Nonprofits have seen their share of challenges in 2024, and while it is difficult to predict what 2025 will bring, here are a few anticipated trends coming for the new year:
- Events: It’s no surprise that it costs nonprofits more to raise money through events than it does to raise money working directly with a donor. The ROI for a fundraising event is typically 3:1. A major gifts program tends to have an ROI of 8:1 or higher. Additionally, events don’t always provide opportunities for donor development and truly engaging donors. Major gifts and legacy gifts will become increasingly more important in 2025 as nonprofits look at how to allocate limited resources.
- The Monthly Donor & The Mid-Level Donor: We’ve all heard the stories about the donor who gave a small donation every month – the person who was thanked and stewarded and ended up leaving the nonprofit in their will. Don’t take these “smaller” donors for granted! Spend time with your data and develop a list of monthly donors and mid-level donors to focus on in the coming year.
- Donor Stewardship: From saying thank you to addressing envelopes accurately, we cannot stress stewardship enough. Never underestimate the power of “thank you” in cementing the relationship with a donor and encouraging them to invest further in your organization.
- Generosity Crisis: According to a 2022 survey by the Generosity Commission, 74 percent of Americans say they aspire to be generous. But contrast that with the data that there are currently fewer donors and fewer volunteers. In fact, the number of US households that donated to nonprofit organizations has dropped to less than 50 percent – from 4 percent in 2008 to 49.6 percent in 2018, as indicated by the Lilly Family School of Philanthropy at Indiana University. The Chronicle of Philanthropy shares more in this recent article from September 2024.
- Turnover Crisis: Nonprofit executives are experiencing a higher level of burnout, with many still helping their organizations recover from the financial challenges created during the pandemic. Nonprofit leaders can often make more money working in the for-profit sector while saying goodbye to the stress of raising funds and other vicarious traumas. At the same time, many nonprofit executives are reaching retirement age. The question is – have we prepared mid-level managers and C-level staff to advance to CEO and executive director roles? Does this group of professionals have the experience to create and manage financial outlooks and organizational strategies, navigate federal funding and human resources issues, oversee compliance and risk issues, and become the public face of a nonprofit? Investing in professional development would be a wise move in 2025.
- Donor Savvy: Donors are becoming more educated about nonprofit financial practices, reserve accounts, and ways to invest in nonprofits outside of cash gifts. Leaders will need to continually educate themselves on estate planning, gift annuities, donor-advised funds, etc. Look to FreeWill for resources and training for nonprofits.
Learn more about Spelman Johnson’s work with nonprofit organizations here.