Donor activity nears early levels of pandemic
Nonprofits are reporting a rebound in their giving fortunes in early 2022, following a pullback in 2021 from 2020’s heightened generosity in the early months of the pandemic. That said, funding levels are not where they were during the early months of the pandemic, according to the 2022 Nonprofit Tech Trends Reporta white paper by San Jose, California-based management and financial services company Sage Intacct.
At the start of 2022, some 44% of respondents had increased their income from the level of the previous year, and a further 20% were reporting incomes equivalent to 2020, leaving just over a third with incomes lower than those declared. previously. These figures represent a marked turnaround from results in early 2021, when 58% reported a drop in income. That said, they fall short of 2020 levels, where only 20% of respondents reported declines in revenue.
Among those experiencing revenue growth, the jumps are likely to come from Uncle Sam. Just under 40% of respondents said government funding had increased in the most recent survey, compared to less than 20% in 2020. Foundation giving remained more or less at the same level between 2020 and 2022, while individual giving and corporate giving, both of which had fallen in 2021, rebounded almost to their first pandemic levels.
That’s not to say others haven’t done their part. Total donor bases and average donation size declined in 2021, following various conditions (lack of options for disposable income, perceived greater need) in 2020 that significantly inflated them. At the start of 2022, these two categories were also approaching their first pandemic levels from two years earlier.
Nonprofits make good use of this extra largesse. During the first part of 2022, 42% of respondents said their organizations’ participation in programs had increased, an increase of 10 percentage points from 2021, but still not at the level of the 51% reported at the start of 2020. The total number of programs had rebounded. 2021 lows as well.
The socially distant nature of nonprofit operations has caused these organizations to increasingly rely on social media for constituent relations. In 2020, 65% of respondents said they have a social media strategy. By the start of this year, that figure had risen to 71%, with a further 16% considering such strategies.
Although websites remain the primary means of sharing mission accomplishment, with more than eight in 10 nonprofits, three-quarters of these organizations used at least some form of social media strategy – a significantly higher number. higher than the 63% who relied on newsletters. or the 60% who use email.
Shifts in fortune have shaped how nonprofits tell their stories. In the most recent survey, 77% of respondents said their finance teams played a role in how organizations tell their impact story, up from 74% last year and 64% in 2020. As noted by the authors of the report, finances are becoming an increasingly important aspect. how an organization demonstrates mission impact.
Nonprofit managers are taking a sad look at a still largely uncertain fundraising channel: in-person events. Seven in 10 said uncertainty about their ability to organize such events was an external source of frustration – the main reason cited. Another 50% mentioned program interruptions, while 35% mentioned an increased demand for their services and 30% indicated the loss of a volunteer workforce.
Internal concerns seemed to be tied to frustrations over technology capabilities, especially those exacerbated by remote working. In 2022, the top challenge mentioned was a lack of process automation and organizational efficiency, followed by 35% mentioning manual and time-consuming reporting. Just over 20% cited lack of real-time visibility into metrics and performance, and a similar percentage cited inefficiencies and delays due to multiple, disparate systems.
Nonprofit managers have a seemingly clear picture of what they want in their next-step financial management systems. More than 70% are looking for the ability to automate financial reporting, while half would like to be able to manage multiple funds through fund accounting. A similar percentage would like the ability to integrate their financial management systems with other systems, and just over four in 10 would like the ability to automate tracking and reporting of results measures.
Sage Intacct based its findings on more than 900 nonprofit leaders’ responses to its survey. The majority of organizations (85%) responding to the survey were mid-size nonprofits in the United States with annual revenue of less than $24 million. Respondents represented a variety of nonprofit cause areas, including social services (22%), education (18%), community betterment (15%), healthcare (14%) and faith (12%). Respondents’ most common titles were executive director, chief financial officer, and general manager. More than 44% of respondents represented the C-suite level of their organization, up from 27% of respondents last year. Other survey participants identified themselves as controller, chief financial officer, chief accounting officer, and vice president of finance and administration.