Recently, I’ve had multiple clients send updates from foundations expressing their desire to fund their nonprofits, but due to budget cuts, they cannot. While these funders have urged my clients to reapply next year, I cannot help but wonder if this will be the new normal. After the passing of the new tax law, nonprofit leaders became concerned about their bottom lines. With the loss of tax incentives for the average American, nonprofits are already feeling the blow - and financial analysts have been tracking the impact.
According to the Fundraising Effectiveness Project (FEP), for the second consecutive year almost every metric has decreased in the first quarter of 2019. What does that mean for the rest of the year? Everyday I receive newsletters, articles, blog posts and concerned messages from clients asking the same question: what does this mean?
Experts and nonprofit leaders suspect that numbers will continue to decrease, especially if the second quarter report yields similar results. What I found to be interesting in the report was that the only metric to increase from 2018 to 2019 was revenue produced by donors giving $250 or less. This appears to be a new trend in philanthropy that may change how we think of individual donors moving forward.
Nonprofits may need to push individual donors to give one substantial gift rather than asking many donors for mid-range gifts. Changes in giving could also mean that nonprofits will need to appeal to a sizable amount of younger donors and middle class donors to give small gifts. It could also mean more appeals to more foundations for supplement fundraising goals (while also recognizing that foundations too have been hit by the decrease in giving).
Is this the new normal?