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If your nonprofit is global or pursuing donors in the UK, this article will highlight charitable giving in the UK and how geography impacts the structures and tools linked to fundraising success.

The US and UK are statistically among the most charitable countries in the world, operating as global financial centers in New York and London and home to populations with enormous wealth. However, while the US and UK both maintain extremely influential positions within the global philanthropic landscape, the differences between the two countries’ cultures of giving are as notable as their similarities.

Consider the following four factors that impact UK philanthropy to tailor your fundraising strategy.

1. Donor Wealth and attitudes toward wealth impact charitable giving in the uK

While it’s true that the US and UK rank as some of the world’s wealthiest countries, the US has a much larger Gross Domestic Product (GDP) than the UK, and consequently, more money goes to philanthropy. As a percentage of the total GDP, US individual giving is more than double that of the UK at 1.37% to 0.52%. This difference reflects the wealth disparity between the two countries; people in the US have more money and thus give more to philanthropy.

However, it’s important to note that in terms of charitable giving as a population percentage, 71% of UK adults report donating annually to charity, compared to 61% in the US. This suggests that a larger proportion of individuals exhibit generosity in the UK by giving smaller amounts; conversely, fewer individuals in the US make larger gifts.

This divergence in donor behavior should inform your fundraising strategy accordingly—bigger gifts from a smaller group of donors are expected in the US; smaller gifts from a larger group of donors are more common in the UK.

2. the social safety net shapes UK donor motivations

At face value, social spending, or the measurement of how much a country spends to support the standard of living for vulnerable or disadvantaged groups, is similar in the US and UK. According to the Organization for Economic Cooperation and Development (OECD), as a percentage of GDP, the US and UK governments spend 22.7% and 21.1%, respectively, on health, education, family, unemployment, housing, and benefits for older adults or those with disabilities.

cultural expectations of Governmental Support affect uk charitable giving

However, voluntary private social spending, or benefits offered by privately operated organizations, including most nonprofits, accounted for almost 13% of GDP in the US versus a mere 5.85% in the UK. This discrepancy suggests that, while the cultural expectation in the UK is that the government will meet (or highly subsidize) most social needs, the US population is far more accustomed to relying on support from other sources, including employers, insurance companies, and other privately supported entities, including nonprofits. The higher education sector illustrates this point—the British government standardizes, caps, and subsidizes university fees. In contrast, top-ranked colleges and universities in the US often have extremely high tuition fees (financial aid and scholarship opportunities notwithstanding).

These differences align with the popular, though perhaps not entirely accurate, assessment that American culture lends itself to smaller government and more individual responsibility compared to the higher taxes, stronger social safety net, and collectivism favored by European societies. Indeed, 13% of US donors cite inadequate government support as a motivation for philanthropic giving.

3. donors are Partly motivated by tax benefits, which differ in the UK

The US offers more donor tax benefits for charitable giving than the UK and encourages donors to give through various wealth vehicles, including their estate and noncash assets, like art and real estate. US taxpayers can also offset their annual tax bill through cash deductions from donations made throughout the year to registered nonprofit (501(c)(3)) organizations. US-based donors also receive the same tax benefits for giving to nonprofits abroad through equivalency determination, which is nonexistent in the UK.

The US offers donors more options to give to nonprofits and opportunities to reap the financial benefits. It is common in the US for the highest income earners to view donating to nonprofits as an annual necessity for tax purposes, which makes sense considering that a smaller percentage of donors gives more money in the US.

Meanwhile, the UK offers various tax benefits for UK donors giving in the UK, but these benefits do not apply when a UK donor gives outside of the UK.

A picture of a financial advisor discussing the tax benefits of charitable giving in the UK with two British donors.

4. gDPR limits fundraisers’ use of UK Donor Information

General Data Protection Regulation (GDPR) is the world’s strongest set of data protection rules. Implemented in the European Union (EU) in 2018 and retained in UK law following their departure from the EU, GDPR limits how US organizations and fundraisers can use personal data, creating a substantial difference in privacy and data-sharing norms in the UK compared to the US. While federal- and state-level privacy regulations exist in the US, they vary across states and do not offer the same level of data protection as GDPR.

While the benefits of GDPR for privacy are indisputable, GDPR does impact fundraising strategies by placing strict guardrails on publicly available information. You cannot use the prospect identification and fundraising research software nonprofits commonly employ in the US—such as Wealth Engine and iWave—for British donor research. Instead, you will need to rely on publicly available information from specific sources, including public registry data, the Charity Register, and the news media. Further, US fundraisers must comply with GDPR regulations, as its rules apply to any organization, regardless of location, that processes the personal data of individuals within the European Economic Area (EEA), which includes the UK.

Understanding Charitable Giving in the UK can strengthen your Fundraising Strategy

As the global philanthropic landscape continues to grow and change, now is the time for your nonprofit organization to consider where it is headquartered, where its donor constituencies are located (or could be located), and where its programs make an impact.

While there are pros and cons to US and UK fundraising, norms and circumstances in the US tend to foster more significant philanthropy than in the UK. Nevertheless, a larger percentage of the UK population participates in charitable giving than the American population. By leveraging this key distinction and the other influential factors we have identified, you can meet UK donors where they are and expand your fundraising.

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Why Your Church Should Consider an Increased Offertory Program

May 14, 2024

To keep up with inflation and growing expenses, it is vital that churches also grow donor giving over time. An increased offertory campaign can help begin that process.

Article

Your Guide to Finding, Engaging, and Retaining the Next Donor Generation

May 13, 2024

The future of philanthropy revolves around engaging our next generation of donors—Generation Z and Millennials. Understanding how to attract, retain, and grow your young professional pipeline will ensure long-term sustainability for your organization.

Philanthropic support for the education sector has nearly doubled in the last ten years, and it is no surprise that the commitment of generous alumni serves an integral role in this significant increase. Wondering how to get alumni to donate to your institution?

As those responsible for the advancement operations of schools know, the engagement of alumni is essential for a healthy and robust donation pipeline. In fact, 15% of annual fund support at primary and secondary schools comes from alumni. Among colleges and universities, the top three alumni engagement strategies include alumni reunions/events (59%), annual giving campaigns (50%), and targeted digital communications (43%).

For many advancement shops, the role of alumni engagement and gift officer lies in separate silos; however, successful leaders in advancement understand the need for deep partnership in order to effectively build a comprehensive and dynamic alumni donor program.

In this article, we share three strategies to help create an aligned partnership between your alumni engagement and gift officer teams.

Fully immerse alumni engagement team members in fundraising strategy

Where there is a disconnection between alumni engagement and gift officer teams, miscommunication and information gaps can arise and be detrimental to the larger goal. To create a robust alumni donor pipeline, leadership must be intentional about including alumni engagement team members in donor strategy conversations.

As the advancement team looks at the philanthropic goal for the institution, we encourage you to include the alumni engagement teams in early prospecting work to help inform gift officer portfolios. The alumni engagement team has a working knowledge of alumni prospects that may lie outside of traditional data analytics results such as an RFM analysis. This information can be invaluable to adding a personal approach when developing gift request strategies. Coach alumni engagement team members by reminding them that they are just as much responsible for revenue-generating goals throughout the years as their gift officer counterparts.

It is beneficial to create a fundraising workshop for the entirety of your advancement team to share best practices in fundraising and alumni conversation cues and ensure your alumni engagement staff members feel confident with your fundraising goals. Gift officers should also make it a practice to include alumni engagement team members in gift request meetings to cultivate a working partnership.

Align Alumni Engagement Activities to Get alumni to donate

When developing the activities calendar for alumni engagement, team members should actively review gift officer pipelines to understand which prospects could be invited to serve as volunteer leaders, thus deepening their engagement with the school. Gift officers should advocate within alumni engagement team meetings for opportunities for their prospects and ensure activities align with the overall philanthropic goal for that year.

A picture of an Alumni Engagement team member and gift officer going over a calendar of alumni engagement activities to get alumni to donate.

As the team assesses each gift officer’s portfolio, it is essential to highlight the status of each prospect and dive deeper into how to move them along the moves management cycle. When reviewing the advancement pipeline, ensure all team members understand the importance of serving the school’s donor pipeline and how each activity moves alumni closer to that end goal. Alumni engagement team members must understand that their activities, which at the surface focus on engagement and stewardship, deepen their engagement and provide opportunities for future financial investment.

When we look at our prospects in relation to their moves management status, I coach my team to understand that we play a role in every stage—with a particular emphasis on discovery, cultivation, and stewardship.
Heidi Bruce, Assistant Vice President, Alumni Relations & Strategic Engagement, Morgan State University in Baltimore, MD

As events near, alumni engagement and gift officer teams should strategically plot the tactical steps of identifying volunteers, recruiting attendees, having event conversations, and following up. This partnership allows for a comprehensive approach to event engagement and provides gift officers the support they need.

get alumni to donate by Creating operational systems for internal alignment

In many cases, alumni engagement and gift officer teams are aligned in strategy but fall short on results because the operational structures are not established to serve their partnership. Advancement leadership should ensure the following operations items are established:

Establish a synchronized platform for both alumni engagement and gift officers

When teams operate out of several databases or user interfaces, information continues to be lost, and an unintentional divide is created. Operating out of one streamlined system allows for teams to communicate seamlessly, pull reports with meaningful datapoints, and develop aligned strategies with accountability metrics.

A picture a member of an Alumni Engagement Team pointing to information on their desktop computer as a Gift Officer observes their synchronized platform to get alumni to donate.

Institute bi-weekly prospect review meetings with alumni engagement and gift officer teams

When reviewing prospects, identifying volunteers, or establishing strategy, all members of the team should feel involved in this work. Alumni engagement team members can inform gift officers of donor historical context and involvement, notable updates, and nuanced information. Gift officers should engage alumni engagement team members in initial meetings, briefing or visioning sessions with donors, and, where appropriate, gift request meetings.

Include alumni engagement and gift officer leaders in institutional leadership prospect briefing

Just as alumni engagement and gift officer teams should collaborate to develop strategies for prospective projects, it is important that both present plans to institutional leadership for how to get alumni to donate. This will provide the president or head of school with a high-level perspective on alumni and create a comprehensive view of alumni involvement and how best to request their financial support.

A picture of members of the Alumni Engagement and Gift Officers teams briefing the Head of School on prospects and how they will get alumni to donate.

strong alumni engagement Is essential for Getting Alumni to Donate

Engaging your alumni is essential to the development of a robust donor pipeline and to ensure the sustainability of your institution. Strengthening the partnership between alumni engagement and gift officers will ensure a comprehensive approach to alumni engagement, resulting in more meaningful relationships and deeper, lasting support.

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Charitable Giving in the UK: Fundraiser Considerations

July 9, 2024

The US and UK are bastions of charitable giving. However, fundraising is not “one-size-fits-all,” and geography influences best practices. Learn factors that differentiate philanthropic trends and donor motivations in the UK from those in the US to tailor your fundraising strategy to UK donors and achieve the best results.

Video

Perspectives on Philanthropy | Giving USA 2024

June 25, 2024

Explore this webinar marking the release of Giving USA 2024: The Annual Report on Philanthropy, presented by CCS Fundraising in partnership with the Indiana University Lilly Family School of Philanthropy!

SEE ALL IN: Higher Education Primary and Secondary Education

In an era where personalization and efficiency are paramount, artificial intelligence (AI) in fundraising opens novel avenues for your organization to enhance its outreach and engagement strategies.

At the heart of this revolution lies the potential of Custom Generative Pre-Trained Transformers (GPTs), a cutting-edge no-code AI feature allowing users to create customized chatbots. This unlocks incredible potential for nonprofits, including tailoring donor communications, proposal writing, and processes to unprecedented specificity, efficiency, and relevance. However, “with great power comes great responsibility.” The landscape of AI tools, like Open AI’s ChatGPT, Microsoft Copilot, and Google Gemini, is rapidly evolving and reshaping the sector’s ethical boundaries and operational norms. Knowing how to adapt and evolve with these changes is equally as important as understanding what AI can do for you.

What is Generative AI?

At its core, AI is the digital simulation of human intelligence programmed to think and learn—a digital brain that can process information, make decisions, and even predict outcomes based on data.

Generative AI platforms play a crucial role for nonprofits by creating text, images, and ideas from large data sets. ChatGPT, for example, excels in understanding and interacting in human language, making it invaluable for creating personalized communications. The landscape of generative AI is dynamic and other platforms like Copilot and Gemini are gaining relevance as well. Viewing ChatGPT as the initial benchmark rather than the ultimate solution acknowledges the rapidly evolving nature of the field.

What are Custom GPTs?

The latest advancement to ChatGPT and Copilot suites for nonprofits is Custom Generative Pre-Trained Transformers (GPTs). These tailored, no-code user-created versions of ChatGPT carry out specific tasks or purposes aligning with an organization’s specific needs. Among other applications, Custom GPT models can be trained to match your nonprofit’s voice, values, and fundraising goals. It can act as an efficient assistant who understands your organization and provides insights and creativity to support your mission.

Custom GPTs allow fundraisers to automate and personalize donor communications and create compelling fundraising campaigns. They can also handle repetitive tasks, freeing your team to focus on the more strategic and creative aspects of fundraising—they enhance, rather than replace, human effort.

Custom GPTs are a Transformative Fundraising Tool

Imagine moving out on your own and receiving a toolbox as a housewarming gift. Inside, you find various tools: screwdrivers, a hammer, pliers, and some unfamiliar tools. Initially, you might only use those you recognize, like the screwdriver and hammer. However, you learn about the other tools over time and discover their unique purposes, realizing the toolbox’s full potential.

In the context of nonprofits, ChatGPT and other generative AI models are like this toolbox. Many organizations already use basic AI tools (e.g., the screwdriver and hammer) for tasks like writing an email or a thank you note. But just like the unused tools, there is untapped potential in the less familiar tools hidden in AI technologies. Custom GPT models may seem complex at first, but hold immense potential for those who take the time to understand and utilize them.

For example, a standard AI tool might help you draft a generic thank-you letter to donors. In contrast, a Custom GPT can be trained to write personalized messages tailored to each donor’s interests and history with your organization. This shift moves from generic, one-size-fits-all solutions to bespoke communication strategies that significantly enhance donor engagement and fundraising effectiveness.

The key message is that AI’s potential is vast and largely untapped. Just as you wouldn’t use a hammer for every household task, it’s essential to understand the various AI tools available and strategically apply them to maximize impact.

4 Benefits of using Custom GPTs for fundraising

In our experience, the main benefits of Custom GPTs for nonprofits include the following.

1. you can Tailor them to Your Brand Voice

One of Custom GPTs standout benefits is their ability to adapt to and replicate your organization’s specific brand voice. This ensures that all communication—whether donor outreach, campaign materials, or social media content—consistently reflects your organization’s values and tone. For example, if your nonprofit has a compassionate and empathetic voice, you can train a Custom GPT to mirror this style so that your messaging resonates deeply and authentically with your audience.

2. they can Enhance your Fundraising Strategies

Custom GPTs can revolutionize how you conceptualize and execute campaigns. They can assist you in drafting personalized proposals, creating dynamic content for different donor segments, and suggesting ideas based on data trends. This customization makes your campaigns more engaging and likely to succeed.

3. They can Streamline your Operations

We cannot overstate the way Custom GPTs enable efficiency. They can streamline routine tasks like donor communication and report generation, freeing up valuable time. Your team will be able to focus on more strategic and creative projects to help your nonprofit grow.

4. they are Scalable and Adaptable

As your nonprofit grows and evolves, so can your suite of Custom GPTs. They are designed to learn and adapt, ensuring they remain an asset regardless of your organization’s needs changing over time. This adaptability is crucial in the nonprofit sector, where shifts in donor interests and giving trends are common based on the season and year-over-year.

an illustrative example of leveraging Custom GPTs

Imagine a scenario at a large university where the development team plans to approach a donor interested in supporting a specific program and associated research lab. The team utilizes a Custom GPT trained with the university’s customized endowment language and giving opportunities. The AI helps draft a proposal aligning with the donor’s interests, incorporating the latest research initiatives and potential impacts of their contribution. It also suggests a tailored ask level based on the donor’s previous giving history, wealth capacity rating, and engagement, resulting in a highly personalized and compelling proposal, significantly increasing the likelihood of a successful endowment.

In these fundraising applications, Custom GPTs enhance human creativity and strategic thinking, acting as a force multiplier and enabling teams to achieve more with less in a way deeply aligned with their organization’s mission and values.

Ethical considerations and Limitations of Custom GPTs

Ethical AI use in fundraising revolves around transparency and respect for donor privacy. Verifying that your organization conducts all AI-driven communications and analyses with the donor’s knowledge and consent is paramount—it’s how you maintain donor data integrity and confidentiality. AI is a tool for your organization to enhance human connection, not replace it. Custom GPTs personalize communications, but the human element’s authenticity and sincerity must remain at the forefront.

AI has a limited ability to Understand Human Nuance

While ChatGPT, Copilot, and Gemini can process and generate information based on data, they lack the innate human ability to fully understand complex emotional nuances and ethical considerations. This limitation is particularly evident in sensitive situations, such as communicating with a donor who recently experienced a personal loss or during crisis communications. In these cases, a human fundraiser’s nuanced understanding and empathy are irreplaceable and crucial for reviewing all AI-generated communications.

Artificial intelligence is Not a Standalone Solution

It’s also important to recognize that AI is a tool, not an end-state solution. Relying solely on AI for all fundraising aspects can lead to a lack of personal touch and potentially overlook unique opportunities only identifiable to humans. We recommend that you take a balanced approach, with AI complementing your human skills and intuition.

Regular Monitoring and Updating of ai systems is crucial

AI is rapidly evolving, as are its ethical considerations and best practices. Regularly updating and monitoring the AI systems for biases, inaccuracies, or ethical concerns is crucial to ensure the technology aligns with your organization’s values and current standards and continues to serve your mission effectively and ethically.

Generative AI Outputs require Editing

Another Custom GPT consideration is that you cannot rely on the output as-is. For example, ChatGPT has been known to write untrue or exceptionally biased statements. Similarly, the dangers of making a custom GPT include misuse, users getting access to proprietary data, and harm to an organization’s brand. Do not use any document or data that you do not want to become public in these custom GPTs.

there are data privacy CONCERNS around ai use

The fundraising opportunities offered by ChatGPT and other generative AI tools are not without any ethical and legal concerns. ChatGPT, Copilot, and Gemini are open-knowledge AI models, meaning all the information they gather comes from what is publicly available on the internet (although ChatGPT and Copilot lag a couple of months behind in their respective knowledge bases), as well as any data they collect from users. This can cause apprehension: how can we use AI models while ensuring data safety? How can we adhere to data and research policies so that we can be proud of the work we do through AI? How do we ensure that the work remains ours?

options to maintain Data Privacy with AI usage

Generative AI models use all the prompts, responses, and information fed into them as additional training material. This feature is a crucial part of machine learning, but providing a chatbot with confidential information may, unfortunately, also breach data privacy policies.

What are your options for maintaining data privacy?

Offer anonymous and nonspecific information: Opt to be more conscious of how precise you are in information sharing. Rather than providing all the necessary information, it can be helpful to curate slightly more general prompts. How can you find a balance between altering prompts to allow for individualization and avoiding giving away too much private information?
Pay for data privacy: Custom GPTs offer an additional settings option to turn off ChatGPT’s ability to learn from your data. This setting is locked behind a paywall but is currently the only way an individual account can ensure that confidential information is not leaked.

Regardless of your approach, it is important to confirm your AI engagement aligns with your institution’s risk and data protection policies.

There are also PLAGIARISM AND ETHICAL concerns around ai use

Another concern is regarding ownership. How can you feel that AI-produced work—even a rough draft—is still the result of your efforts? While generative AI chatbots appear capable of creating individualized content out of thin air, this is not entirely the case. Generative AI cannot generate anything nonexistent; it mimics reality but does not create novelty. Ultimately, we must curate accurate, well-developed prompts if we want ChatGPT or other models to create a useful draft document.

To address ethical concerns, fundraisers using AI chatbots must be extremely conscious of how they craft their initial prompts and follow-ups, as well as how they review, fact-check, and work from any of their responses. Take the steps to transform the AI model’s writing into your final deliverable, a process requiring time and effective planning.

While AI’s efficient, customizable generation is not without drawbacks, knowing what to be vigilant of is the best way to maximize what generative AI can do for you.

Custom GPTs are the Future of Fundraising

As we look to the future, one thing is clear: integrating AI in nonprofit fundraising is not an option but a necessity for those looking to stay relevant and effective in a rapidly changing world. Embracing AI with a thoughtful, strategic approach will enhance your fundraising efforts and assure that your organization continues to make a meaningful impact in the communities you serve.

However, the journey to effectively integrating AI into your fundraising strategy requires a deep understanding of the technology, a commitment to ethical practices, and a readiness to adapt to continually evolving tools. We encourage you to continue educating yourself with our growing library of AI resources and reach out to CCS Fundraising if you need a customized partnership.

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Optimize Major Gift Portfolios Using Predictive Modeling Scores

May 30, 2024

Major gift portfolios determine where relationship managers will spend their time and energy. So, how can nonprofits ensure they’re focusing on the right donors?

Publication

AI in Fundraising

May 20, 2024

Elevate your nonprofit’s fundraising strategies with artificial intelligence (AI)! CCS’s newest thought leadership provides valuable insights, strategies, and tools to propel your organization and achieve unprecedented mission success.

You may already know that predictive AI can unearth new major gift prospects. But how can predictive modeling help you optimize major gift portfolios that are already assigned?

Predictive modeling evaluates two critical factors for fundraising success:

Portfolio Quality (Are the right donors assigned?)
Portfolio Performance (Have we captured the available fundraising potential?)

At CCS Fundraising, we leverage these factors to evaluate and optimize our clients’ major gift portfolios.

Step 1 to Optimize major gift portfolios: Evaluate Quality

A quality major gift portfolio includes prospects with both capacity and affinity, meaning they have the financial means to donate and an interest in supporting your organization.

capacity and affinity

To estimate capacity, we perform external wealth screening research, analyzing assets, real estate, income, and public giving data to estimate how much a household can donate to all charities over five years.

Nonprofit CRM data provides valuable insights into donor affinity. CCS uses this internal data to create predictive models that score the likelihood of each donor contributing to your organization.

CCS visualizes portfolio quality by combining affinity and capacity data into a quadrant chart. Prospects scoring high on predictive models and showing significant gift capacity fall in the upper right quadrant.

A quadrant chart showing how to optimize major gift portfolios by scoring major gift prospects on capacity and affinity.

Key questions arise from this visualization:

What proportion of our portfolio is in the upper right quadrant? Ideally, the entire portfolio should fall there. Realistically, portfolios with at least 50% of prospects in this quadrant are considered high quality.
Which prospects are of lower quality than expected? CCS often recommends removing certain prospects from the portfolio for optimal use of gift officers’ time. Displaying capacity and affinity together helps pinpoint donors for removal.

Step 2 to optimize major gift portfolios: Evaluate Performance

Beyond assessing portfolio quality, it’s crucial to evaluate portfolio performance. Even with ideal prospects, a portfolio might not reach its full fundraising potential.

We estimate portfolio performance using the capacity capture rate metric, the ratio of a prospect’s last five years of giving to the minimum value of their estimated gift capacity range. Essentially, the capacity capture rate measures the percentage of a donor’s total giving capacity directed to your organization.

Remove Outliers

A client example shows how outliers can skew the average capacity capture rate. When the average rate significantly differs from the median, outliers likely influence the data. Removing these outliers clarifies the underlying capture rate for the entire portfolio.

Analyze seemingly strong major gift portfolios

CCS typically sees an average capacity capture rate of 10% and a median of 1%. Higher values indicate strong portfolio performance. However, even if overall numbers are positive, deeper analysis can uncover valuable insights.

The capacity capture rate graph reveals key data for portfolio segmentation and prioritization, including:

The percentage of the portfolio that hasn’t donated in the last five years.
The percentage of the portfolio underperforming relative to donor gift capacity.
The number of prospects giving more than 100% of their estimated gift capacity suggests an underestimation by the wealth screening vendor.

In the case of the client example above, we know there are outliers who unduly influence the average. When the average capacity capture rate is meaningfully different than the median capture rate, there is a good chance that there are some outliers. Removing the outliers can help us get a better sense of the underlying capture rate for the portfolio as a whole.

CCS typically sees an average capacity capture rate of 10% and a median capture rate of 1%. Values greater than that indicate a portfolio that is performing well. However, even if the overall numbers indicate good portfolio performance, digging a bit deeper can uncover more valuable information.

The chart above illustrates the capture rate ranges. This graph shows some key pieces of data that can help inform the segmentation and prioritization of the portfolio, including:

The percentage of the portfolio that hasn’t made a gift in the last five years.
The percentage of the portfolio underperforming in the context of a donor’s gift capacity.
The number of prospects who are giving more than 100% of their estimated gift capacity indicates that the wealth screening vendor has underestimated the capacity.

Step 3: Bring Quality and Performance Data Together to optimize major gift portfolios

The chart below shows a segmentation we recommended to a client considering their major gift portfolio’s quality and performance data.

A chart showing donor segmentations based on quality and performance data to optimize major gift portfolios.

Combining quality and performance data provides a comprehensive view of your portfolio. This approach helps make data-driven decisions to optimize your portfolio, identifying prospects for removal, further research, or new engagement strategies while confirming successful current strategies.

Fundraising teams that optimize major gift portfolios with predictive modeling ensure their limited time and resources yield the best possible results.

We make major gift fundraising easy.

Learn more from our team of data analytics experts.

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Major Donor Fundraising: Finding New Prospects With Predictive AI

May 10, 2024

CCS’s Senior Data Scientist John Sammis explains how your nonprofit can use predictive AI to unearth new major giving potential in your donor database.

Article

RFM and Wealth Screening for Major Gift Strategy

June 29, 2022

Learn how to perform an RFM analysis, the simplest tool to start narrowing your prospect list to your most impactful donors. This article contains background information and a video to lead you step-by-step into meaningful engagement.

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Is your nonprofit acquiring new donors but finding it challenging to keep them? If so, you’re not alone. The 2024 CCS Philanthropy Pulse report reveals that donor retention remains a top challenge, as only 48% of nonprofit organizations reported keeping over half their new donors from the previous 12 months.

Successful stewardship builds trust and loyalty. Further, donors who feel appreciated and connected are likelier to become repeat contributors, increase their giving over time, fulfill multi-year pledges, and even advocate for your organization among their networks.

What Is Donor Stewardship?

Stewardship is a relationship-building process requiring the strategic management of donors through consistent communication, personalized engagement, and demonstrated impact.

A successful stewardship program:

Improves your donors’ experience through engagement and appreciation
Educates the donor about your organization’s mission, particularly as new programs emerge
Highlights donor impact
Accelerates pledge fulfillment through consistent interaction
Builds personal relationships between the donor and the assigned relationship manager
Increases donor retention as donors feel valued and appreciated

A positive stewardship experience has the power to turn a one-time donor into a longstanding partner of your organization.

best practices for strengthening your donor stewardship program

1. timely and grateful acknowledgement

Promptly thank a donor for their contribution—ideally within 24 to 48 hours. Express sincere gratitude and mention how their support will make an impact. Acknowledgment should be tiered based on the donor relationship, with some donors receiving standardized, personalized, letters while major donors should receive phone calls and hand-written notes. For transformational gifts, senior leadership should make personal, immediate outreach to the donor.

2. regular, personalized communication

Utilize data analytics to understand donors’ preferences, interests, giving history, and communication styles. Tailoring communication based on a donor’s preferences and interests will foster a stronger connection. Use existing touchpoints and think outside the box to maintain donor engagement, such as events, volunteer opportunities, or guided tours. Provide updates on the organization’s programs, achievements, and impact—ensure you are connecting with the donor throughout the year in ways beyond solicitation.

3. Involving donors in your mission

Engage donors beyond financial support and let donors experience your nonprofit’s mission in action. This could include engaging them as volunteers, event attendees, committee advisors, or key stakeholders or having them share their expertise with your organization.

4. recognition opportunities

Discuss recognition or naming opportunities with the donor to identify what would be most meaningful, depending upon the size of their gift. These opportunities should be customized for each prospect—many donors are not looking for public recognition, so it’s important to know their preferences.

5. impact reporting

Show donors the tangible impact their support has made on the organization through individual impact reports, newsletters, annual reports, or other creative storytelling opportunities. Use data to quantify the outcomes of their support as much as possible. Visual representations such as infographics or success stories can make donors feel closer to the mission and see the impact they make with their gifts.

6. seeking feedback

Solicit donor input via surveys, focus groups, or one-on-one conversations to understand their preferences, satisfaction levels, and suggestions for improvement. With so many organizations making timely donor stewardship a standard practice, creativity can make all the difference in retaining strong donor relationships.

7. diversifying your approach to donor stewardship

Think outside the box to create memorable and meaningful donor interactions. Innovation can look like sending a personalized video message from beneficiaries expressing gratitude, an invitation to insider events, or behind-the-scenes access to the organization’s work. Creative stewardship approaches leave a remarkable impression and deepen the donors’ emotional connection to the cause.

8. placing a premium on efficiency

Maximize your capacity—effective stewardship does not necessarily require additional resources. Organizations should leverage existing resources such as volunteer networks, social media platforms, and current staffing infrastructure to enhance a donor’s experience. For example, volunteers can write personalized thank-you notes, or donors can be invited to a behind-the-scenes day in the office.

donor stewardship helps you find—and keep—your donors

Stewardship and fundraising should be viewed as the same: a continuous journey of nurturing relationships, building trust, and inspiring generosity. Organizations can cultivate an engaged and committed loyal donor base by prioritizing donor relationships and implementing best practices. We repeatedly see that effective stewardship drives donor retention and increased giving.

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How to Get Alumni to Donate Through Effective Internal Partnerships

June 21, 2024

Learn how to get alumni to donate for fundraising success with effective internal partnerships at your education institution.

Article

Custom GPTs for Fundraising: A Nonprofit Guide

May 31, 2024

Learn about Custom Generative Pre-Trained Transformers (GPTs), their application in fundraising, and how you can harness their capabilities to streamline your fundraising efforts and forge deeper connections with donors.

Many parishes opt for a campaign when considering capital projects or debt reduction, but often become intimidated by the tremendous needs and the equally tremendous goals associated with such an endeavor. CCS Fundraising always recommends doing a thorough analysis to assess the feasibility of a capital campaign before deciding whether to move forward in that direction. If your conclusion is that your parish is not ready for a large or extensive campaign, it would be wise to consider an alternative approach: conducting a campaign to increase weekly collections.

Like most charities, operational funding in churches often comes from annual giving. To keep up with inflation and growing expenses, such as maintenance, compensation, and benefits, it is vital that churches also grow donor giving over time. An increased offertory campaign can help begin that process.

Increased Offertory Programs Are an Easy alternative to large Fundraising campaigns

Many religious denominations have used pledging and annual stewardship drives for years and, as a result, encourage their members to grow their giving regularly. But what about those churches (especially Catholic parishes) that haven’t developed such programs?

CCS’s experience shows that Catholic churches (and even entire archdioceses and dioceses) are more often turning to increased offertory programs to overcome financial challenges and fulfill unmet needs. These programs can be easy to implement and can help you accomplish the following:

Educate parishioners on the need to be responsible stewards of the gift that is their church
Commence discussions regarding the importance of increasing giving annually to keep up with growing expenses
Get more parishioners involved as volunteers
Start a pattern of written commitments that can aid in real-time budgeting
Address real financial needs in a fair approach that doesn’t negatively impact a parish’s ability to run a campaign at a later date

Increased Offertory programs Have a High Return on Investment

These programs are indeed easier to run than a traditional capital campaign, and can often be completed in a period of seven weeks. They have also proven to be very effective. Through our work in this sector around the world, CCS has found our tailored increased offertory programs to elevate parish giving as much as 25% with sustained levels of increased giving during the years that follow our engagement. When combined with broad implementation of electronic giving by parishioners, these increases can be “locked in” and generate a steady stream of additional revenue for the parish.

For over a decade, CCS has helped parishes in the US and UK conduct over 170 increased offertory programs. These programs engaged 1,040 volunteers, and saw more than 9,740 commitment forms returned. Parishes gained an average 21% increase in giving, ending with a projected $8,676,111 (in current US dollars) increase in annual offertory. Some parishes even experienced an increase that approaches capital campaign results when calculated over five years.

Just as important as the results, however, is the cost. Most of these increased offertory campaigns saw a complete return on their investment after just five weeks of increased collections.

volunteer leadership and clear objectives are key

Volunteers are the key to generating the highest response and keeping the costs. A well-run program will take advantage of every communication channel a parish has to offer: the bulletin, the pulpit, mail, email, social media, and the personal contacts made by parishioners. These contacts need not be solicitations, but rather a personal reminder to respond and a testimonial about why the parish is so important to them. These personal contacts help reduce the number of mailings needed in the program and have been proven to generate higher rates of commitment.

When planning an increased offertory program, it is important to have a very clear sense of what you hope to achieve. In addition to increased financial support, an increased offertory program should focus on achieving the following objectives for the parish:

Identifying parish strengths, weaknesses, opportunities, and threats
Increasing the clergy and laity’s understanding of the principles of stewards
Developing ongoing educational and faith formation opportunities
Obtaining parishioner commitments of time, talent, and treasure
Increasing parishioners’ active involvement in parish and diocesan life
Growing Mass attendance
Upsurging registration
Increasing giving
Developing and implementing a plan for ongoing commitment to the principles of stewardship

Increased offertory programs support a culture of giving

In the end, however, the ultimate objective of an increased offertory program is changing the pattern of giving. At the conclusion of each program, CCS offers parish leaders training on conducting annual renewals of these commitments. Permanent change in parishioner giving behavior is only possible through regular attention and communication. It takes some work, but as any “stewardship parish” will attest, the process becomes automatic and expected by parishioners after a few years.

As an additional benefit, conducting an increased offertory program will not impact your parish’s ability to conduct a capital campaign in the near future – in fact, the process may help get you closer to campaign readiness.

So, when a campaign seems out of reach, or maybe you just need another year before starting one, consider an increased offertory program.

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Boomers, born between 1946 and 1964, currently hold the largest share of US wealth and reflect 43% of total charitable giving— but that’s about to change. The Great Wealth Transfer is on the horizon, and it’s time for your nonprofit organization to start preparing for when assets will pass to the next donor generation, reshaping the philanthropic landscape.

Now Is the Time to Think About the next Donor Generation

Despite wealth concentration in older demographics, Millennials and Generation Z are the two largest in the US. As Boomers grow older, an anticipated $84.4 trillion in assets will transfer to Millennials and Generation Z through 2045, including $72.6 trillion going directly to Boomer heirs. Inevitably, nonprofits are already seeing this transfer reflected: between 2016 and 2022, the average Millennial household increased its annual giving by 40% (from $942 to $1,323), contrasting the decrease in Gen X’s (-4%) and Boomers’ annual giving (-12%) during this same period.

With this impending shift comes a pivotal moment for your nonprofit to adapt as new donors bring new perspectives and giving priorities. Longtime, reliable donors have different values than their children—even if wealth stays within a family, giving priorities and personal motivations may not. The organizations that have taken the time to invest in the younger generations in preparation for this great wealth transfer are seeing rewards and a strong pipeline for the future of their organization.

Understand the Next Donor Generation

With this transfer, most wealth will pass directly to the heirs of current donors. You can begin establishing yourself with your next donor generation by learning about the descendants of your current donor base and getting to know them as individuals with interests and values separate from their family name.

Philanthropic parents raise philanthropic children, and family foundations make up over half of all private foundations, often staying within the family for several generations. However, recent trends show a departure from this norm, with some family foundations transitioning management to non-family members. This shift underscores the importance of engaging with both current and future generations of donors.

Millennial and gen z giving motivations

Millennial and Gen Z donors are driven by a desire to create meaningful change in the world and support causes that align with their values while also expecting transparency, authenticity, and community engagement in their philanthropic endeavors.

millennials

Millennials, born between 1981 and 1996, are adaptive to technology but much less dependent on it than Generation Z. Millennials make up a large percentage of today’s workforce, balancing the demands of building a career, raising a family, and giving back to organizations they are most passionate about. Like Generation Z, Millennials are closest to organizations that directly reflect their values about current societal and economic issues. Millennials typically research a nonprofit or make a connection before making a gift.

Gen z

Generation Z (Gen Z) refers to those born between 1997 and 2012. Considered the most technologically advanced generation, the internet, social media, and smartphones are part of their everyday life. They have witnessed global issues ranging from economic downturns, domestic and international safety concerns, gender inequality, racial injustice, and climate change. Unsurprisingly, Gen Z cares about impact and wants others to know they are a part of specific causes, focusing more on public recognition.

where to find your next donor generation

The Great Wealth Transfer provides opportunities to discover new donors whose interests and values align with your organization in a way those of other generations did not, but where can you find them?

Young donors spend time online

Millennials and Gen Z donors have moved away from desktops in the last decade and are online, specifically on mobile devices. As the world becomes increasingly virtual, so does philanthropy. Even when responding to direct mail campaigns, which are still popular among nonprofits, Millennials and Gen Zs give online more often than their predecessors.

millennial and gen z donors crowdfund

The COVID-19 pandemic helped fuel the recent increase in online giving while also creating a significant shift toward crowdfunding, proven by the popularity of sites like GoFundMe and Kickstarter. These small-scale, collective aid efforts help cultivate young donors by introducing philanthropy and planting the seeds to one day become consistent donors. Crowdfunding, fueled by 24- to 35-year-olds, also allows individuals to directly support causes they care about, regardless of organization size or complexity.

millennial and gen z donors use social media and explore your website

Exploring Gen Z and Millennials’’ behavior on social media will help you understand what organizations young donors want to give to and how to market your nonprofit work to them. Nonprofits should leverage social media for outreach and invest in user-friendly online giving platforms, as a seamless online experience enhances donor engagement and retention, particularly among tech-savvy Millennials and Generation Z. Undertaking website optimization assessments can further enhance searchability, branding and design, user experience, security, and content, to name a few.

Consider the following:

How can my organization make charitable giving more accessible to young donors who may feel discouraged because they cannot give at high levels?
Is my organization active on many social media platforms and encouraging online giving?
Is my organization’s online giving platform easily accessible?

how to engage the next donor Generation

So, you know where to find young donors, have built out your website, and created an easy path for online donations… now what? The following three principles will help you engage Gen Z and Millennials.

demonstrate authenticity

Like those before, the next generation of donors has various interests and will give across sectors. Whether addressing climate change, education reform, healthcare support, or social justice advocacy, Millennials and Generation Z respond generously to causes aligning with their values. Nonprofits must demonstrate authenticity, emphasizing tangible outcomes to resonate with these donors.

be transparent

Transparency is paramount for younger donors accustomed to readily accessible information—public financial statements and annual reports are crucial in fostering trust and accountability. Whether through social media, email outreach to your current database, or an event celebrating your end-of-year impact, make sure people know that their donation, no matter how small or what type, supports your cause and not just your organization.

get donors involved

Allow up-and-coming donors to give to your organization beyond financial gifts. Millennials and Gen Zs can volunteer, act as social media ambassadors for your cause or fundraising events, peer-to-peer fundraise, attend events, or obtain corporate sponsorship through their employment.

how to retain the next generation of donors

Once you’ve found and engaged young donors, the next challenge is keeping them engaged. Here are some important tactics for ensuring donors stay committed to your nonprofit’s mission past their initial donation.

communicate effectively

When communicating with Millennials and Gen Zs, using multiple channels, particularly social media platforms like Instagram, TikTok, X, or Facebook is most effective.

Ensure emails, your website, and giving pages are all mobile-friendly.
Articulate the action step you want the recipient to take (e.g., raise awareness, attend an event, donate, volunteer, etc.).
Use images or video, when possible, for more interesting storytelling.

Because this next donor generation gives to the causes it cares about and wants to know it makes a difference with its gifts, being open and celebratory about what donations allow your organization to achieve is paramount. Share success stories early and often with donors, including quotes or other personalized features.

involve the next donor generation on your board

Another key strategy for young donor retention is involving them on your nonprofit’s board. Here, we’ll delve into two approaches to engage the next generation through board activity, each with its own benefits for building lasting connections with up-and-coming supporters.

create a junior board

Unfortunately, a shift in values is not the only difference between generations, as Millennials and Generation Z are more likely to experience affordability challenges, such as delayed homeownership. Millennials are also the generation most likely to live paycheck to paycheck. Despite this lack of resources, Millennials and Generation Z are the most likely to volunteer their time with organizations they care about.

Junior boards effectively involve young donors, create interest and investment in your organization’s goals, and encourage other young donors to give. People like to see themselves represented—an organization showing genuine interest in the next generation’s opinions will attract more young people.

create a more inclusive board

If your nonprofit doesn’t have a junior board, consider ways to make your board more inclusive for young people by examining why there aren’t Millennials and Generation Z in organizational leadership. Explore ways to break down financial barriers to involvement, such as sliding scale contributions, non-traditional give-and-get policies, and mentorship or sponsorship programs. Include younger generations now to create lasting relationships.

the next donor Generation Is changing philanthropy

You now have the resources to cultivate young donors before the Great Wealth Transfer. Get to know your donors and volunteers of all ages and explore new ways to connect on your shared values, beliefs, and unique purpose. The next donor generation is speaking up and wants to help solve the world’s most pressing issues, so focus as much on your nonprofit’s future philanthropists as you do on your traditional donor base. By actively engaging the next generation, your organization can harness the opportunities of the current and continued changes in the philanthropic landscape.

*This article is a refresh of “Engaging the Next Generation of Philanthropists” by Courtney Labetti, CFRE, CAP, Vice President; Kaleigh Wagner, Assistant Vice President; Alexander Fruin, Assistant Vice President

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Do you believe your donor database could reveal untapped major gift prospects but find it too challenging and time-consuming to dive further into major donor fundraising?

Fortunately, advances in technology and data analytics have created ways to streamline and maximize your efforts. Specifically, predictive AI and statistical modeling offer powerful tools to help nonprofits leverage their resources more effectively and achieve fundraising success. Just as for-profit businesses often use predictive analytics to grow revenue, nonprofit organizations can use it to improve fundraising results. At CCS Fundraising, we use predictive AI with our nonprofit client partners to identify new or unmanaged major gift prospects efficiently, methodically, and accurately.

What Is Predictive AI?

Predictive Artificial Intelligence (AI) uses statistical algorithms and machine learning techniques to analyze data and predict future outcomes. In major gifts fundraising, predictive AI can reveal the donors most likely to make a large gift based on their past giving behavior, demographic characteristics, wealth indicators, and other relevant factors.

How We Use Predictive AI to supercharge major donor fundraising

CCS has developed a multi-step process to assess donor potential in your database that, once completed, gives you a list of the most promising new major gift prospects.

A graphic showcasing a sample predictive modeling process.

Step 1: we use predictive statistical modeling

In essence, a predictive model describes your promising donors in statistical terms. The process starts by building a suite of predictive models predicting future donor behavior based on past tendencies, interests, and demographics. Using this information, the model finds constituents who look like those high-potential donors but aren’t yet. This statistical characterization is a formula to give each constituent in the database a numerical score, rating the prospect’s quality.

At CCS, the predictive models we develop for nonprofits incorporate diverse data elements from the donor database, encompassing contact details, donation records, event participation, volunteer engagement, and organization-specific data fields.

step 2: we wealth screen your top model scorers

The predictive model scores tell us which donors have an affinity for your nonprofit. Constituents who scored well are interested in your organization and will likely give you a gift. But it won’t tell us their financial ability to make a large donation.

A Venn Diagram showing how top prospects are at the intersection of Affinity (Prospect has inclination to give) and Ability (Prospect has capacity to give).

For this reason, the next step is wealth screening research on the constituents who scored well in modeling. We can estimate how much a constituent might donate by using external wealth screening vendors and then combine the wealth screening and modeling scores to isolate ideal major gift prospects between affinity and ability.

Step 3: we Remove the Assigned Constituents and Those Above a Certain Age

The process aims to identify new major gift prospects, so we remove constituents already assigned to a major gift officer’s portfolio. We also filter for age to ensure a solid list of prospects in a life stage where it makes sense to be cultivated for a major gift.

Step 4: we Use Model Scores, Wealth Screening Data, and Recent Giving to Generate the Final List

We have found that concise lists of compelling new major gift prospects are most beneficial for development teams. We create a more manageable list for your organization by adding extra filters towards the end of our process—like fine-tuning model score thresholds, gift potential, and recent donations.

What is the value of using predictive aI to find new major gift prospects?

CCS has seen a tremendous return on investment in predictive AI for our clients.

In a study of past clients who utilized CCS’s predictive AI services, the median organization’s “Top Prioritized Prospects”—those high-potential donors not yet assigned to a gift officer but recommended by CCS to be included—donated seven times more compared to all other donors.

How else can predictive AI be used in Major Donor fundraising and Beyond?

Predictive AI and statistical modeling can support development strategies and objectives such as:

Convert crisis donors to long-term donors.
Strategize engagement and outreach for planned giving prospects.
Develop acquisition, retention, and segmentation strategies for annual giving.
Build a pipeline of young alums most likely to be future major donors.
Prioritize grateful patient outreach.
Optimize major gift officer portfolios by adding new prospects and identifying prospects to remove from portfolios.

Leverage the Power of Predictive AI for Major Donor Fundraising

CCS has an expert Data Analytics team dedicated to helping nonprofits worldwide harness innovative techniques like statistical modeling and machine learning for more successful fundraising, including major donor fundraising. Our in-house data scientists use various analytical tools to develop customized, creative, and actionable fundraising strategies unique to each client’s needs. Discover our Services for more details on our Data Analytics offerings, or contact us today .

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Our independent school client partners increasingly—and now with greater urgency—ask us, “Can we raise money for endowment?”

Those who ask this question know without sufficient endowment savings or investment income operating dollars, they could be financially vulnerable or even face closure due to affordability challenges and budgetary constraints.

The question “Can we raise money for endowment?” reflects the widespread perception that these funds are harder than capital dollars to raise without the tangibility of campus facilities like classrooms, gymnasiums, or libraries. However, endowments have a greater long-term impact on programs and beneficiaries; independent schools reported a 9.2% return on investment in endowment assets in 2023.

Unsurprisingly, there’s a growing interest in and need to raise these funds. The following are tactics to focus on when sharing the power of endowment dollars at your independent school.

1. demonstrate the impact of your endowment by showing, not telling

Showing prospective donors how endowment gifts directly support your independent school’s students and faculty helps them understand their gift’s critical impact and proves that it doesn’t disappear into an obscure savings account but makes a real difference for your school. For example, to make the case for a financial aid endowment, consider highlighting students who would not otherwise be able to afford your tuition.

Similarly, you can make a strong case for a professional development endowment by sharing specific faculty work and travel examples. Consider hosting an open house for donors at the beginning of the school year where they can interact with faculty and learn about the experiences their gift enabled. The donor will feel a lasting sense of personal impact and a clear understanding that their gift creates a legacy of these life-changing moments.

2. recognize and steward donors

Named funding opportunities are an important strategy for countering the misconception that endowment gifts lack direct impact. Your school can recognize donors by name through opportunities, such as:

Faculty chairs
Student scholarships
Professional development funds
Programs

When a donor meets a student scholarship recipient or the faculty teaching chair, this powerful stewardship opportunity reflects an endowment gift’s profoundly personal and lasting effect while humanizing endowment giving—they create powerful stories of personal and professional enrichment for the donor while celebrating them as an inspiration to the rest of the school community.

These stewardship opportunities can also be significant for emerging philanthropists. Families building their wealth might establish a fund for a partial scholarship, hoping to grow it to a full scholarship over time. For families with multiple connections to a school, a family fund provides opportunities to cement a common bond and allows multiple members to participate meaningfully, regardless of capacity.

establish a bequest society

Establishing a bequest society is easy and provides a straightforward recognition and stewardship opportunity. A school can recognize donors in every issue of the school magazine, on a campus plaque, and through website profiles. Regularly featuring bequest society members in the school magazine and featuring them prominently on the website will tell compelling stories of those committed to making a profound and lasting impact on generations of students and faculty.

Considerations for small endowments

A word of caution—stewarding and recognizing minimal endowment funds is difficult. Small funds can be an administrative headache for the business office, and their returns are so small that recognition opportunities are limited. For example, a $10,000 endowed fund generates just $500 annually at a standard 5% draw. To avoid this, many schools have set minimums for establishing named endowed funds to ensure that the administrative costs are worthwhile—perhaps $50,000 for a faculty development fund, $500,000 for a partial scholarship, etc. A higher investment threshold also ensures that stewardship opportunities are more meaningful.

3. demystify the endowment

Independent schools may struggle to attract endowment giving if they assume their donors and school communities understand what endowments are or how they’re used. Few donors understand the ins and outs of school financial management—even trustees on a school’s finance committee might be surprisingly misinformed about an endowment’s role in the school’s revenue strategy. For example, donors may equate endowments with reserve funds, although endowed assets often have legally binding usage restrictions.

help donors understand endowments through strategic communications

Your independent school can demystify the endowment by sharing regular updates and examples of fund uses. For instance, a recurring feature in the school magazine could highlight a faculty chairholder and share the donor story behind the gift. You could also set and share a goal for long-term endowment growth to articulate the impact of the incremental gains that, over time, lead to a larger endowment. This becomes particularly important when your school is ready to show the human-scale impact of the endowment today and the potential impact of a properly sized endowment.

explain endowments in the context of school finance

Beyond defining endowment mechanics, it’s essential for your donors and school staff to clearly understand how it functions within the operating budget. Independent schools have limited revenue sources, typically defined by tuition, voluntary support (annual giving), and the draw on endowment income. Schools with little or no endowment income contributed to their operating budget put tremendous pressure on tuition as the primary revenue source. While many schools publish pie charts showing the revenue breakdown for tuition, annual fund contributions, and investment income, few schools take the extra step to explain the key role of each and, specifically, how a larger endowment and the subsequent endowment draw becomes critical in containing tuition growth.

Regular communication outlining the role of each revenue source creates important context and helps even those closest to your school (board members, insiders, and leadership) understand the need to raise endowment funds. Consider using an interview feature in one of your school’s publications, a website landing page, or a campaign salon event to help donors understand the important endowment metrics and their role in your school’s broader financial strategy.

You can make a strong case for your independent school’s endowment

Raising funds for your endowment is possible. Creating recognition and stewardship opportunities and demonstrating human-scale impact are critical steps to make it a rewarding gift opportunity. With thoughtful communication, your school can make endowment fundraising as tangible as fundraising for capital projects. Context matters—clearly communicating the endowment’s role in your school’s broader financial strategy helps build a culture of giving that benefits your school and your donors.

In today’s increasingly competitive fundraising environment, nonprofits must broaden and expand their revenue streams to remain sustainable. Implementing a wide range of revenue-generating initiatives strengthens your organization’s stability and cultivates resilience in navigating economic uncertainty. This article explores the key strategies and best practices that help fortify your nonprofit’s financial solvency.

Understand the Philanthropic and Economic Landscapes

It is helpful to first understand how economic realities shape philanthropy. The 2023 financial landscape was unstable, with significant fluctuations and challenges, as the S&P 500 experienced a sharp decline of 25.4%. This downturn mirrored a broader trend as disposable personal income also saw a dip of 7.5%. Finally, inflation rose to 8.0%, its highest rate in four decades. However, notable bright spots amid these economic headwinds included the GDP growing by 1.1%; concurrently, unemployment rates have dropped to some of the lowest in the past half-century.

Despite economic uncertainty, philanthropy maintained a steady growth trajectory. However, this was accompanied by an apparent decline in individual giving following the years of historic generosity associated with the COVID-19 pandemic. This leveling off in giving patterns suggests a need to recalibrate charitable contributions. Further, generational giving is shifting due to the great wealth transfer, with anticipated significant implications for the industry.

Against this backdrop, how might your nonprofit diversify its revenue? Here are some tips to get started.

Evaluate your donor pyramid from bottom to top

A visual representation of the prospect pyramid. The pyramid is divided into three sections, with Planned Gifts at the top (Donor Commitment), Major Gifts in the middle (Donor Growth), and Annual Fund at the bottom (Donor Contact). A golden outline highlights the top two sections.

Review your existing donor data to identify prospects for your various fundraising areas, with a focus on donor growth and commitment.

Ask donors with records limited to contact information for an annual fund gift.
Consider asking those who have the capacity and are showing an increase in giving annually for a major gift.
Consider those who have given for a length of time and are considered loyal donors as planned giving prospects.

Use Non-Linear Fundraising Growth to Your Advantage

Non-linear fundraising growth provides a dynamic paradigm for nonprofits, marked by a mix of more predictable and less predictable funding sources.

More predictable fundraising sources include gifts from:

alumni
grateful patients
annual funds
corporate partnerships

Less predictable funding streams often encompass larger, less frequent donations, such as:

transformational gifts
principal gifts
major gifts
planned gifts

A nonprofit’s success depends on maintaining steady growth while staying ready to capitalize on significant spikes in funding, which only happen occasionally. While more predictable avenues ensure a stable foundation, less predictable avenues can offer substantial leaps forward, although less frequently. Therefore, balancing these elements is essential for financial stability.

Increase your revenue with major and leadership gifts

Major Gift Activation is a collaborative effort across various stakeholders within a nonprofit.

Your Development Team Drives Major and Leadership Gifts

The development team plays a central role in this process, beginning with creating a comprehensive plan outlining objectives and strategies. Coordination with other departments, such as programs and finance, is crucial to ensure alignment and support for fundraising initiatives.

Within the development team, specific roles are identified and assigned, with individuals taking ownership of lead prospect activity, tracking progress, and reporting results. Additionally, the team supports and guides leaders in their development roles, facilitating their success in engaging potential donors.

Leverage Your Board and Volunteers to Propel Your Development Strategy

Board members and volunteer leaders are also integral to the process, contributing their awareness of the development strategy, providing approval for key staffing or budget changes, and advocating for the nonprofit’s mission. They can also be invaluable in growing a nonprofit’s donor pipeline. Their involvement in fundraising activities, tailored to their interests, skills, and networks, further enhances major gift activation success.

Engage Your External Partners in Fundraising Messaging

Beyond these internal stakeholders, external partnerships are also vital, as these can provide input on messaging, help gain permission for story or picture sharing, and give insights into the key community leaders and prospects shaping the overall major gift strategy.

diversify your revenue with Gift Planning

A planned gift is an anticipated or deferred contribution of cash or other assets strategically made within the context of a donor’s broader financial, tax, or estate planning objectives. These gifts can take various forms and may be facilitated through various financial vehicles.

Gift planning is a good decision for donors for several reasons:

Most wealth is not typically held in cash.
Individuals are often more inclined to donate from irregular or unearned sources of income, such as appreciated assets, rather than from regular earnings.
The rising popularity of donor advised funds underscores the importance of strategic gift planning in modern philanthropy.
Planned gifts offer various tax incentives.
Bequests are ideal for individuals with substantial estates (valued over $13.6 million in 2024), as such estates are subject to federal taxes; however, bequests in cash or other assets, such as real estate, vehicles, or stocks, can be deducted from the estate’s total value, consequently mitigating federal estate taxes for the donor’s beneficiaries.
Charitable Remainder Trusts (CRT) are tax-exempt and reduce a donor’s taxable income.
For real estate gifts, donors acquire an income tax deduction equivalent to the property’s value while evading capital gains taxes.
In certain instances, donors aged 70 and a half or older have the option to contribute Qualified Charitable Distributions (QCDs) from their IRAs, enabling them to make tax-free donations while fulfilling their Required Minimum Distribution (RMD) obligations (note that these regulations change frequently).

Factors Contributing to Increased Gift Planning

Several factors contribute to gift planning’s growing prevalence, including the ongoing wealth transfer, the pandemic’s transformative effects on charitable giving, increasing sophistication among nonprofits and donors in navigating philanthropic strategies, and an enhanced opportunity for cultivating a culture prioritizing thoughtful and impactful gift planning initiatives.

Boost your major gifts with Capital Campaigns

A capital campaign is a pivotal strategy to enhance major gift fundraising through organization, urgency, and focus. Campaigns offer a structured approach to achieving strategic priorities while catalyzing fundraising efforts and elevating a principal gift portfolio. Further, they are a chance to strengthen and expand donor relationships and cultivate a more robust prospect pool while also developing a stronger board and volunteer leadership base. Additionally, campaigns raise awareness and elevate the organization’s profile within the community and region, further strengthening its impact and reach.

Remaining Agile will help you Increase and Diversify your nonprofit’s Revenue

Adopting strategies to boost revenue is essential to ensure your nonprofit’s long-term growth, financial strength, and flexibility in a changing environment. Whether building stronger donor connections, further utilizing technology, or forming new partnerships, the path to financial stability involves constant innovation aligned with your organization’s goals. By applying these approaches to increase revenue, your nonprofit can thrive and increase its ability to make a real impact.

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