5 Philanthropic Factors to Inform Your Fundraising Strategy

When it comes to fundraising, it can be easy to fall into the same patterns of what has always worked for your nonprofit. However, it’s crucial to also stay up to date with trends in philanthropy that can guide your fundraising.

In his closing keynote session at NonProfit POWER, “Current Trends in Fundraising,” Erik Daubert, nonprofit management specialist at the Lilly Family School of Philanthropy at Indiana University, highlighted some of the current key factors in charitable giving, and how nonprofits should leverage these opportunities.

1. As Assets Grow, Philanthropy Grows

When the S&P 500 dipped with the internet bubble in 2000, during the Great Recession and with the onset of the COVID-19 pandemic, so did philanthropy, according to Daubert. The converse is also true.

“As assets grow, philanthropy grows,” he said. “In times of financial unsureness or concern, philanthropy tends to be squelched. Believe it or not, a lot of people are worried about outliving their money, and that's true whether they have $10,000, $100,000 or $100 million. Yes, even $100-million people worry about outliving their money.”

Despite worries of outliving financial resources, only 12% of Americans never donate.

Daubert said these actions could help encourage giving:

• Publicly speaking about philanthropy. The Generosity Commission wants people to speak more publicly about their philanthropy. This includes public figures — such as influencers — and other leaders to share how they give and volunteer, as well as how they’ve benefitted from others’ generosity.
• Charitable tax deductions for all. Daubert said it’s crucial to “honor great donors,” no matter what size gift they are able to contribute to your cause, and he thinks that tax deductions should be part of that. He said: “I really believe that a poor person who puts $10 in the collection plate should get a charitable tax deduction the same way that a multibillionaire does.”
• Centering donors. Daubert emphasized the importance of building community. He said: “As somebody who has helped raise billions and billions of dollars, I really believe that the big money in fundraising is made in cultivation and stewardship; it’s not made in solicitation.”

2. Millennials Are a Philanthropic Force

Additionally, while some may think of millennials as not fully being able to participate in philanthropy, Daubert shared insights that point toward the contrary.

According to 2023 data from the Giving Institute, millennials are No. 2 in average household giving per year, with an average household gift of $1,323. They are only bested by boomers, who had an average household gift of $2,568.

“This idea that millennials aren't buying houses [or financially able to make donations] — they're here,” Daubert said. “They're here now, and they are moving into real places in society in terms of economy, and are now the second largest generation in terms of philanthropic activity.”

3. Generosity Is Natural

Another trend that Daubert noted was creating and engaging with a diverse base of donors.

“If you're a person in the world, you are probably a generous person,” he said. “Giving is not specific to any one race, so if you are not engaging with people who look differently than yourself, you are missing an opportunity.”

To find people you may have left out of your donor base, it’s critical to figure out what they value and connect with them there.

“I tell people all the time: ‘I teach five-day courses on philanthropy [and] I teach five-second courses on philanthropy,’” Daubert said. “And most people go, ‘Well, what's your five-second course?’ Basically it goes like this: build relationships, find shared values, ask for money. … Asking is part of the cultivation and solicitation and stewardship cycle, but it shouldn't be the whole thing. That's true with any donor group. If you're not getting more diverse donors — people that don't look or act like you — involved in your nonprofit, it's because they don't see their values in you.”

4. Donor-Advised Funds Are Growing

One key trend that has seen a significant uptick over the past several years is the use of donor-advised funds (DAFs), which Daubert likened to a regular person setting up a mini foundation. Per 2023 data from the National Philanthropic Trust, private foundations had assets worth $1.48 trillion while DAFs had $251.52 billion — just under 20% of foundations’ total assets.

“I like to say: If somebody has a DAF, they are likely the millionaire-next-door,” Daubert said.

Some tips Daubert had for engaging with DAF donors included:

• Making sure DAFs are integrated into your fundraising plan and strategy.
• Asking your donors if they have DAFs.
• Remembering that DAF donors may donate in other ways (cash, stock, etc.)
• Thanking DAF donors for their gifts and not the sponsoring organization. If the gift is anonymous — which is the exception not the rule with DAFs — ask if the organization can pass along your gratitude to the donor.

5. AI Is Inevitable

Closing out his session, Daubert addressed the constant presence of artificial intelligence (AI). While nonprofits may have concerns about adopting AI in their operations and strategies, he highlighted the fact that people have always been wary of new technology, from the telegraph and telephone all the way to televisions and radio.

However, Daubert said that AI comes with a multitude of advantages, including increased efficiency, improved decision-making, personalized donor outreach and reduced costs.

He stressed that it is absolutely essential to use this new technology responsibly.

“In fundraising, trust is our currency,” Daubert said. “... So understand, we never want to use AI to misrepresent something. You never want to use AI to put out a falsehood. I never want a donor to go, ‘Oh, hey, I'd love to meet that person,’ and for me to have to go, ‘Well, actually, we created that person; they're not a real person. That was just an AI creation.’”