Fundraisers heard a lot of bad news in 2023, but a spot check of year-end revenue hints that some groups — particularly those in the international aid sector — turned that trend around during the giving season. Even so, some fundraisers say they expect to face a difficult fundraising environment in 2024.
“The concern a year ago was: Shoot, has the bottom fallen out?” says Chris Maddocks, senior vice president at Blue State, a consulting firm that works with nonprofits.
That’s because, while some nonprofits posted impressive year-end results in 2022, many more saw fundraising revenue take a nosedive. In the aggregate, giving to nonprofits fell nearly 2 percent, before inflation, during the last three months of 2022, according to the Fundraising Effectiveness Project. And Giving USA found that individual donations plummeted 13.5 percent, after inflation, in 2022.
These gloomy indicators made Maddocks wonder whether the constrained fundraising revenue in 2022 was more than just a one-time blip. Would 2023 show that philanthropy was in the middle of a structural shift? Many gift processors and databases have not yet finished analyzing their year-end fundraising data, so it’s still hard to know whether the nonprofit sector as a whole dodged another dismal year-end.
Maddocks, for his part, says his worst fears didn’t come to pass at year-end. But that doesn’t mean the year was a fundraising triumph. Among Blue State’s nonprofit clients, median fundraising totals for December 2023 were just 1.4 percent higher, before inflation, than those of December 2022.
That mediocre aggregate result means some groups saw declines, while others yielded major success. In 2023, Blue State’s clients at international aid nonprofits boosted their December revenue between 20 percent and 117 percent, year-over-year. Doctors Without Borders, for example, saw annual fundraising revenue increase of about 10 percent, year-over-year. These and other results encouraged Maddocks to take a brighter view on the state of nonprofit fundraising today.
“The sector is resilient. Donors are there,” Maddocks says. “This is a place that we can grow from.”
There’s still much more to learn before we’ll have a clear sense of how willing donors are to keep giving right now. Even nonprofits that raised as much or more at year-end 2023 than they did the previous year say they’re likely facing a budget shortfall for the year. And some groups that raised more money during that period saw fewer donors contribute.
“Although we were up this quarter, we weren’t overall for the year and don’t anticipate we will remain up,” Karla Capers, director of digital marketing and supporter engagement at Oxfam America, wrote in an email to the Chronicle.
Fundraisers who eked out flat or increased giving at year-end say they were rewarded for sticking with best practices: crafting messages that connect with their donors and meeting them in mediums that they use, such as email marketing and advertising on search engines.
‘Focus On the Tried-and-True’
Emergency fundraising for humanitarian aid in response to the war in Gaza helped Oxfam America raise roughly 6 percent more online during October, November, and December than it did during those months in 2022. (The charity is still finalizing its fundraising totals and anticipates slight changes to this result in the coming weeks.) Compared with digital gifts earned at year-end in 2021, the increase was about 10 percent — indicating that the charity is inching closer to the level of giving it saw during the pandemic.
During the last months of 2023, the charity sent supporters more emails than usual about how their gifts enable Oxfam’s work.
“We probably had about as many fundraising asks as we did last year, but we did try to specifically diversify the mix of email content that we were sending so that we weren’t just asking people, ‘Give money, give money, give money, give money,’ but that we were really showing people the impact of the dollars that we’ve raised over the last year,” Capers says.
The charity also sent more emails with news updates from its colleagues in Gaza to help supporters understand the conditions there. These updates did not include a request for donations. It used that same format to highlight its work in other parts of the world, such as its response to the drought in East Africa. “I think that’s probably a strategy we will stick with,” Capers says.
If that seems like only a minor adjustment, it is. “We were so far behind budget and we were really nervous heading into end of year,” Capers says. “We were really like, Let’s just focus on the tried-and-true. Let’s do the best we can do on the things we know that work.”
That strategy paid off, boosting donations enough to meet online revenue goals at year-end. However, three months of successful online fundraising wasn’t enough to help Capers’s team meet its goals for the year.
The Colonial Williamsburg Foundation took a similar approach, relying on proven methods to fundraise, such as direct mail and in-person gatherings for donors who contribute $1,000 or more. It also launched a $600 million fundraising campaign in October, which helped grease the wheels for year-end giving.
The foundation set a new record last year, raising $103 million, largely thanks to past donors stepping up their contributions. Annual revenue increased about 27 percent over 2022 levels. That uptick is especially notable as it marked a return to pandemic-level giving after dollars raised in 2022 dropped to $81 million, down from $102 million in 2021.
Ahead of the end of 2023, fundraisers emailed supporters a video greeting from the foundation’s executives. The leaders shared news from Colonial Williamsburg and discussed the foundation’s work over the last year. It’s a tactic the organization previously used during the pandemic, and it will continue sending video messages this year, says Sani Silvennoinen, chief development officer for the Colonial Williamsburg Foundation.
Although donors stepped up their giving in 2023, their ranks are dwindling, something the organization attributes to age and economic pressures. The group says it’s working to improve its retention efforts. The foundation put off significant donor-acquisition efforts during the pandemic, but this year Silvennoinen hopes to net new donors through email marketing, social media, and other more affordable ways to get the foundation’s mission in front of potential donors.
“Our donor numbers are on a slightly declining trajectory, while the dollars are going up,” he says. “A big thing for ’24 is ... making sure that we continue to acquire new folks, while making sure that we retain existing ones.”
Digital Bright Spot
Nonprofits that placed advertisements with search engines were rewarded at the end of the year, says Maddocks, at Blue State. The firm recorded a year-over-year 38 percent increase, on average, in December revenue from paid search ads among its clients. Even those organizations that raised less overall online in 2023 still saw dollars raised through paid-search ads grow.
When a charity buys an advertising slot from a search engine, its website is pinned to the list of results any time someone searches for terms related to its name. In Google, for example, top results are labeled as “sponsored” when they’re the result of a paid search ad. Users who click these links to navigate to the charity’s donation page will have their gifts attributed to paid search ads.
Maddocks noted that both new donors and existing donors make contributions through paid search — a trend he’s still trying to explain. That means that even donors who received a fundraising email may have chosen to give later, by typing the group’s name into a search engine and donating through a paid search ad.
This kind of “channel switching” was especially pronounced at Oxfam America last year. Capers tracked the share of donors who opened a fundraising email but — rather than giving through its embedded link — donated through the Oxfam America website or a digital ad. One-quarter of online donors gave this way in 2023, compared with 11 percent in 2022.
“I would be surprised if other organizations didn’t see a similar increase in channel shifting,” Capers says. “That’s something, definitely, I want to keep an eye on.”
Looking Ahead
Even as some nonprofits record increased year-end revenue, many fundraisers are steeling themselves for a tough year competing against the drama of a presidential election.
“I would anticipate that giving will be down throughout all of calendar year ’24,” says Capers. Even so, she says it’s possible that there will be a post-election spike in giving to groups whose missions are affected by the election outcome, as happened with the so-called Trump Bump after the 2016 presidential election.
The conflict in Gaza inspired donations to international aid groups at the end of 2023, but this year’s presidential election may draw some donors away from global issues. “People in the U.S. are probably going to be more focused domestically,” says Deborah Garcia, chief development officer at Doctors Without Borders. “We have to think about how we keep the global needs relevant.”
This year, Garcia says her team will be focused on encouraging existing donors to continue giving and identifying and motivating new ones to contribute.