Fundraising Reality Check: 5 Things You Need to Know

A number of myths continue to persist in the fundraising world. While I can’t debunk all of them here, I can deliver a reality check for five important items that I’ve encountered recently when talking with fellow fundraising professionals:

Myth 1: Most People Do Not Own Stocks

Reality Check: The fact is that a majority of Americans own stocks in one form or another. Gallup found that 55 percent of Americans have stock market investments. The greater one’s income, the more likely they are to own stock.

While the stock markets remain volatile, they continue to set new records. In other words, many charity donors own appreciated securities. Under the current federal tax code, anyone can benefit by contributing appreciated stock to a nonprofit organization. That’s because donors of appreciated stocks can avoid paying capital gains tax even if they are non-itemizers who take the standard deduction.

If you’re not asking your prospects and donors to donate appreciated securities, you’re not serving them well and you’re missing out on donations that could be quite significant. So, be sure to let people know that your organization accepts stock gifts, what the benefit is to donors of contributing stocks, and how they can gift stocks.

Myth 2: Giving Tuesday Will Help You Raise Tons of Money

Reality Check: I’m not opposed to #GivingTuesday. My problem with it is that many charities invest an amount of staff and budget resources that will never be justified by the return. In 2018, US charities raised $380 million, reports the Nonprofit Source. For perspective, that’s just 0.089 percent of overall philanthropy for the year. Furthermore, while 63 percent of Giving Tuesday donors give only on Giving Tuesday, we really don’t know if that’s a correlation or a causality; many of those donors might have given anyway on another day.

If you’re going to implement a Giving Tuesday appeal, do it the right way:

  • Have realistic expectations and invest resources accordingly.
  • Remember that a date on the calendar is not a case for support. Don’t ask people to give to your organization just because it’s Giving Tuesday. Let them know what problem their gift will address.
  • Have a thank-you and stewardship plan in place if you want to retain and eventually upgrade Giving Tuesday donors.

Myth 3: Charities Can Ignore Donor-Advised Funds

Reality Check: Okay, charities can ignore Donor-Advised Funds. However, they should not. DAFs accounted for 12.7 percent of overall philanthropy in 2018 compared with just 4.4 percent in 2010, according to The National Philanthropic Trust’s The 2019 DAF Report. In other words, DAF grant payouts totaled $23.42 billion. Total DAF charitable assets were $121.42 billion and climbing. The number of DAF accounts in 2018 was 728.563, a 55.2 percent increase over 2017.

The simple fact is that DAFs continue to grow in significance year after year. More and more donors are creating DAFs. You need to make it easy for people to recommend grants to your charity. You need to properly steward DAF donors and those who recommend DAF grants. You need to keep track of which of your supporters has established a DAF. You need to remind people that, if they have a DAF, they can recommend your charity for a grant.

Myth 4: Baby Boomers Do Not Use Social Media

Reality Check: In the US, there are over 80 million Baby Boomers/Seniors, defined as those over the age of 45. I’m one of them. Guess what? We use social media. On average, we spend more time online than we do watching television, according to a study by Google. The report reveals that 82 percent of Boomers/Seniors who use the Internet have at least one social media account, with an average of 4.6 social media accounts. Facebook, Twitter, and LinkedIn are the leading platforms used. Over half of Boomers/Seniors watch videos online with YouTube being the preferred platform for 82 percent of video watchers.

The world is changing and Boomers/Seniors are adapting. We’re using technology. That means charities can, and should, engage this population on social media. Nonprofits can create awareness for their cause as well as make appeals online. Among Boomers/Seniors, 26 percent have supported a cause via a social network.

When developing your organization’s social media strategy, don’t ignore Boomers/Seniors. Make sure you’re where they are. Just be certain you use social media to engage as well as make appeals.

Myth 5: Email Fundraising is Dead

Reality Check: “While online revenue grew by one percent in 2018, email revenue decreased by eight percent – though email still accounted for 13 percent of all online giving,” according to a study by M+R Benchmarks.  For every 1,000 email appeals sent, charities raised an average of $45. While open rates, response rates, and revenue are down, email remains a valuable fundraising tool.

Just as phone and direct mail fundraising have become more challenging, so has email. Yet, all three remain valid avenues when seeking support. However, fundraisers need to know that prospective donors are receiving more email appeals than ever. That means that appeals have to be carefully crafted from subject line to content to landing page. Nonprofits that do it right will continue to secure donations via email.

There are many more myths I could address. However, for now, I’ll turn it over to you. What are some of your favorite fundraising myths?

To read about planned giving myths that have been debunked, read:

That’s what Michael Rosen says… What do you say?

4 Comments to “Fundraising Reality Check: 5 Things You Need to Know”

  1. The only other myth I’d love to add is this one: Direct mail is dead.
    It’s not, still a work horse, still on average (depending upon your organization) a cost to raise a dollar of $0.20.
    In combination with a solid email plan and social media, you’re hitting on all cylinders but just remember this: 99.9% of donors have a mailing address, but not everybody can be reached by email, social media so start with the mail first.

    • Erica, ad always, I thank you for your insights. Once again, you’re on target. While bad direct mail is dead (though it still needs to be buried), well-executed direct mail remains an essential fundraising tool.

  2. I totally don’t agree with “Email Fundraising is Dead”. Email fundraising is still effective.

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