Fundraising Update

Welcome to Fundraising Update. This week, we share some expert advice on how to navigate conversations about hot-button issues. Plus, some new reports offer a pulse check on giving — and it doesn’t look great.

I’m Emily Haynes, senior reporter at the Chronicle of Philanthropy. If you have ideas, comments, or questions about this newsletter, please write me.

Thanks to our sponsor DonorPerfect for supporting Fundraising Update.

As a fundraiser, you talk to a variety of people — board members, donors, co-workers, the people you serve. Powder-keg topics routinely come up in conversation, particularly now, when election season division is mixed with intense Israel-Hamas debate and culture-war furor.

How do you navigate those conversations — for yourself and your organization? My colleague Rasheeda Childress gathered expert advice.

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If your conversation will touch on a controversial issue, set the stage, says Lara Schwartz, director of the American University Project on Civil Dialogue.

“The best thing we can do in advance of a conversation is make our shared intentions clear,” she says. If the goal is to learn about the other person’s view, say that. Conversation partners are likely to put up defenses or argue if they believe the goal is persuasion.

Shared goals can help if the conversation veers off track, says Katie Hyten, co-executive director of Essential Partners, a nonprofit that helps people build relationships across their differences. “lf you start to see things ratcheting up, you can say, ‘I just want to come back to that purpose.’”

When conversations get heated, the body’s defenses can take over. There’s a fight-or-flight response biologically when you’re attacked, says Sarah Cross, vice president of free speech and peace at the grant maker Stand Together.

“We’re not particularly capable psychologically of responding productively once we’re full of all those stress hormones,” she says. Pay attention to your body’s signals. “Are you sweating? Is your heart racing? Do you feel nervous? If so, the best thing to do might be to step away for a minute to take deep breaths in and out.”

If the other person is getting heated, create an off-ramp. “If you see that they’re no longer able to tap into their best selves, offer a break,” Hyten says. “Say, ‘Let’s go grab a cup of coffee,’ or ‘Let’s maybe go for a walk and come back to this in a few minutes.’”

Cross and Hyten note that it takes 20 minutes to reach equilibrium after fight-or-flight hormones kick in. If you don’t want a long break, lean into another innately human trait: curiosity.

“When things get tough, ask a question like, ‘I really want to understand what you’re saying. Could you tell me a little bit about what’s at the heart of this matter for you?’” Hyten says.

Also: It’s a good idea to think of one or two of these questions ahead of time. They should aim at deeper understanding, Cross adds. “There’s a way to ask questions that feel like an interrogation, and there’s a way to ask questions that feel like you’re really trying to get to know the other person.” Be willing to answer the same questions. “Even if they don’t ask, you can share your answer, too.”

For more expert advice on navigating conversations about hot-button issues, read Rasheeda’s full article.

Individuals gave 2.8 percent less to charity at year-end 2023 than they did during the same period in 2022, according to new data from the Fundraising Effectiveness Project. This marks the second year in a row that year-end giving — the lifeblood for most nonprofits — has decreased relative to the previous year.

The research collaborative analyzed data on contributions by 4.8 million donors to 8,103 nonprofits in 2023. The report includes both warning signs — falling donor participation — and bright spots — increased giving to newsworthy causes.

Donor participation fell across the board at year-end, with individuals who gave $500 or less driving the decline. This segment of donors represents 83.2 percent of all donors, but just 7.3 percent of all funds given.

Donors who gave $50,000 or more saw the steepest drop in participation — down 7.4 percent from last year-end. That’s significant because — although they represent just 0.3 percent of all donors — these donors contributed over half of all money given to charity at year-end.

One bright spot for fundraisers was donors’ strong turnout for international and foreign-affairs nonprofits, which brought in 51.2 percent more than they did in year-end 2022. Contributions to those organizations jumped in October, likely in response to the start of the war in Gaza.

Donor retention continued to be a challenge for nonprofits at year-end, but the rate of decline is flattening out from the 4.3 percent fall it took in 2021. The rate of donors who gave again in 2023 was down an estimated 2.5 percent from 2022.

Charities often struggle to convince donors who give to them for the first time to make a follow-up gift. In 2023, retention of these donors fell 7.5 percent from the previous year. Repeat donors, on the other hand, stayed flat — declining by just 1.1 percent.

Donors who gave more than seven gifts had the highest retention rates: 87.9 percent of these donors were retained in 2023. However, retention rates fell across all donors — those who gave just once through those who gave more than seven times — in 2023.

For more analysis from recent research — including a study on monthly giving — read the full article.

• Eclipse Bust, but Fundraising Knowledge Boom. Rasheeda Childress was at the Association of Fundraising Professionals’ ICON Conference, which was held in Toronto and ended yesterday afternoon. While she was disappointed there was too much cloud cover to see the solar eclipse Monday, she found plenty of good stuff to dig into during the sessions.

  Lilly Family School of Philanthropy faculty members Genevieve Shaker and Erik Daubert discussed research they’ve completed on how much funding comes from the wealthiest donors at a panel entitled “Realigning Fundraising for the ‘Dollars Up, Donors Down’ Era.” They sought to find out whether a widely-held belief — that 80 percent of money raised comes from 20 percent of donors — was true.

  The research, unveiled for the first time at the conference, used data from the Fundraising Effectiveness Project to examine gifts given between 2015 and 2022. They found that 20 percent of donors provided 93 percent of the dollars given during that period. Organizations with larger budgets were most reliant on big donors.

  Shaker told participants it’s important that nonprofits not take the wrong message from this research.

  “We don’t want it to come across as, ‘only pay attention to these people,’ because we don’t believe that is a long-term solution,” she said, emphasizing that fundraisers need to steward major donors at the same time they cultivate smaller gifts. “You’re going to have to be working that pipeline, even if the gifts and the money coming in don’t seem that significant right now.”

  For more insights from the conference, be sure to check out our coverage that will be coming soon.

James and Mary Carroll gave $12 million to Le Moyne College to back scholarships for students in need of financial assistance who enroll as humanities and social science majors, and named two professorships. The donation will also be used to support a visiting scholars program and the William J. Bosch, S.J. Teaching and Learning Center. The College of Arts and Sciences will be named for the couple.

James Carroll’s father died two months before he started college, and money was tight. He worked his way through Le Moyne, earning a bachelor’s degree in history and political science in 1966.

For other notable gifts this week, read my colleague Maria Di Mento’s Gifts Roundup column. To learn about other big donations, see our database of gifts of $1 million or more, which is updated regularly and has data going back to 2000.

10 Words and Phrases You Should Never Use — Philanthropy loves big words. Americans don’t. So why is the nonprofit world filled with philanthro-speak?

Readers Respond to Op-Ed Criticizing MacKenzie Scott for Ignoring Small Nonprofits (Opinion) — A call for the philanthropist to pay more attention to small nonprofits draws agreement, dissent.

The donor revolt that grabbed headlines last fall seems to have had a chilling effect on fundraising at Harvard and the Wharton School of Business, according to two new reports.

The Harvard Crimson reports that interim Harvard president Alan Garber acknowledged, in meetings with alumni last month, that contributions to the Ivy League university have fallen since the Israel-Hamas War began in October. A vocal group of donors objected to the university’s response to the October 7 Hamas attack and cut financial ties with Harvard. Some of those donors, such as hedge-fund manager Bill Ackman, previously had contributed millions to the university.

The University of Pennsylvania Wharton School of Business has also seen a drop in gifts, the Financial Times reports. “In any year, one [income source] will underperform. Now philanthropy is coming back. We weathered the storm,” says Wharton Dean Erika James. Both articles note that major donors’ habit of contributing through multiyear pledges has helped the institutions avoid significant fundraising shortfalls. (Harvard Crimson and Financial Times)