The Evolution of Charity Fundraising

Most charities don’t have the time to look back and see the differences in the “Now & Then” of fundraising.  But like the iconic quote about insanity “Repeating the same thing over and over expecting the same result", charities must learn and that they must evolve.

Understanding the history of fundraising is important to those of us who enjoy fundraising success.  Fundraising has truly evolved and knowing and appreciating the evolution has the ability to lead us toward success.

Prior to the “Great Recession” which is nearly equal to the “Great Depression”, money was everywhere.  This was the time that companies and wealthy individuals were utilizing charities for tax shelters.  Sponsorship and large financial donations were not that hard to find which created enormous and powerful charities.

However, when the Recession hit…it hit charities just as hard as the businesses across the United States.  Discretional spending by donors shut completely off with businesses who normally donated now having to stop donating in order to keep their lights on.  Charities needed to begin to be creative in regard to their fundraising efforts. 

Unfortunately, the successful charities across the U.S. needed to become “Dancing Monkey’s” due to major donors requiring more information about the charity and its mission before providing the funds through a substantial donation.  They needed to be able to show their impact via their mission, they need to be able to show their financial efficiency and host fantastic fundraising events.  During this time, various entities arose to assist with this, namely Charity Navigator who provides a “Star” rating in regard to the financially efficiency of charities.

During this time as well, the Association of Fundraising Professionals (AFP) was developed and began.  Through the AFP, charity professionals are provided with valuable information and a "Networking" group of other charities.  The successful charities began to seek out information and the means to become much more successful. 

Charities then sought after professionals whose sole focus was on fundraising – Charity Fund Raising Experts (CFRE).  Charity Fundraising evolved to understanding the economy, identifying donors and tactics to become much more successful.  Charities began to spend money on marketing via the various telecommunication platforms – TV, Radio, Magazines etc.  Branding became a big issue with some of the most powerful and well known Marketing companies getting involved.

The most significant negatives effecting charity fundraising came from this time, however, many Non Profits did not take note.  They did not study this evolution but continued to act in the same fashion.  They continued to seek donations as they were in the 1990’s.  Then, our current President Barack Obama and the IRS changed the rules for tax deductions through charitable donations.  This same ruling “Rocked” the Charity Fundraising Industry (the professionals not the charities themselves).  The new ruling says that donors are only allowed to claim 30% of the total donation.

Taking into account, especially the recession and the restrictions it set forth, Donors now need more than just the “Ask.”  The “Ask” means just simply asking for a donation.

When asked, businesses in the charities local area, would only be able to donate items which were not selling in their stores.  What most charities failed to realize is, the same businesses they are asking are also approached by 100’s of other charities in their area.  To see just how many charities are in your area, check out the website www.taxexemptworld.com.  Charities must understand that they are all fighting for the same dollar.  The community can only give so much while maintaining their lifestyles.  Businesses are worried about keeping their doors open and their lights on.

During the same time, charities who began to evolve, realized through their financial statements, that donations (financial & items donated for their events) were very low.  These charities studied ways to recapture the donations while also asking their supporters what was important to them.

This same tactic also transcended into marketing their charity in order to spur growth.  Everything tied together when they began to follow this trend.  The successful charities employed event planners, development executives and manufacturers.

Through these professionals, they studied the success of the items they were getting donated for their fundraising events.  They tracked the donations and realized through study, the reality of their effectiveness.  That is when I became involved in Charity Fundraising while involved in several Conservation charities. 

Charities identified various companies who manufactured items which had items which had high appeal to their charity fundraising event guests.  When they made the switch to having items which they had to purchase but the items had mass appeal, they regained success and grew based on it.  They also used these items to market their charity as well as the events became “Membership Machines.” 

Fundraising Success happens when charities step outside of their mission and realize the reality of fundraising.

BW Unlimited Charity Fundraising is a leader in North America in regard to Charity Fundraising.  Our experts constantly study Charity Fundraising trends across the United States – both Successful and failed.  BW Unlimited Charity Fundraising would love to assist your charity by understanding the evolution of fundraising while identifying a plan for success.  Contact us today at www.BWUnlimited.com or call us at 410-658-8808.