The Great Wealth Transfer is Here But Fundraising is Down

Reminder: join us on January 10 for a webinar with special guest Dr. Russell James where we will be discussing how organizations can maximize current and future gifts of assets and increase investment in their planned giving programs. Register at www.tinyurl.com/weblegacy.

To get up on my soapbox a bit, I remain a bit perplexed at the lack of urgency by many US charities to build out real, funded strategies around legacy gifts, asset-based gifts, major gifts, etc. The philanthropic environment is changing rapidly but as an industry, we are making the same three big mistakes:

1. We keep running frantically after gifts of cash, believing that more urgent asks, more mailings, more emails, more A/B testing will reverse the pretty significant downward trend in fundraising.

2. We aren’t updating our marketing strategies to focus on current and future gifts of assets

3. We are trying to get donors to give as they have in the past, regardless of what their giving behavior is showing us!

The strategies that work (or maybe aren’t working so well) for raising immediate, small gifts of cash from income are limited. The most significant gifts - current or legacy - come from non-income assets. I believe one reason so much money is flowing to DAFs vs charities now is that our messaging and marketing strategies are simply not giving these supporters what they need.

I also see a void between marketing departments (focusing on immediate revenue, low-dollar fundraising, membership fundraising, etc.) and advancement or development teams (planned giving, major gifts). The right marketing could enhance efforts to identify and build relationships with donors who have assets to give, and advancement teams can offer important insights into these donors to their marketing teams.

The Q3 Fundraising Effectiveness Project report just released shows a drop in large gifts (which have been central to sustaining revenue in past years): “As bigger donors represent a bigger part of dollars donated, the decrease in dollars donated has a bigger impact on the overall dollars donated. Supersize donors, for instance, represented 52.4% of all dollars donated in 2022 and accounted for 52% of the overall dollar decrease in 2023.” (FEP)

These reports don’t look at whether these donors are sending their gifts to DAFs instead of charity but I think it’s a reasonable assumption to assume they in large part are. It’s worth pondering: what are our organizations NOT giving these donors that makes it more rewarding for them to shift their funds to DAFs?

Finally, investment in planned giving remains a very low priority, and this void isn’t helping: marketing teams aren’t including sufficient funds in their budget for marketing current and legacy gifts of assets, and planned giving teams aren’t at the marketing table - either because they’ve just outsourced marketing or because we don’t require marketing competency on our planned giving teams.

It doesn’t have to be this way! Join us on January 10 to explore some of these questions.