(photo from DepositPhotos)
By Todd Baylis
The first quarter of the year is well underway, and you are no doubt executing against fresh plans and campaigns. While you continue those initiatives, it’s important to take into account the emerging trends you might see over the course of this year and how those might cause strategies to evolve.
From artificial intelligence (AI) to donor-advised funds (DAFs) to connecting with younger donors, these trends could play a critical role in how you move the needle for your cause. As you look to grow and retain supporters, here are five trends to consider and watch for this year.
Increased Transparency With AI
AI usage is rapidly expanding in the nonprofit sector, but better transparency is needed to help supporters understand the role AI plays in nonprofit organizations. More than half of nonprofits, of which you might be one, now use AI-enabled technology in digital communications — surpassing adoption rates in the business to consumer sector. At the same time, however, almost one-third of U.S. donors say they would be less likely to donate to a nonprofit using AI.
More transparency around AI usage will be necessary for you to maintain trust with supporters. People are worried about issues of privacy and data protection, as well as the loss of the human touch. You will need to ensure authenticity in how you personalize communications to supporters in this environment where the human element is so significant. For instance, consider developing a statement or even adding insight around AI usage on your website. This will help show how AI is amplifying — not replacing — what your staff already does, and supporters can have peace of mind on both the privacy and personalization fronts.
Federal Changes, Push For More Funding Diversification
The charitable sector experienced quite a shakeup in January around the federal grant and loan freeze. While the order was rescinded and is sure to be litigated, there could still be other orders or regulatory shifts that affect your organization this year. Whether you rely more heavily on federal grants as a funding source or not, it is always a good time to assess all your funding streams, prioritizing diversified fundraising strategies that target multiple sources of support.
Data from a 2024 study shows that more than 75% of organizations struggle with funding. For this reason alone you should be regularly assessing your funding streams to help maintain financial stability through uncertainty. Donors have proven time and again that they will give in times of crisis. During the pandemic data show more than one-third of major donors upped the amounts they were giving to nonprofits and almost 60% of donors responded to appeals focused on the mission instead of the current emergency.
What this should tell you is that as you assess and pursue varying sources of funding, your communication to supporters must stay focused on your cause at large. Give clear insight into how donations holistically support your mission so donors feel more connected. This will help get them committed to more consistent donations, helping you diversify your funding streams.
Better Communication Around DAFs
The number of DAFs continues to increase, with a 2024 Giving USA report showing charitable assets in DAF accounts grew to $251.52 billion in 2023. Overall contributions to DAFs show a decline following the pandemic years, but the amounts held within them remain high, increasing just short of 10% in 2023 following the stock market rebound.
The continued growth of total assets held in DAFs begs for clearer communication from organizations like yours around how those funds are tracked. DAF donors remain consistent sources of funding for charities, so more transparency and accountability in how these funds are distributed will be crucial — and better communication is the first step.
One of the most significant challenges you are likely to face with DAFs is the opportunity to further engage DAF donors after receiving funds. Relationship building is a fundamental part of securing repeat supporters, so the ability to thank and engage DAF donors is a necessity to make this type of funding truly valuable in the long-term. To improve communication with DAF donors, you should look for technology that supports the tracking of DAFs and outbound communications to donors.
Influencer Marketing And Philanthropic Efforts
Influencer marketing is projected to grow at a compound annual growth rate (CAGR) of more than 23% during the next five years. If reaching more Millennial and Gen Z donors is a part of your 2025 strategies, as it should, it is crucial to reach them through the platforms and mediums they trust and prefer.
Younger generations are increasingly rallying around causes championed by their favorite celebrities or influencers — an opportunity you shouldn’t let pass you by this year. In fact, data shows that 43% of Gen Z and Millennials will donate to a nonprofit if a celebrity or influencer they admire has also donated there. This proves the power of influencer involvement as a way to spread awareness, bring in more supporters, and secure repeat donations with newer and younger donor demographic groups.
You have an opportunity to engage influencers in unique and impactful ways to amplify your mission. Influencer endorsements will be important in helping to increase your reach to grow your supporter base in a sustainable way.
Peer-to-Peer Fundraising Across Demos
Interest in peer-to-peer fundraising is growing quickly. The desire for community-driven support is opening more doors for you to not only connect with more people who believe in your cause but retain their support in a more long-term capacity.
There’s a generational interest in peer-to-peer fundraising, one that is rapidly rising with younger age demographics. Because of this, there’s both an opportunity and responsibility on you to incorporate more peer-to-peer initiatives into your fundraising strategies for this year and beyond. Not only is it a strong approach for connecting with younger donors, but it also puts the power of fundraising back into a community’s hands. It provides your supporters with a more proactive approach to help you move your mission, making them feel more involved in how you ultimately achieve positive outcomes.
What it comes down to is peer-to-peer fundraising approaches will play an important role this year in helping you build stronger, more lasting relationships with supporters. Your supporters want to feel connected to the causes they care about, and with this type of fundraising you can more directly offer them this connection.
New Innovation and Growth
Nonprofit organizations like yours are increasingly upleveling strategies to move missions forward. And it’s more important than ever that you foster positive, personalized, and authentic relationships with supporters. It’s exciting to see where the industry is going this year and what new trends and innovations might emerge along the way.
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Todd Baylis chief customer officer at giving platform Bloomerang.
