As Inflation Soars, Donors Reign in Spending. How Do We Inspire Them To Continue Giving?
Inflation continues to be a growing and pressing concern for most households, who now find it more difficult to purchase basic necessities. What does this mean for donor behavior and fundraising into the new year?
As nonprofit leaders make their calendar-year-end pushes and look to start strong in the new year, they are very aware that this year’s LYBUNT and SYBUNT donors may lapse, and attracting new donors may be more difficult than in other years. Inflation has touched so many around the world, and here in the US, the ability to purchase basic necessities is the top impact on the average household.
As a result, the economic pressures created by inflation are changing how people, spend, invest, and donate their money. In fact, when spending money online, a recent survey found that 90% of people are more interested than ever to find and use discounts or flexible payment options, due to the rising cost of everything.
Regardless of the economic environment, donors will continue to give. But in challenging financial times, they will modify their giving habits, which have already dropped 16% in the last decade, with less than half of all US households now contributing to charitable giving. Nonprofits that do not adopt new incentives and solutions to inspire giving will be at a disadvantage in their calendar year-end push, the new year, and the Giving Day season.
This reality begs two questions:
How do I get donors comfortable with giving during economically difficult times?
How do I explain new donor behavior to my board?
In the first post in this series, we'll examine the first of those questions.
5 Ways to Help Donors Give During Inflation
1. Show Impact
The more that people need to think about every expenditure, the more proof they need before spending a dollar. As a fundraiser and nonprofit leader, you have an advantage, because of the amazing work you do in your community. Sharing these impact stories, showing the faces of those who you help, and personally explaining why you also give to your organization are powerful drivers that help satisfy a donor’s need to understand their dollars are valuable.
Yearly’s digital report platform allows nonprofits to create their own reports showcasing the impact made on your community. Also, if you are conducting a specific campaign and can tell the donor precisely how you plan to spend their gift, that’s an appeal that anyone can get behind!
2. Give Now Pay Later
Fidelity Charitable reports that, by far, personal financial reasons prevent people from giving and prevent donors from giving more. Taking that a step further, if donors realize they may not be able to afford a large enough gift, they start to question if they can move the needle for your cause, at all.
Givzey’s Give Now Pay Later (GNPL) flexible giving solution empowers your donors to clear these hurdles and pays your nonprofit the donation in full and upfront. GNPL rewards donors by splitting their gifts into four installments in the form of philanthropic advances, lessening the immediate financial burden of giving – without any credit checks, hard or soft. Meanwhile, nonprofits receive immediate access to capital, assume no risk to chase down pledges, see increased giving donors, and have zero tech lift from a donor’s journey.
In a time when 53% of donors report leaving giving pages without making a gift, GNPL is a distinct advantage that inspires donors to give now.
3. Segment Your Annual Givers
As the saying goes, there are a million ways to segment your donor base. One of the ways we might do that is to consider donors in a particular giving society as one segment. But what about those donors that sit one or two steps away from a giving society? Could you make an appeal to these donor segments and suggest joining an aspirational giving society that they have yet to reach? When combined with GNPL to ease the financial burden of giving, this approach can be the spark that welcomes a new donor into one of your giving societies.
4. Expanding Your Mission
During the initial wave of the pandemic, we saw many donors redirect their generosity to nonprofit organizations working on the frontlines – securing PPE, feeding the hungry, and supporting medical professionals. It wasn’t long before nonprofits of all kinds began talking to their donors about the amazing ways they were also helping with these types of initiatives, even if it was not what they were known for. For example, many colleges and universities found ways to house students or transport them home safely. Faith-based organizations ran food drives. Community organizations set up vaccination sites.
Does your organization have programs that connect to hunger, homelessness, or disaster relief in any way? These are areas that will be hit hard by inflation and where donors will want to direct their generosity.
Good stewardship is the backbone of fundraising and it’s a fundamental that should not be lost, especially during difficult economic times. Be sure that your donors don’t only hear from you and your organization when you’re asking for money. Remind them of the impact of their generosity with regularity. Show them the progress you are making on your mission. Share news and articles that relate back to the change you seek to make. And, whenever possible, prove to them that their dollars directly led to impact.
By meeting donors where they are during uncertain economic times and offering incentives that lessen their financial burden on giving, such as Give Now Pay Later and how your mission connects to immediate needs in your community, nonprofits can successfully inspire donors during times of inflation, recession, or otherwise.
Organizations that choose to wait and see or stick only to fundraising strategies that worked in the past will be the first to lose donors due to inflation and economic constraints. Be on the winning side of the times and shift fundraising strategy to accommodate changing donor behaviors.