August 21, 2015

Fundraising Trends and Counting Deck Chairs on the Titanic

On April 15th at 12:05am, the captain of the Titanic gave the order to uncover the lifeboats on the deck, which he knew would only carry half of the 2,227 passengers on the ship. Of all of the stories about the Titanic, none have ever talked about people counting the deck chairs in the final 2 hours it took the boat to sink. In the final moments, it was the lifeboats that were being counted, sadly a number that seemed less important than deck chairs in the initial planning.

The saying “rearranging deckchairs on the Titanic” speaks to the heart of this idea of spending time on a futile and pointless activity that has no bearing on the actual situation.

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What we choose to measure, and how frequently, is all too often a symptom of what is current—a reflection of our immediate needs. On Wall Street, companies sweat the quarterly earnings; car dealers stress in the final days to hit their sales goals; and in nonprofits it is frequently our annual donation deadlines.

Just like the number of lifeboat seats on the Titanic, impact metrics can often be forgotten until it’s too late. Lifeboats are undeniably important—a fact no one would dispute—but when it comes to day-to-day activity, deck chairs are what people see. They are easy to count and easy to manipulate.

6 Big Trends in Giving

Giving trends and donation tactics are like nonprofit deckchairs. Donations absolutely matter for the underlying program infrastructure of an organization, so it is important to consider the trends so you can prepare. The danger is when your organisation’s main outcome becomes donations over impact. This myopic focus may be a sign that the organization is headed toward an iceberg that could sink the ship. Consider:

  1. #GivingTuesday increased by 63% in 2014 over 2013 and will most likely gain a little over 50% in 2015. However, 2015 individual giving will still continue to make up 2% of U.S. GDP despite this giving tradition.
  2. The percentage of donations that are given online will increase slightly but still remain under 10% (6.7% in 2014 according to the Blackbaud Charitable Giving Report). This number still does not represent the web’s role in assisted conversions.
  3. Mobile will continue to convert at roughly the rate of 20% that of desktop. Focus ads and outreach to desktop when possible, while making sure your site is mobile responsive.
  4. The #1 reason “why people give” will be because someone asked them. Think about how you bring friends of donors into the fold.
  5. Crowdfunding for social causes increased 18.9% to $3 billion in 2014 (2015 Massolution). This will continue to increase at a rate of 20% in 2015, driving attention toward projects within organizations that inspire individuals to give.
  6. Billionaires will continue to give to educational institutions, and Malcolm Gladwell won’t be happy about it.

Malcolm Gladwell: "If billionaires don't step up, Harvard will be down to its last $30 billion."

The Biggest Trend: Effective altruism

We manage to what we measure, and the gut-check question to nonprofits is, are the metrics being measured and shared on a regular basis, be they deck chairs or lifeboats? Even if you are myopically focused on donations, know that Millennial donors are increasingly turning toward the idea of effective altruism:” a true accounting of how a dollar can have the greatest impact for the cause they care about, transparency that is becoming easier to gain access to with technology.

Echos of this shift will be subtle, but as the Millennial generation comes of significant giving age, nonprofits will be under an impact microscope. One recent example of this comes from GlobalGiving’s offer to better promote nonprofits that collect and use constituent survey data to improve their work. “We want to accelerate innovation but also greater effectiveness, ” says GlobalGiving co-founder Mari Kuraishi in response to why they are adding this new feature for nonprofits. We’re also seeing organizations get out in front of this trend by building transparency into their processes—just take a look at the “Where the Money Goes” section on the homepage of National Stroke Association’s site to see what we mean.

Organizations like EffectiveAltruism.org are championing the spread of the idea, pushing people to rethink giving and promoting works like “Doing Good Better” by William MacAskill. GiveWell has taken the idea of effective altruism and converted it into a methodology they use to rank top charities for various causes.

Finally, the larger trends can also be see in Google Trends that show interest for the topic based on searches in the US.

Effective altruism chart

In anticipation of this trend, we took some time to create an impact starter guide to help nonprofits refine how they think about what is being measured online and how it relates to impact. It took a matter of hours to sink the Titanic, but our video resource is less than 10 minutes and just might help you avoid an iceberg.

George Weiner
George is the Founder and CEO of WholeWhale.com, and an adjunct professor at NYIT. Prior to WholeWhale.com, George was the CTO of DoSomething.org. Under his leadership, the organization became an innovator in social media, mobile technologies and social cause. During his 7 years at DoSomething.org, he oversaw the complete overhaul of the site twice (winning a Webby Award and nominations), helping to build a community of over 1.5 million young people taking action. Internally, George built a 10 person engineering team including mobile, social, and Drupal developers in NYC. Other stuff: America’s Charities Board Member, Writer Huffingtonpost Impact/Technology, Founder CTOs For Good, Coach NYRR running class & City Sports for Kids
Interest Categories: Fundraising
Tags: Evaluation, Fundraising Management, metrics