How to fight inflation issues with innovative fundraising tools
This blog was contributed by DonorPerfect as part of an ongoing partnership with ONN.
With charity demand and inflation both on the rise in Canada, while donations steadily decrease, the task of creating an engaging, yet budget-conscious nonprofit strategy continues to be a puzzling one for Canadian fundraisers. In response, nonprofit experts are exploring the technological advancement of strategic charitable giving as organizations recover from the financial strains of the last few years.
Canada is seeing higher-than-normal inflation
The state of the Canadian economy has made a noticeable shift since 2019. Last year, it was reported that the cost of living was increasing at its fastest pace in 40 years, since the early 80s. In general, Canadians are seeing higher prices for food, shelter, health, energy, and transportation, in that descending order.
The Union of Public Employees offers three causes for the recent uptick in inflation:
- global supply chain disruptions;
- a temporary increase in pent-up demand for items that weren’t available during the pandemic; and
- widespread droughts affecting agriculture output.
Inflation is impacting the charity sector, especially smaller organizations
A 2023 report surveying 3,000 Canadian charities shows that high inflation caused by the pandemic has intensified long-standing threats to the charitable sector:
- increased service delivery costs;
- increased demand for services; and
- increased staff salaries.
Specifically, small organizations (less than $500k in annual revenue) did not adapt to the financial strains of the pandemic as easily as larger ones. Small nonprofits are showing a higher decrease in profit margin since 2019 (8% compared to 4% for larger nonprofits).
“Smaller organizations may have relied more on in-person events – this is something I see a lot of in my consulting business,” says Peggy Killeen, CFRE, Senior Consultant for PGgrowth. “Diversification of revenue streams can be a sophisticated approach that takes more staff and resources but reaps more gains in the long term, and small organizations don’t have this luxury.”
3 Ways to Fight Inflation with Innovation
DonorPerfect Fundraising Software conducted a study of its Canadian clients to shed light on both their hardship and progress before, during, and after the pandemic. The study follows 750 organizations between 2019-2022, specifically looking at total gifts, average gift size, and median gift size across each year.
#1: Charity demand is increasing
With higher-than-normal inflation, it’s no wonder that Canadian charities are experiencing higher-than-normal demand to match. Both constituents and employees are in greater need of support.
Nearly half of Canadian charities report increased staff salaries due to inflation, but without an increase in funding, many have to cut expenses at a time when Canadians need them most. Inflation has impacted the cost of delivering services for 80% of Canadian charities, according to the 2023 Giving Report. More than half say they cannot meet the current levels of demand.
Innovation: Try implementing free tools to support your team
Not everything comes with a higher price in 2023. Smaller organizations without a technology budget are able to lean on free tools like Canva to design graphics and videos, QR codes to optimize direct mail efforts, and AI generators to automate fundraising content creation, to name a few.
These solutions have gained popularity since the pandemic because they allow charities to avoid outsourcing tasks to third parties and reduce the time it takes to complete fundraising operations.
#2: Fundraisers are quickly burning out
Over the last few years, average wage increases have fallen short of the increases in inflation. Employers are concerned about labor shortages, but stagnant wages aren’t attracting more workers. Times are especially hard for young workers, women over 55, and those without university degrees, the Union of Public Employees reports.
Canadian charities are highly concerned about staff burnout:
- More than half of charities say they have fewer volunteers than before the pandemic.
- More than half have the same number of paid staff working, despite higher demand.
Innovation: Try streamlining operations with a fundraising CRM
Despite how dismal the national giving statistics may seem, DonorPerfect research shows that Canadian charities who fundraise using DonorPerfect CRM and its many integrations have actually been able to increase their total dollars raised (by 15%), number of gifts (by 18%), and reactivated donors (by a significant 35%) since 2019. Not to mention, their average annual giving per donor increased across 2020, 2021, and 2022.
Organizations that are able to justify a low monthly subscription should look into fundraising software to relieve burnout and cut costs. Today’s comprehensive fundraising systems not only automate manual tasks like data entry, but they can also include website-building tools, email templates, code generators, AI research, and more depending on your specific needs.
To improve operational efficiency, your constituent relationship management system (CRM) should be easy to use on a mobile device so that your fundraising team can easily work together in remote circumstances and opportunities. For overall scalability, your CRM should be able to integrate with the latest automation tools as they are introduced to the sector.
#3: Giving is steadily declining
The cost of living is increasing at its quickest pace in decades. At the same time, donations are steadily declining. A third of Canadian charities surveyed in the 2023 Giving Report said their funding is below pre-pandemic levels. The percentage of Canadian tax filers claiming donations was 29% in 1990, 23% in 2010, and 18% in 2020.
Innovation: Try incorporating data analytics into your strategic plan
Pay attention to what your donors’ giving patterns are telling you. In 2022, did you see Giving Tuesday donors make additional gifts in December? Were you able to tell which communication method brought the best donor response?
A fundraising CRM can provide custom reports that answer these questions and custom dashboards that automatically keep you updated on your most important giving metrics over time. It can even provide predictive analytics to show which donors you should invest more time in. Create a strategic plan that encourages donors to help you meet a certain goal by donating online and interacting digitally, with tools like text-to-give, virtual auctions, and social media campaigns.
In a period of high inflation and high charitable demand, fundraisers clearly have to be careful when investing in technology and will benefit from software that not only provides access to innovative tools but also automates fundraising operations. This combination ensures both productivity to reduce costs and creativity to maximize giving.
DonorPerfect is a fundraising growth platform that enables nonprofits to raise more money and cultivate donor relationships by effectively automating administrative tasks and organizing constituent data.