications by monitoring the unsubscribe rate, as well as see if there's a link between specific content categories and unsubscribes.
- Conversion Rate- The percentage of recipients who clicked on a link and completed your desired action, such as a contribution or CTA (call to action), is known as the conversion rate. It provides you with a broad overview of your campaign's performance.
Nonprofits are also adapting by cleaning out bounced or unsubscribed email addresses leaving them with an engaged audience, which makes end-of-year fundraising campaigns function much more smoothly.
Whether we like it or not, the world is changing quickly, and technological advancements will have an impact on philanthropy. It will almost certainly yield positive outcomes but will also provide difficulties. We should expect an acceleration of advances in this field as a new generation of tech entrepreneurs and companies become involved in philanthropy.