8 Trends in Fundraising Nonprofit Leaders Should Know

7 min read

July 11th, 2024

Over the last several years, it seems that the world has been turned upside down and right side up and back again. This shakeup has caused our society to change fundamentally. 

 These changes have not only impacted the world of for-profit businesses but also the world of nonprofit organizations, grant funding, and the sensibilities and priorities of individual donors. 

Today, nonprofit leaders are experiencing trends that are changing and challenging their organizations in unprecedented ways - from how you can interact and build relationships with donors and your community to how you can embrace technology for greater efficiency, creativity, and innovation. 

8 Key Fundraising Trends for Nonprofits

1. Nonprofits Struggle to Keep Donors Engaged

According to OneCause's 2023 Fundraising Outlook Report, the two top challenges reported were donor engagement and donor fatigue, followed closely by recurring giving and donor retention. These top challenges are all connected; disengaged donors become fatigued donors who curtail their recurring gifts and stop directly supporting an organization's mission. 

Successful nonprofits will look for creative ways to overcome these rising challenges, and this means nonprofit leaders must learn how to increase their donor engagement (i.e. the frequency and manner in which donors interact with an organization). 

There are several ways to help increase donor engagement (retention and gifts) such as inviting donors to events, providing them with opportunities to volunteer, taking them out to lunch, calling them, making generic communications more personal, or featuring your donors in a newsletter or somewhere in your office. 

Read More: How Much Do Bookkeeping & Accounting Services for Nonprofits Cost?

2. Donors Are Dwindling and Donor Acquisition Has Become Paramount

Since the pandemic, nonprofit organizations have faced the challenge of continuing operations in a climate marked by continuously decreasing funds. There are fewer donors and donors are giving less today than they were last year, the year before, and the year before that. Unfortunately, the charitable giving numbers don't seem to be improving. 

Due to the shrinking number of donors and available funds, nonprofit leaders are becoming increasingly focused on donor acquisition and retention. In OneCause's report, 62% and 58% respectively listed acquisition and retention as critically important in the coming year. The competition for attracting new donors is fierce, so it's not only essential to get more people on board with your cause but also to recognize the true value of those donors you already have. 

[FREE DOWNLOAD] The Ultimate Guide to Board & Management Reports for Executive Directors: 7 KPIs Every Nonprofit Should Be Looking At 

3. Nonprofit Leaders Leverage the Potential of Consultants and Outsourcing

Significant growth is anticipated in the coming years within the nonprofit consultancy market. Thanks to the hiring challenges brought about by the Great Resignation, the attractiveness of working as an independent contractor, and the increasing demand for transparency and accountability in the nonprofit sector, outsourced consultants and professionals are increasingly in demand by nonprofits. Nonprofits are leveraging the convenience and cost savings associated with outsourcing - not to mention the ability to tap into some of the most knowledgeable and experienced professionals in various sectors such as compliance, finance, marketing, IT, human resources, and more. 

4. Nonprofit Leaders Increasingly Turn to Technology for Better Stewardship and Efficiency

For some nonprofit leaders, the idea of learning and using new technology can be daunting. However, leveraging advanced technology in your organization can help you reach more donors, maintain donor relationships, increase donor acquisition, improve fundraising, and more. Some of the technology trends making the biggest impact in the nonprofit sector include artificial intelligence, smart analysis, generative AI, digital marketing, and online fundraising. 

Read More: The Future of Nonprofit Fundraising: Trends and Predictions

5. The Need to Diversify Revenue Channels Is Increasing

As donor numbers and charitable giving continue to shrink, nonprofits need to look to multiple fund sources to eliminate single points of failure in their organizations (i.e. having one donor or fund source that is too big to lose). In addition to maintaining relationships with individual donors, organizations should also look to grant funding provided by the government and foundations in addition to commercial donors, membership dues, recurring donations, and profitable events or programs. 

Additionally, it's important for nonprofit leaders to make an effort to reach younger donors, as Millennials are moving into management roles and Gen Z begins to develop professionally. 

6. In-Person and Hybrid Fundraising Events Make a Comeback

OneCause's report also revealed that, despite the move toward virtual events brought about by the necessities of the pandemic, in-person and even hybrid events perform much better than virtual events. As a result, nonprofit organizations are making the move to return to hosting in-person fundraisers and events with 83% planning to host at least one in-person event this year. 

$ Cost Comparison: What's the true cost difference between a NONPROFIT Outsourced Accounting Team and an In-House Department? 👇

Get A Free Custom Quote Here. 

7. Creative and More Impactful Communication Efforts Are Necessary for Connection

In order to maintain and improve donor engagement, nonprofit organizations need to sharpen their communication skills, increase their efforts, and get creative. This means that more organizations will look to innovative forms of communication while turning to more valuable donor messaging and content. 

Organizations will use a variety of platforms and media to connect with donors and their communities such as social media, email, paper newsletters, phone calls, digital videos, infographics, and more. 

To increase engagement, nonprofits must focus on storytelling that humanizes their mission in addition to numbers-based data that helps demonstrate the actual impact of donors' dollars. Increased communication will help to improve donor engagement, increase organizational transparency, bolster enthusiasm for your mission, and strengthen donor trust. 

Read More: 5 Tips for Nonprofit Fundraising During Times Of Crisis

8. Nonprofit CFOs Lack Access to Data

To improve transparency, build donor trust, and demonstrate impact, nonprofit leaders must have access to reliable and accurate organizational data, including financial data, beneficiary numbers, donor numbers, volunteer hours, event costs, and more. Plus, nonprofit leaders need to be able to easily access their data and understand what the numbers mean. 

Unfortunately, only 18% of nonprofit leaders report having the information they need and being able to use it to make data-driven decisions in their organizations. 

With so few nonprofit leaders having the data they need to make well-informed leadership decisions, many nonprofits will need to invest in improving their back offices and enterprise resource planning (ERP) tools. Only a well-organized back office, sound bookkeeping and accounting procedures, and the right suite of integrated technology tools can provide nonprofit CFOs, executive directors, and boards of directors with the reports, data, and insights needed to maintain a high-performing organization. 

Supercharge Your Fundraising and Financial Management With Nonprofit CFO Services

As more and more nonprofit leaders look to outsourced consultants to support vital aspects of their organizations, you can turn to outsourced bookkeeping and accounting service providers to help you create a well-appointed and well-run back office that can help you strengthen and lead your nonprofit. An outsourced provider that specializes in bookkeeping, accounting, financial management, and financial strategy for nonprofit organizations understands the ins and outs, challenges, and unique needs of organizations operating in the nonprofit sector. 

With outsourced nonprofit CFO services, executive directors have the organizational data they need to join forces with the board of directors, supercharge fundraising, improve financial management, and build a strong nonprofit that can continue working toward its mission long into the future.