By Todd Cohen
RESEARCH TRIANGLE PARK, N.C. — Sweeping changes in the makeup, interests and habits of the U.S. population are transforming philanthropy and charitable fundraising, and nonprofits that do not adapt themselves to those changes face tough times.
Fundraising consultant Judith Nichols delivered that message to over 800 nonprofit officials gathered in Research Triangle Park September 21 and 22 at the 12th annual conference of the N.C. Center for Nonprofits by fundraising consultant Judith Nichols.
Charitable giving in the U.S., which totaled over $260 billion in 2005, represents roughly 2 percent of gross domestic product, a share that has held roughly steady for over 40 years, Nichols says.
Yet the number of nonprofits has grown rapidly, to 1.7 million, and those organizations are competing for attention among roughly 3,000 marketing messages that the average U.S. consumer receives every day, Nichols says.
“Competition is very real and very strong,” she says.
And with a decline in trust in nonprofits, she says, they “may not be seen as experts.”
A big challenge for nonprofits is to engage different generations and ethnic groups in America as their staff, volunteers, board members and donors, Nichols says.
Americans are living longer, making decisions earlier in their lives about donating their assets to charity, and functioning as their own “consumer advocates,” she says.
And because of advances in technology such as email, she says, donors are deciding the pace and timing of their communications, as well as the ways in which they get their communications and make their gifts.
The 81 million Baby Boomers born between 1946 and 1964 are nearing retirement and looking for ways to become actively involved in the nonprofit sector, Nichols says, and Latinos and other ethnic groups are growing in size and represent expertise and wealth that nonprofits have failed to tap.
“We haven’t provided diverse populations a reason to move in our direction,” she says.
And because the donor base is “no longer homogenous,” she says, nonprofits need to work harder to understand who their donors are, and to make their communications with donors more personal and targeted.
“We need to do a better job articulating our programs,” she says.
While researchers have predicted that trillions of dollars will be transferred between generations over the next 50 years, with much of it going to charity, that transfer is taking place slowly, she says.
“Intergenerational transfer is pie in the sky,” she says, adding that few Americans will inherit more than $30,000.
Because a growing number of gifts are being made through planned giving, using deferred strategies and assets other than cash, she says, capital campaigns over the next five years “will be difficult.”
To be effective, she says, nonprofits must reposition their fundraising to be donor-driven, target niche audiences, communicate with donors individually, and focus on the post-World War II generation that now dominates society.