Fundraising Update

Welcome to Fundraising Update. This week, we look at how influencers are helping nonprofits raise money. Plus, we take a peek into the future of donor-advised funds.

I’m Jie Jenny Zou, fundraising reporter at the Chronicle of Philanthropy. This is my last week writing to you in this newsletter, as I am leaving the Chronicle. It’s been a pleasure sending you the newsletter over the past few months. If you have ideas, comments, or questions about this newsletter, please write Rasheeda Childress.

Thanks to our sponsor Kellogg School Center for Nonprofit Management for supporting Fundraising Update.

Nonprofits big and small are collaborating with social-media influencers to boost their fundraising — raising millions for charity while also building coveted connections with new donors, I reported this week. But organizations looking to harness the power of digital clout need to carefully weigh the risks and benefits, experts told the Chronicle.

Events on platforms like TikTok have been derailed by account suspensions, and concerns about an imminent ban of the app loom. There’s also the potential for reputational damage when creators go off script. Some of YouTube’s biggest stars — and fundraisers — are mired in controversy for their business practices, off-hand comments, or shocking stunts aimed at drawing viewers.

Wisconsin-based TikToker Mercury Stardust— who goes by the moniker the Trans Handy Ma’am— has garnered more than 2.6 million followers on the platform for her helpful repair and maintenance tutorials. In March 2022, she went live for 24 hours, raising more than $1 million for trans organizations like Point of Pride, which provides financial assistance for gender-affirming health care. The next year she and a fellow TikToker joined forces for another TikTok-A-Thon, raising $2 million.

But 2024’s fundraiser was a different story. “We got banned on TikTok Live the first hour and again and again,” she recalls. “We got mass reported by people; it was devastating.” The fundraiser faced at least a dozen bans on the platform due to what Point of Pride called “anti-trans brigading.” They ultimately raised more than $2 million, but fell short of an ambitious $4 million goal.

Illustration by Alan Nguyen for the Chronicle

Having a Plan B for when things go south is key, says Tory Martin, director of communications and strategic partnerships at the Johnson Center for Philanthropy. “The internet is a wild and frenetic place, and things can go wrong very quickly. Social-media memes can live forever.”

Martin recommends nonprofits ensure they can communicate directly with stakeholders in case of unpredictable platform snafus. One tip: Keep an email list or use an alternate platform to provide updates. Even more important, Martin says, is the influencer. “I would only personally choose an influencer I follow for a while and understand more about what their brand is and know how they typically react to things and how their audience works.”

For more tips on how to make the most of social media partnerships, read the full story.

— The minimum donor contribution for a new Silicon Valley start-up aimed at making donor-advised funds more accessible.

When advocates of donor-advised funds look to the future, they see something like this: Banks that offer customers DAFs along with checking and savings accounts. Employers that give DAFs to workers as a benefit not unlike a 401(k). And digital giving platforms that provide users with accounts to stash cash in pursuit of charitable goals, writes my colleague Drew Lindsay.

It’s not clear whether the industry can build such a future — in five years or 20 years or ever. But it is taking small steps with new low-cost offerings to attract more of the 60 million households that give to charity every year. The funds, which already have reshaped the culture of philanthropy, could change giving habits even more, to the chagrin of critics who worry that DAFs hurt nonprofits.

Today, DAFs are relatively rare — there are fewer than 2 million accounts — yet mighty, thanks to their collective $250 billion in assets, according to the National Philanthropic Trust. They are a giving vehicle that’s been embraced by the affluent. Donors to the Foundation for the Carolinas must make a contribution of at least $100,000 to open an account. At Fidelity Charitable, the nonprofit offshoot of the financial-services giant, funds average nearly $300,000 in assets, according to the organization’s latest tax filing.

To expand its market reach, the DAF industry is taking steps to make funds more accessible. Read the full story for more on what’s next for DAFs.

• The Great Nonprofit Downsizing. As Americans have faced higher prices at the checkout counter, so, too, have the country’s nonprofits, which are paying more for basic goods, salaries, and rents than they did five years ago, reports my colleague Sara Herschander.

  In 2023 — the last year for which there is publicly available data — the anti-hunger juggernaut Feeding America spent about $100 million on produce, over five times more than it spent in 2019. During that same period, Samaritan’s Purse spent 80 percent more on Bibles, St. Jude’s spent 30 percent more on pharmaceutical supplies, and Toys for Tots spent 59 percent more on toys. The Metropolitan Opera spent almost 80 percent more on production equipment, even as ticket sales tumbled by one-fifth and overall revenues declined.

  None of those increases can be attributed exclusively to inflation. There may be more hungry people to feed, more proselytizing to do, and more gifts to give than in years past — but they do reflect the compounding economic pressures that have left many nonprofits running on fumes, or dwindling reserves, as they enter 2025.

  That’s been the bleak calculus for many of the country’s charities, which have experienced a wave of program cuts, layoffs, and even closures as they face a triple economic threat — inflation driving up expenses, pandemic relief funds drying up, and donations falling. Now, with even more uncertainty due in 2025, nonprofit employees are nervously awaiting what’s next for themselves and the people who need them most.

  For more on how nonprofits are grappling with a tightening economy, read the full story.
  

Jeff and Gail Yabuki gave $1 million to expand Project Healthy Minds, a mental health technology organization that helps people connect with therapists, support groups, crisis hotlines and other mental health services. The nonprofit also does advocacy work around destigmatizing mental illness.

Jeff Yabuki is CEO of InvestCloud, a fintech company, and chairman of Motive Partners, a private equity firm in New York. He and his wife, Gail, have supported several mental health initiatives and been outspoken about Jeff ’s much-beloved late brother, Craig Yabuki, who struggled with mental illness for many years.

For other notable gifts this week, read my colleagueMaria 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.

A Dozen Ways to Create Events Donors Love — Without Spending a Fortune. Experts share 12 tips to help you adapt your event strategy to the current climate.

5 Conservative Proposals That Could Reshape Philanthropy — and How to Prepare (Opinion). Republican lawmakers are committed to nonprofit reform in 2025.

A Surprise $10 Million Donation Helped Goodwill Nab a Bay Area Steal. Goodwill of Silicon Valley purchased an eight-story building in San Jose thanks to a surprise gift from Amazon co-founder MacKenzie Scott. The nonprofit reaped the benefits of a cratering commercial real estate market, paying just $85 per square foot for the space — a 78 percent discount from its 2012 sales price.

Several other nonprofits have brokered similar deals in the pricey Bay Area, where rents have historically been among the highest in the country. Scott’s $10 million gift was unrestricted, allowing Goodwill to move quickly on the property. It was the single largest gift in the organization’s nearly century-long history. (The Real Deal)