One year in — fundraising in the time of COVID

As you know, March marked one year since much of our nation shut down in response to the COVID-19 pandemic. In addition to the pandemic, we had the worst recession in our lifetime — with massive numbers of business failures, skyrocketing unemployment, and a stock market that dropped by one-third in one month. We also had the worst civil unrest since the 1960s and a brutally contentious election. 

While all this was happening, Christian donors exhibited a surge of generosity unlike anything I’ve ever seen. The closest thing I’ve experienced was the Ethiopia famine in the 1980s, but that was in response to one specific, terrible need. The giving this year to Christian causes has been widespread, including causes that have nothing to do with people affected by the pandemic. The generosity wave appears to be unique to Christians. Blackbaud’s year-end report on 8,800 charities reported the average charity was down most of the year but a better year-end left them  up by an average of 2 percent for the calendar year.

The increased giving from general donors continues

With our clients this past year, revenue from general donors has consistently been about one-third above the previous year’s. Almost every client is up double digits every month year over year (YOY) since the pandemic began. Who would have expected that? It’s mostly due to this surge of generosity, but it’s also due to the courage of leaders who, in the face of huge uncertainty, continued to follow their plans. They courageously opened their purses and invested more even when it was clear this was going to continue for weeks or even months.

Both direct mail and digital are strong

Direct mail is up by double digits YOY. Fall direct mail acquisition results were the best in over a decade.  And digital is up consistently by over 80 percent compared to Blackbaud’s reported 21 percent for their thousands of charities.

Momentum has not slowed either. January and February online revenue was up 75 percent YOY. Remarkable. 

New donors are converting better than their pre-COVID counterparts

We continue to get asked: Are these like normal donors or like disaster donors? Will they give ongoing gifts at the same rate as new donors before the pandemic? The concern is that if donors are giving only because of the unusual disaster-like situation, they would not convert very well. We’re happy to report that new donors acquired in CY2020 are actually converting better than new donors acquired in CY2019. In direct mail, second gift conversion is better by 10 percent, and in digital, new donor conversion is better by 1.5 percent.

November and December were massive for new donor acquisition

New donor acquisition counts were up by 200 percent in November and December compared to 2019. 

Major donors came through

Major donors ($10,000+) gave more large gifts in 2020 than in 2019. The average gift was lower, but the net effect was approximately the same total giving. Most organizations saw similar giving from majors in 2020 as 2019. There were outliers though. Some organizations experienced substantially more giving from majors and some saw substantially less. Often, the decline is due to anecdotal reasons related to specific industries that the donors work in (for good or bad) or from one or two very large, cautious donors. 

What’s next? 

“It’s tough to make predictions, especially about the future,” as Yogi Berra said. I’m humbled by how far off our predictions were at this time last year. But I will venture to say:

  • The increased response of Christian donors to all fundraising channels will continue. During the Ethiopia famine of the 1980s, giving was phenomenal for nine months until two scandals hit the news at the same time: an organization had raised millions and not sent a dime to Ethiopia, and the Ethiopian government was revealed to be charging duty on donated food. That was the end of that run. I don’t see anything on the horizon like that. And this surge in giving is not driven by media coverage of a flood or other disaster.
  • The huge increase in digital channel response will continue. Even if everything else goes back to normal, consumer behavior has changed. According to the Federal Reserve, online commerce has been steadily growing as a percentage of total commerce by 1 to2 percent per year. 2020 pushed us four to five years ahead of that trendline. Will people go backward in their use of online commerce? I don’t think so. That means giving through online channels should continue to increase from this year’s level.

I’m starting to wonder if God has stirred many Christians into a new normal — they are just giving more. Christians have been giving 2.5 percent of their income for a long time. That’s a number I’ve heard quoted from many sources throughout my career in Christian fundraising. The Old Testament command was to give 10 percent. While we are not under the law, should we not be at least as generous? During the Great Depression, Christians gave 3.3 percent. May it be that we have finally broken out of that 2.5 percent rut.

If your organization’s income is up substantially, be sure to invest some of it in expanding new donor acquisition. We are still seeing strong results in online donor acquisition every week so far this year. We expect the same in direct mail in the coming months.

Also, pay close attention to how you are onboarding all those new donors. We are seeing almost no crossover in channels. Donors acquired in a channel are giving virtually all their gifts in the same channel. Cultivation of online-acquired donors through continued online marketing is a vital issue. 

Please let us know if you have questions or if there’s anything we can do to help.

Happy Easter…He is risen!