Educational fundraisers have recovered some of their confidence since December, but expectations of meeting fundraising goals is still running thin, according to the latest survey by fundraising consulting firm Washburn & McGoldrick. The survey of the firm’s clients polled 348 frontline fundraisers and senior development staff from 121 colleges and independent schools.
Seventy-eight percent of senior development staff expressed confidence that their institution would meet its fundraising goals — 10 percentage points more than said so in December 2022. But that’s still well below November 2021’s 91 percent confidence rate. Frontline fundraisers have shown more muted confidence levels since Washburn & McGoldrick began regularly surveying its clients in April 2020. Sixty-six percent of frontline fundraisers said they expected their institution to meet its goals, the lowest it has been since January 2021.
Asked whether they’ve noticed an increase in donors’ concerns about the economy during gift discussions, 69 percent of senior fundraisers said they had. Frontline fundraisers were not asked this question.
But there’s more to the story than just the economy, including a snap-back in giving behavior now that the public-health emergency has ended. In 2020 and 2021, donors channeled their philanthropy into giving immediate dollars to institutions, says Karin George, managing principal at Washburn & McGoldrick. Those contributions to financial aid, emergency funds, and annual funds helped colleges support their students during an uncertain time. Now, however, donors aren’t motivated to contribute to those funds, George says. Far more popular are program-specific contributions, especially ones included in capital campaigns.
“There were a good number of our clients who had big gaps to make up in their annual donors and their annual fund dollars, but were going to report on-goal or record overall results,” George says.
Small donors are holding back, too, and that’s partly a messaging problem on fundraisers’ end, George says. Multimillion- and multibillion-dollar donors are charting a new course in philanthropy, winning praise and capturing headlines for their transformational gifts. In 2022, for example, just six individuals and couples gave $13.96 billion to charity — contributing 3 percent of all giving from individuals, corporations, and foundations combined.
“People are excited about that kind of philanthropy. If it goes to their organization, they become even prouder of their organization,” George says. “But it doesn’t necessarily inspire them to add their own dollars.”
Everyday donors — once the engine of annual-fund giving — now complain that their $100 gifts are meaningless compared with million- and billion-dollar gifts megadonors are contributing. When asked to make a small contribution, George hears these donors say, “It’s not going to matter.”
Mixed Fundraising Results
Fundraising results are a mixed bag, the survey found. Forty-nine percent of institutions in the survey say they grew their total private support from the 2022 to 2023 financial years. But nearly an equal share — 47 percent — say their institution’s total private support went down during that time. A striking 37 percent of respondents said their institution is planning for its total private support to decrease in the 2024 fiscal year.
Erin Hall, chief development officer of Hopeful Horizons, a South Carolina nonprofit that serves survivors of abuse, rates her confidence in reaching this year’s fundraising goals a 3.5 out of 5. Hall, who did not participate in the survey and is not a Washburn & McGoldrick client, says that rating is due to her own natural skepticism, as well as the poor showing Hopeful Horizons received at its April gala. Prior to the pandemic, the group raised about $170,000 through the annual in-person event. This year it raised roughly $90,000 — even with what it raised at its 2022 gala.
“We reduced the number of people at the event, but we weren’t expecting that much of a drop,” Hall says. “It’s hard to know what people want in an event these days.”
Hopeful Horizon’s total fundraising revenue is down from this time last year, Hall says, but she expects the nonprofit will come out even by the end of the calendar year. The bulk of the organization’s year-end donations come by mail — most of its donors are age 65 or older — and Hall is already hard at work on her mailed appeal. She hasn’t noticed donors voicing more concerns about the economy during gift conversations, but she says fears of an economic downturn could be scaring away new donors and midlevel donors.
“Now, in 2023, there is another level of unpredictability that’s different from the unpredictability of 2020,” Hall says. “It’s just so hard to know what folks are thinking.”
Another challenge, Hall says, is donors’ fuller return this year to pre-pandemic activities like overseas travel. These trips prohibited some Hopeful Horizons donors from attending the annual gala. Also, the pandemic’s subsidence has taken the spotlight off nonprofit work — allowing donors with money to spare to think more about spending it, rather than giving to urgent charitable appeals.
Staffing Challenges Continue
More than half — 52 percent — of survey respondents named staffing shortages and resignations as the greatest challenge they expected to face in their office going forward, indicating that the fundraiser hiring crisis has not yet slowed. Burnout and uncertainty were other top concerns, with 42 percent of respondents citing them.
Uncompetitive salaries and requirements for in-person work have accelerated that crisis, George says. The survey found that 67 percent of respondents work a hybrid schedule, splitting their time between remote work and in-office work. And respondents made it clear they want at least some opportunity for remote work. Fifty-eight percent said they would likely search for a new job if their employer did not offer hybrid or remote work as an option.
“Schools are trying to be as competitive as possible in salary but can’t keep up necessarily,” George says. She adds that some institutions have had to skip raises, freeze hiring, and even pause pension contributions because of budget shortfalls.
Those lingering vacancies could cause institutions to leave money on the table, George says. As more potential alumni donors graduate each year and fundraising positions stay vacant, fewer fundraisers become responsible for building relationships with more donors. That’s a lot to ask, George says, noting the significant amount of preparation fundraisers do before just one donor meeting.
Fundraisers showed a little optimism that the situation would ease over the coming year. Asked to list the most substantial ways they expected their work to change in the 2024 financial year, staffing was the most popular answer. Twenty-seven percent of respondents said they anticipated a return to a fully staffed development department.
Hopeful Horizons, the nonprofit for abuse survivors, has so far avoided vacancies on its two-person development team. But staffing shortages have plagued the program staff, making fundraising and administration more complicated for the whole nonprofit. “As soon as you say you’re fully staffed, then somebody leaves,” Hall says. “That’s been really challenging.”
The staffing shortage has limited the organization’s ability to serve clients, leading to occasional waiting lists for services. Vacancies also affect budgeting: How do you price out a program if you don’t know how many salaries you’ll be paying? “We’ve raised money for the positions, but then you can’t fill them,” Hall says. “It is just so many puzzle pieces.”
To encourage staff to stay, Hopeful Horizon has raised salaries. Like other nonprofits, it’s also dealing with the increased costs of goods and services, thanks to inflation. That’s hard to explain to grant makers who have been giving the same amount for years, Hall says. “I love the consistency. It’s great that they feel like a partner. But $10,000 today does not cover as much as it did even five years ago,” she says. “In essence, you’re losing money.”
It’s important that fundraising leaders acknowledge the toll that staffing shortages have taken on their fundraisers, George says. And while their teams are busier than ever, she encourages leaders to make time to celebrate the work they’ve accomplished. “Take a breath and acknowledge just how tough it’s been for people,” George advises leaders. She also encourages frontline fundraisers to remember that their team leaders are also feeling the squeeze from their own bosses.
“Be realistic about what you’re able to do,” George says, “but do celebrate the fact that you made a difference and the work that you did resulted in change, in stability, in opportunity for your organization.”