Half of Charities Expecting Drop in Donations in 2020 and Beyond

New Survey Looks at Fundraising Activities Ahead, Challenges of Working From Home

More than half of charitable organizations in the United States are expecting to raise less money in 2020 than they did in 2019, and an equal percentage believe the same will occur in 2021, according to the Association of Fundraising Professionals’ (AFP) Coronavirus Response Survey.

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More than 850 fundraisers in the U.S. participated in the survey distributed to all AFP members in May.

The impact of COVID-19 did not affect charities immediately. Asked about its impact in the first quarter of the year—January through March—respondents were evenly split. Overall, compared to the first quarter of 2019, 33% did not see any changes in fundraising totals, while 31% saw increases and 35% saw decreases.

However, when queried about the impact in the second quarter of the year (April through June), respondents answered less favorably. More than half of respondents—57%—expect to see decreases in giving. Only 25 percent expect an increase, while 18 percent believe giving to their charity will remain the same.

Fundraising in 2020 and 2021

Similar numbers are expected from respondents for the rest of 2020. Fifty-six percent of respondents expect to raise fewer funds in 2020 compared to 2019, while only 21% predict organizational funding will increase, and 23% believe fundraising totals will remain the same.

Most fundraisers expect to see some negative impact into 2021, with close to 72% anticipating that giving next year will continue to be lower than in a typical year. Approximately 16% believe giving will be about the same, while 12% think giving will increase in 2021.

“We expected to see a significant drop in giving as a result of COVID-19, and our data shows that it will be a difficult time for fundraising for 2020 and well into 2021,” said Mike Geiger, MBA, CPA, president and CEO of AFP. “However, it’s clear that at this point, giving continues as organizations are adjusting and continuing to hear from donors. In addition, the impact hasn’t been the same across all organizations—human service organizations are, by far, the most optimistic subsector, and larger charities seem to be doing a bit better as well.”

Some Charities Doing Better

Three out of 10 human service charities said they expect to raise more funds in 2020 than in 2019, six percentage points higher than any other subsector. Larger organizations also expect to do better with their fundraising. In general, organizations with budgets of less than $5 million were more pessimistic, and more likely to think they would raise fewer funds, compared to charities with budgets of $5 million or more.

“The coronavirus will significantly affect fundraising efforts for my organization, and most likely, we will miss our 2020 fundraising goal by tens of thousands of dollars,” said one respondent. Another reported that “Some giving will be up—individual donors, foundations, major gifts—and some down dramatically, like corporations and memberships. We are getting solid support right now, but fear donor fatigue will set in if we can't reopen and engage with donors and visitors soon.”

“There is one general rule that is the most important for charities to follow during difficult and challenging times,” said Geiger. “Organizations cannot afford to stop fundraising, and those charities that continue to raise funds—and even increase their fundraising—will do the best. We have to raise money and engage our donors with sensitivity, but the funding must continue in order to support our critically needed missions.”

Specific Types of Fundraising

Almost half of charities report increasing their fundraising activity now because of COVID-19, while 44% will keep their fundraising at normal levels throughout the year. Only 7% of organizations plan to decrease their fundraising.

When asked which types of fundraising they will focus on more in 2020, 82% of respondents selected activities related to donor retention and stewardship (making connections and creating relationships with donors) as the most popular option. Online and technology options were also popular, with 78% of respondents saying they would focus on social media, online and virtual events, and 75% selecting email as a priority.

Through the Coronavirus, Aid, Relief and Economic Security (CARES) Act, government grants have been a source of revenue for many charities. Seventy-four percent of respondents submitted a grant for funding through the CARES Act, and 66% successfully received funding through this legislation. The CARES Act also included a limited universal charitable deduction provision, and 44% are using the new deduction in their fundraising solicitations.

The cancellation of in-person fundraising events has posed a significant challenge for most charities. Nearly 64% have had to cancel at least one event, and 24% have canceled three or more events. At the same time, more than 50% have switched at least one in-person event to a virtual event, with 14% converting three or more events into online experiences.

One respondent noted: “We canceled all in-person donor events for the rest of 2020 and are working on virtual events. Only one event was a fundraiser; all other events were stewardship and celebration events only.” Another said that “Nothing has moved online yet. In-person events in March, April and May were canceled. Our big event for the fall is still an in-person at this time, but we are making a contingency plan for a virtual event just in case.”

Working From Home and Staff Impacts

Nine in 10 respondents indicated they are now working from home, with 45% percent their organization was “well prepared” for this shift and 38% believing they were “somewhat prepared.”

“The inability to arrange face-to-face meetings was a challenge, but everyone is in the same boat here, and donors were ready and willing to talk on the phone,” said one respondent. Another respondent expressed some frustration in working from home, noting that the major challenge was “ … trying to help my daughter with remote learning while supposedly working full time. And all the interruptions and distractions from family members and pets. I could work from home if I were home ALONE!”

The impact of COVID-19 has extended well beyond fundraising and affected staffing levels and activity. One in five organizations has been forced to lay off staff, and 2% of respondents have been personally laid off. In addition, 23% of charities have instituted furloughs, and 18% have cut staff pay.

Looking Ahead

Respondents have advice for other fundraisers and charities as they looked to the future, including:

• Be transparent and communicative. Now is not the time to pretend everything’s OK. Everyone is adjusting and adapting to this “surreality” we're in, so don't disregard that. More than ever we can relate to each other as humans, so authenticity and transparency will go a long way in cultivating and sustaining trust in our relationships.
   
• Be compassionate. Ask how your supporters are doing and deepen relationships. Be bold and go do work—those that can give, will. Keep asking for support.
   
• Stay in the know. Look at what other nonprofits are doing during this time. If fundraising is not an option, keep in touch with donors. Building relationships will be important going forward.
   
• Don't stop fundraising!  Don't cut your development team!  Tell your story in an uplifting and impactful way.
   
• Take care of yourself—set boundaries with others, especially if their expectations are unrealistic.
   
• Don't sacrifice best practices for impromptu fundraising activities suggested by well-meaning but misinformed colleagues. Remember that stewardship is the best step toward receiving the next gift. Don't abandon ethics; and express appreciation for every gift, regardless of the size.

“It’s encouraging that many of the fundraisers responding to this survey are prioritizing donor retention and stewardship,” said Martha H. Schumacher, CFRE, ACFRE, MInstF, chair of AFP. “That emphasis, along with outreach through social media, virtual events and email, represents a central, powerful theme: purposeful community building. The more effectively your organization’s community continues to be built, the greater likelihood of short- and long-term fundraising success.

“Since the outset of the coronavirus outbreak, it would have been easy to assume that we shouldn’t be contacting our donors. Yet the opposite has proven to be true: Donors want to hear from the organizations they trust. They want to know that the missions they love will continue to survive, and ultimately, thrive. In our critically important role as the link between mission and philanthropist, it would be irresponsible not to sustain, grow and evolve these essential relationships.”

For more information about the AFP Coronavirus Response Survey, please contact Khesia Taylor at khesia.taylor@afpglobal.org.