4-Tips to Modernize Giving in 2023

Will 2023 Prove to Be a New Era in Fundraising?

Quick, get out your crystal ball! Economic expectations for 2023 have been dismal. The International Monetary Fund predicts "the worst is yet to come." The World Trade Organization stated, "the picture for 2023 has darkened." And to top it off, 86% of CEOs foresee a recession over the next 12 months. OUCH!

Not to worry, this news doesn't have to be as bleak as it sounds. Instead, it should motivate us to get creative, to convert our thought leadership and processes from a traditional out-of-the-(four-sided)-box to a new box with seven or eight sides. We need to get to know our donors, their desires, and their ability to give on a deeper, more meaningful level than ever before.

The aftermath of the pandemic, the war in Ukraine, fluctuating stock market, the sky-high cost of living, and an ever-increasing demand for services have resulted in a higher cost of giving. Forward-thinking nonprofits, schools, and religious organizations are rethinking and retooling their strategies to mitigate these expenses and potential funding shortfalls.

According to Research USA, individual giving was up slightly in 2021 over 2020, but when adjusted for inflation, remained flat at $326.87 billion, while foundation giving increased by 3.4% at $90.88 billion. Will these numbers predict the future? Probably not, but can they inform strategic choices in the short term? Absolutely.
Live Gala-Style Events (LGSE) are BACK!

If we pay attention to who our donors are, how they prefer to give, and why they connect with our mission, we can rethink our revenue streams and have a real opportunity to end 2023 with banner growth, a higher satisfaction rate, and a more diverse donor base.

Live Gala-Style Events (LGSE) came back in a big way in 2022, and 85% of nonprofits who hosted live events before 2020 say that they'll be scheduling an LGSE in 2023, which is fantastic, but what else is possible?

At LGSEs, only 5% of the audience is ready and able to invest several thousand dollars on live auction items or gifts at the paddle raise. 40% will not usually bid on live auction items or support at appeal, leaving 55% that actively bid on live auction items but are frequently outbid by the 5%ers, although they do give during the paddle raise, but usually at levels under $1,000.

This 5%, 40%, 55% Rule* correlates directly to the donor demographics reported by Research USA, stating that 5% of the wealthiest donors have the most significant financial impact.

Alternatively, could you engage the other 95% of your audience (outside of LGSEs) to give at a lower level today and even stretch their donations to a higher level over time, and would this makeup for any downfall in giving at the top levels? Only you have the answer.

4-Tips to Modernize Giving

Tip One: Monthly and Recurring Giving
This tactic has been around for years, a button may sit on a website, or you may mention it in a year-end giving letter. The truth is, for most organizations, it's rarely a focused strategy.

In today's inflationary environment, a Monthly Giving Program will help donors budget their commitments over time and can be very successful when combined with a paddle raise at an LGSE, a text-to-give campaign, a walk or run, or at smaller mid-year events.

Tip Two: Live Public Events
This plan requires a little more planning and takes a "who you know" approach. However, if you connect and collaborate with musicians, sports teams, festivals, community events, or large association gatherings on a live giving segment, you can create chain-reaction giving.

Compared to Gala Style Fundraising, Public Event Fundraising (PEF) exposes your mission to a much larger audience through live endorsements with your collaborators. In this scenario, you're asking for smaller gifts under $150, but because your audience is so much larger, PEF typically results in record-breaking fundraising.

Tip Three: Digital Wallet
Most GSFEs use an online fundraising software program for registration, online, silent, live auction promotion, and checkout, which works seamlessly.
For immediate contributions with text-to-give campaigns or in larger audiences, digital wallets offering a 2-click give-through using apps like Apple Pay, Google Pay, Zelle, Venmo, and Paypal is an emerging tactic proving quite successful.
The real PRO to this strategy is that the donation is immediate (depending on your provider), and any donation made is an automatic "opt-in" from the sending phone number, so you can continue to build your text database for further marketing and development efforts.

Tip Four: Is the Metaverse an Option Yet?
Many still need clarification about the Metaverse, what it can do in fundraising, and if it's ready for general consumption. Here's a bit of background:
The term Metaverse was first introduced in society by Author Neal Stephenson in 1992 in the Sci-Fi Novel Snow Crash, where the main character Hiro, the Protagonist, a katana-wielding hacker, jumps back and forth between dystopian Los Angeles and a virtual world called the Metaverse. . . . Get the book, it's a good read.
I had a conversation with a good friend, Quinn Buchanan, founder of eMersive Systems, a serious games, and VR simulations company, and he described the Metaverse as a "loose collection of different technologies that may or may not work well together."

He said that "these technologies run the gamut from Virtual Reality to crypto to emerging standards for web3, and the accessibility, ease of use, and size of your potential audience can vary wildly based on which parts of the Metaverse technology you intend to use.'

'Virtual Reality is arguably the most stable and mature of these technologies and the one with the highest levels of adoption, but the market is small. New devices such as PlayStation VR2 and the rumored Apple VR Headsets will continue to expand the marketplace, but it will still be a while before we see mainstream adoption of its use."

In the bigger picture, what excites me most is that the Metaverse can augment what we learned about virtual and hybrid events in 2020 and 2021 and upgrade the experience to be truly interactive. It can include groups of guests who cannot attend live events due to health and physical limitations and those who are generally not part of formal LGSEs. It's exciting, even in its infancy. Stay tuned for more as we dive into the new universe.

So, What's Next?
Please join me in jumping on our proverbial surfboards as we prepare for the wave of change coming in 2023. If we stay open to what's possible, add emerging options to our fundraising toolkits and keep doing good work, we can survive another year and grow and thrive in this new era of fundraising.

*The Auction Divas conducted the 5%, 40%, 55% Rule Research Project in 2016