2023 was another tough year in the nonprofit industry, especially for those who do not have an endowment. Although all the numbers aren’t in yet, it’s on track to be on par with 2022 — perhaps worse. Nonprofits are struggling. And what’s even more concerning is that this seems to be part of a larger downward trend.
Despite an initial giving boost triggered by the COVID-19 pandemic in 2020, the numbers have been steadily dropping ever since. Let’s face the facts: As the stock market flails, taxes go up, and uncertainty grips the globe, folks just aren’t as comfortable opening their wallets. History backs us up.
A few gloomy points to consider:
- Giving Tuesday donors dropped off by about 10 percent in 2023 (although total donations were up slightly).
- A Chronicle of Philanthropy survey last year found fundraisers were stressed over inflation, lack of staff, and declining donors.
- Nonprofits are still struggling to recover from 2022’s 10.5 percent drop in donations.
- Charity Navigator said year-to-date donations were down 20-30 percent in 2023!
- Only about 1 percent of all nonprofits utilize a planned giving program.
Add it all up, and it paints a grim picture for many nonprofits’ futures—except for that 1 percent. That’s because nonprofits that incorporate a planned giving program (even a basic, bequests-only plan) have a built-in lifeboat for when the going gets rough.
Procrastination is Your Enemy
Every year, we hear the same excuses:
- We don’t have the time.
- We don’t have the money.
- We’re not yet ready to start.
Here’s why this kind of reasoning falls flat—and why I like to call this kind of thinking “deferring the deferred.”
- Planned giving does not take much time. If your staff put in just 1 hour a week, it would be enough to start and maintain a basic, bequests-only program. And since bequests make up the majority of planned gifts, you’d be getting the maximum return on your investment of time. When a nonprofit says it does not have time for planned giving, what that really means is the staff does not want to create the time. And that’s a large part of the reason so many nonprofits are struggling. We see NPOs more focused on getting the perfect silverware for their next gala than they are on maintaining and expanding their sources of funding.
- The best time to start a planned giving program was 25 years ago. The next best time is now. The longer you wait, the longer it takes for gifts to start rolling in, and the more gifts you miss out on. By keeping planned giving on the back burner (deferring the deferred), you’re hurting your bottom line, not helping it.
Numbers Don’t Lie
Report after report and survey after survey all say the same thing: Planned gifts are significantly larger than annual gifts (by at least 200 percent!), and those who make planned gifts also increase their annual giving—in many cases by as much as 75 percent.
In other words, any nonprofit that is serious about its mission should be pursuing planned gifts. The numbers don’t lie, and those numbers consistently show us that planned giving works.
Make planned giving your new year’s resolution. Read on LinkedIn as to why you should join the top 1 percent that “get it” and are growing their nonprofits along with their careers. The financial seas are rough right now. Wouldn’t you feel safer with a lifeboat?