Nonprofit Leadership: Leading through Today’s Fundraising Challenges

As a nonprofit Executive Director, Board President, or Director of Development balancing fundraising challenges is becoming more difficult as the giving landscape continues to change. Nonprofit leadership is asking questions like:

• How can we continue receiving the funding we need to operate when giving is down compared to previous years?
• Where can we find new supporters for our mission, outreach efforts, and programs?
• Are our old fundraising methods still going to work in the future, or do we need to take a new approach?
• What are top organizations doing and what can we learn from them?
• How can we think about fundraising more holistically to better align our efforts? ​

---

As nonprofit leaders grapple with finding the answers to these difficult questions, they must understand the following points:

Charitable Giving is Not Universally Down
A lot has been said recently about how charitable giving is down significantly, giving the impression that all giving is down across the board. This isn’t entirely true. Unfortunately, the more that sound bite gets repeated, the more likely it is to potentially become a self-fulfilling prophesy.
​
Yes, charitable giving is down in many places, but it’s not universally down, and today’s program funding challenges seem to be stemming more from a lack of program investment than a lack of funds themselves. So often we see growth going occurring into foundations that simply isn’t flowing down into direct services effectively. In fact, according to Giving USA’s annual report, giving across the following sectors showed considerable growth even when giving was adjusted for inflation:

• Foundations
• Public/Society Benefit
• Education
• Arts/Culture/Humanities

Since fundraising isn’t universally down across the nonprofit sector the question becomes, “What can we learn from the outliers?” Nonprofit leaders need to take a hard look at what top organizations are doing that sets them apart. This is where partnerships and strong professional networks can help! Leverage those around you to offer professional advice on how to improve your fundraising strategy by finding out more about what’s working (and what isn’t!) at other organizations. Then, tailor a plan that combines the success other organizations are seeing with your organization’s specific needs and goals.

Donor Profiles are Changing
At many organizations the face of charitable giving has changed because their donor base has been transformed by external factors. As the cost of living has continued to rise steadily and economic uncertainty has remained on the minds of many, individual charitable giving has decreased across many areas. This has had a major impact on nonprofit fundraising. In 2023 individuals accounted for 67% of charitable giving in the US, which was a 2.4% decline from the year prior when accounting for inflation. To fill current or projected funding gaps some organizations have started pursuing large donors, corporate sponsors, and awarded grants more heavily.

Understanding your organization’s core donor base is integral to determining which types of fundraising approaches are going to fit not only your organizational goals but also your available donor base.

New Nonprofit Fundraising Approaches are Emerging
Lately we are hearing more stories of organizations that are noticing diminished results from their “tried and true” fundraising approaches. The message seems to be clear: approaches that used to be foolproof are no longer necessarily reliable!

There may be a few factors at play here, including the emergence of new fundraising approaches, an evolving donor base, shifting donor expectations, and industry-wide changes in giving practices. It’s hard to pinpoint why this may be the case because it will likely vary from one organization to another, but one thing is certain – these days nonprofits are leaning into new fundraising approaches that either didn’t exist previously or weren’t popular in the past. These can include:

• Peer-to-peer fundraising
• Crowdfunding
• Virtual events
• Cryptocurrency donations

As organizations have tried to expand their donor base by experimenting with new fundraising approaches, it has become clear that customization is always going to be the key to success. Even the “right approach” can’t succeed these days if it’s not tailored to an organization’s specific needs at that specific point in time.

Whether it’s a traditional fundraising approach like a sustained giving program or corporate partnership, or a new fundraising method like cryptocurrency giving, an organization will need to continually reevaluate whether their approach is currently meeting their specific organizational needs. This requires a commitment to flexibility because what worked last year or earlier this year may not be yielding the same results now, meaning that an organization’s leadership must be prepared to adapt as needed to continue seeing positive results.

Fundraising Ownership is Universal
With so many external challenges to effective nonprofit fundraising, it’s easy to look at a drop in giving and blame big social sector forces that nonprofit organizations can’t control. However, doing that doesn’t solve any problems and it certainly doesn’t encourage ownership over finding a solution.

We know that both staff and the Board have an active role to play alongside the Executive Director in raising resources for any successful nonprofit. When only staff or the Board take on this role, there’s often finger pointing and hostility when difficulties are encountered, which results in a lack of cohesion among the organization’s top leaders. Fundraising isn’t just one person’s job, even if you have a Director of Development. Everyone at your organization should feel like they have a role to play in supporting fundraising …because they do! Without effective fundraising, you don’t have an organization (as they say, “No money, no mission!”), which means it touches everyone no matter their role.

Fundraising well requires an alignment of leadership. The Executive Director and Board should work together to improve communication, collaborate on strategic execution, and share the responsibility of fundraising. Dominique Cantwell recognizes the hesitance that some Board Members have when it comes to contributing to fundraising efforts, and recommends that clear expectations are set up front and fundraising is approached as a team to ensure organizational success. These are important steps to take because success in this area need to start at the top.

When your organization needs assistance with goal setting and strategic execution, we can help! Our team is comprised of nonprofit leaders with deep and varied experience across the nonprofit landscape, which means we can offer additional perspectives to help your organization achieve its mission more effectively. Reach out to us for more information about how our nonprofit consultants can come alongside your organization to help offer strategic leadership guidance. Contact us today to learn more!