Why Philanthropy Is Flat and Maybe in Decline
Nonprofit organizations in the United States are now being challenged by major political, demographic, economic, and technological factors outside of their control, and most organizations find themselves flat-footed, unable to easily adapt. As the sector grapples with data that indicates giving was largely flat in 2018, Network for Good is releasing its first whitepaper of the year, offering a new point of view, along with new data, which suggests that today’s technology, applied differently, can begin to overcome our sector’s stagnant philanthropic growth.
In January 2019, Network for Good completed a three-year analysis of the fundraising activities for 2,000 nonprofit organizations, studying the relationship between gift size, retention rate, and number of channels used to deliver content leading up to, and throughout, year-end giving campaigns launched in 2016 through 2018. The study revealed a strong relationship between donor retention and consistent multi-channel engagement. The average gift size, total fundraising yield, and donor retention rate almost doubled for fundraisers who used a combination of email, direct mail, text messages, and Facebook to engage, cultivate, solicit, acknowledge, and retain donors.
To better understand these bright spots in an otherwise flat giving environment, the study also deconstructs publicly available data, outlining the strategies, tactics, and channels used by Netflix to sustain a year-over-year new customer retention rate of 91 percent. What makes that number even more exciting for nonprofits whose donor retention rate is more like 43 percent: what Netflix does can generally be replicated by nonprofits.
The study, which can be found on Network for Good’s website, was released on Friday, March 15 in conjunction with a special presentation by Network for Good at The Nonprofit Technology Conference in Portland, Oregon. Additionally, the study’s key findings will be presented at the Bill & Melinda Gates Foundation Greater Giving Summit, and a series of live town hall meetings across the country.
