Perhaps hard to believe, but here we are at the one-year mark of the COVID-19 pandemic. And, what a year it’s been! Thankfully, this one-year anniversary is coming at a time when the ‘light at the end of the tunnel’ is starting to glow brighter.
While it’s safe to say we aren’t out of the woods yet, we are (hopefully!) moving ever closer to the ‘exit’ and are starting to hear some really positive news about the future. There are predictions of a significant consumer rebound and a bounce back in leisure travel as the pandemic comes to an end. We’re also hearing that Canadians are holding unprecedented levels of savings, and numerous measures of consumer confidence indicate that our itch to spend is greater today than at any time since 2018. All of this adds credibility to the theory that, just like at the end of the 1918 pandemic, we are heading towards another ‘Roaring Twenties’ — a time of significant economic growth, technological progress, widespread prosperity, and social, artistic, and cultural dynamism.
But what about the charitable sector? What will this period of growth and prosperity mean for charities in general and for fundraising in particular? How do we prepare to be ready to take full advantage of it? What should we be doing today, tomorrow and in the weeks and months to come?
In other words…
Understandably, we’ve all been in a bit of a ‘scramble mode’ for the past year, shifting, adapting and yes ‘pivoting’ to respond to what was coming at us. And while maintaining flexibility and adaptability is important, ‘scrambling’ is not a healthy or sustainable way to operate. Acknowledging that the successful rollout of vaccines in Canada and globally along with an ability to manage variants are key factors to beginning our economic recovery, I do think it’s safe to say that, barring any major catastrophes, 2021 should be a year of transition during which we start to shape our futures and not just scramble through the present.
Building on our report The Big Rethink, we’ve been turning our attention to the particular nuances of being ready for that post-pandemic future given where we are today. While it goes without saying that definitive predictions are impossible, we believe we can directionally see where things are going and provide some ‘odds-on’ guidance about where to focus and build so that organizations can emerge strong and ready to grow.
Setting the context
Let’s start with a closer look at some of the good news that is shaping our broader context…the most obvious being that it’s not a year ago. Not only do we have numerous vaccines whose rollout is starting to gain momentum, we’ve also managed to figure out how to adapt our operations to deal with the current circumstances and continue to drive forward and raise money.
The second piece of good news is that while there does continue to be some uncertainty, we can take comfort in the knowledge that the pandemic has largely done what the experts predicted it would. We had the first wave in the spring of last year and a second wave in the fall and winter. And while there is much work yet to be done, we are being told that by summer and fall of this year, a good proportion of the population will be vaccinated and that things will start to reset to a greater degree of normalcy.
When it comes to the economy, there’s no denying it’s been rough, but the signs here are also optimistic with recovery expected to be stronger and faster than originally predicted. Slow and tepid growth was always forecast for the first quarter of 2021, but the economy is expected to pick up steam in the second quarter and be humming by the third. Looking out longer, the Conference Board of Canada recently released its two-year economic outlook, which forecasts that real gross domestic product (GDP) will grow 5.3 per cent in 2021 and 3.5 per cent in 2022 respectively.
Having said that, the economic recovery is expected to be a tale of two realities. On the one hand, those who already ‘had’ going into the pandemic now have even more. As I write this, stock markets are sitting at record high levels and it is estimated that Canadians amassed close to $200 billion in savings in 2020. On the other hand, employment rates are at levels not seen since the great depression, with the expectation that we won’t see a return to pre-pandemic employment for several years. Given that we were seeing an increased reliance on wealthier Canadians for charitable giving even before the pandemic, this dual reality means that reliance to be maintained and likely grow in the months and years to come.
Impact on fundraising
We’re often asked by clients and others, what are you seeing? What are others doing to respond to the pandemic?
I’ll start with fundraising results…and the best way to characterize those would be to say it’s been a mixed bag. According to Imagine Canada’s most recent Sector Monitor Survey, it’s about a 50-50 split. “Fifty-five per cent of charities told us that their revenues were down in 2020 while 45% reported that they were either flat or grew slightly. When it comes to source of revenue, the pandemic has had the biggest impact on event-based fundraising, but other sources have also been significantly affected with 75% of respondents reporting that at least one revenue source had seen decline,” says Bruce MacDonald, President and CEO of Imagine Canada. Looking ahead, the same survey indicated that charities reporting previous declines in any given area are more likely to predict future declines in revenue. Anecdotally, we’re hearing from clients that they are taking a cautious approach to revenue targets for 2021, expecting it will take time before their fundraising programs are fully back up to speed.
Having said that, we do know that Canadians have not stopped giving. Canada Helps announced that it processed $480,295,283 in online donations in 2020, an increase of 116% over 2019. Gifts were received from 1.1 million donors with an average donation of $435.86. And, according to our tracking of major gifts in Canada (gifts of $100,000 and more), KCI’s Research Team has calculated that close to 650 gifts of this size were made in 2020 totalling close to $1.06 billion.
The experience of many charities reflects this continued generosity of Canadians, although not surprisingly a good number that saw growth are involved directly in the response to COVID-19. Centraide Montreal raised $60 million for the first time its history in 2020 and attracted 8,000 new donors. The annual fund at the YMCA Greater Toronto had one of its best years ever and report good success in converting many members to donors. And the Salvation Army’s Red Shield Appeal, its national annual fundraising program, reached several milestones in 2020. “For the first time in our 137-year history, the Red Shield Appeal raised more than $50 million,” says Lt-Colonel John Murray, the Army’s Secretary of Communications. “And we also saw unprecedented donor acquisition results, with gifts from approximately 75,000 new donors from across the country.”
Beyond fundraising results, we’re observing that the pandemic is having some additional effects on philanthropy in Canada.
1) Back to basics and a focus on mission. The pandemic has stripped away much of the ‘social’ aspect of our fundraising activities. Gone are the coffees, lunches, cocktail parties and galas, and in the absence of these ways to engage, charities have found that their reasons to connect with stakeholders have revolved primarily around their missions and what they exist to do. “Last year we really focused on reinforcing our position and brand as an expert in the health and well-being of our community,’ says Yannick Elliott, Vice President Resource Development at Centraide Montreal. “For instance, we set up multiple meetings with a number of our corporate partners throughout last year to share our insight into what we are seeing on the ground in our community, what we are doing about it, how it affects them and how they can help.”
2) Big leap forward on digitization – We’ve been saying for a while that charities needed to put a focus on growing digital capacity, and the pandemic forced that transformation overnight. We now know how to do zoom solicitations, online galas, virtual townhalls among a variety of other activities and, as such, have not only significantly upped our skills and capacity but have discovered how useful digital strategies can be in doing our work and expanding our reach. The transformation to digital has also had impact on program delivery. Susan McIsaac, CEO of Right to Play International says that when it came to delivering their programming around the world “we had no choice but to develop our digital platform and the pandemic forced us to test all different channels in its delivery. It’s turned out to be a huge leapfrog opportunity and thanks to all this innovation, we’ve come out of it much further ahead than we would have otherwise.”
3) Maintaining easier than building new – One consequence of the move to digital is that it’s been far easier to maintain existing relationships than to grow and develop new ones, something that is particularly true when the introduction is reliant on volunteers. “We found that a good number of our capital campaign volunteers struggled with making the transition to virtual engagement with the prospects they were introducing to us,” says Wendy McDowall, Chief Development Officer of the YMCA Greater Toronto. “And even among those who did make the shift, they tended to be most comfortable with those they knew really well.” As such, fundraisers are now grappling with how to sustain both donor and committee work in a virtual mode in the short term while considering how to better utilize digital for this engagement in the longer term.
4) Continuation of campaigns and campaign fundraising – In the early stages of the pandemic, many were questioning whether to put their campaigns on hold. The vast majority determined this was not the right strategy, in large part because they discovered donors were still willing to engage. But campaigns did see adjustments, whether to short term fundraising targets, priorities, timelines or planned activities. And they will continue to look different. Given the predicted uneven economic recovery, campaign success will require an even greater focus and reliance on major gifts. We should also expect longer timelines and that short-term success will be highly dependent on the status of your pipeline and the number of prospects who are ready to give, as new relationships may take time to build.
“The future is not a gift. It is an achievement.”
While interesting to look back at what we’ve been seeing, what’s more important is to talk about ‘where to from here’. And this quote from Robert Kennedy feels like a good way to frame our thinking on that. The future, and your success in it, is neither a gift nor is it a given…but rather will be driven by what you DO today, tomorrow and over the critical upcoming weeks and months.
“We often hear about the bifurcation of the sector when it comes to fundraising success, with larger, big budget charities seeing growth and smaller charities struggling to find market share,” notes Ken Mayhew, President & CEO of the William Osler Health System Foundation. “In this moment of profound global change and reflection, I’m not sure it’s going to be so much a question of ‘big’ and ‘small’, but rather one of ‘proactive’ and ‘reactive’. Charities that proactively think about their futures will emerge more relevant and compelling, thereby putting themselves on a path for growth. I worry that those choosing to wait and react may be the ones that will struggle.”
So, the most overarching piece of advice is not let this time go to waste. Now is a the time to do both strategic and fundraising planning and get yourself ‘in line’ with your donors. It’s time to shape your vision for the future and to share it with your community. This crisis has changed the context for what organizations do and be prepared that stakeholders are soon, if not already, begin t to ask questions about what you’re doing and where you’re going. Why will you be relevant? Where are you headed? How will you do it?
The other reason not to waste this time is because charities and philanthropy are currently enjoying a ‘once in a generation’ level of mindshare. The pandemic has shone a spotlight on our sector and our work and contributions in a way that, frankly, we could have only dreamed of in pre-pandemic times. In other words, it’s helped to make our case for us, something that provides an opportunity like no other. Take full advantage of this period when we have the attention of Canadians to make the case for why you’re important and what your plans are. We’re still in a bit of a ‘stuck in the elevator’ moment with our donors and stakeholders at the moment, which is something that won’t last forever.
Here are some other thoughts on what to do and think about over the next 6-12 months.
1) Keep talking…and keep asking. While this may sound obvious, if you feel any reluctance (either personally or on the part of anyone in the organization), don’t. Donors are absolutely still willing to engage and keen to give…and in fact, are expecting to hear from the organizations they support. “In our conversations with donors, we’ve found that they are delighted to hear what Saint Mary’s University is doing to shape its future” says Erin Sargeant Greenwood, Vice President Advancement. “They are responding favourably to our outreach activities and are pleased to hear about our ambitions and strategic direction and how they can help us.” So, don’t be reluctant to take your case out to your donors and ask them for their support.
2) Develop a retention strategy. The best future prospect has always been one who has already given. So, whether you are a charity that has seen an influx of new ‘crisis response’ donors or you find yourself needing to bring back donors who have lapsed during the pandemic, organizations should be making donor retention efforts a priority. And those efforts need not be complex. When asked what how the Salvation Army plans to convert some of those 75,000 new donors to ongoing supporters, Lt.-Colonel Murray’s answer was simple – stewardship and accountability. “We will be stepping up our stewardship efforts and activities across the country to ensure that we are communicating with our donors, both of the impact and difference that has been made through their generous contributions, as well as to continue to engage them in our work and activities.”
3) Grow your relationship-based fundraising capacity – Even pre-pandemic, we had begun to see a significant shifting to Canadian donors making larger gifts. An analysis by our Research Team of tax receipted giving by Canadians between 2017 and 2019 confirmed that the only category of donors seeing growth were those giving $5,000 or more (See pop out box below, based on taxfiler data released by Statistics Canada, March 2021). The anticipated K-shaped economic recovery is only expected to amplify this trend. Transforming your fundraising programs from those that focus on transactional giving to those focused on relationship-based giving like mid-level and major gifts will be key to success. To do that requires a variety of changes, including shifting mindsets, honing the case for support, creating engagement opportunities among others. For some organizations, this may mean a tweaking of focus and emphasis while for others, it will require a wholesale and fundamental change.
4) Emphasize women’s philanthropy. Women and family philanthropy were also a recommended focus area before the pandemic and as we emerge from it, signs say it should continue to be. In their latest report Donor-advised Funds: New Opportunities for Charities and Wealth Managers Investor Economics predicts that wealth holdings by Canadian women will continue to increase. “At the end of 2018, high net worth women (those with $1 million or more in financial wealth) controlled approximately $550 billion of the $1.7 trillion in financial wealth held by all Canadian women. By 2028, this amount is projected to reach $1 trillion,” says Keith Sjögren Managing Director of Consulting Services at Investor Economics. The report goes on to say that various studies in Canada and other developed markets have underscored the fact that women are more generous than men in terms of giving and are also interested in investing for the purpose of social impact.
5) Plan for a hybrid future – As we emerge from the pandemic, many are wondering what the future of in person events will look like, and none more so than those involved in the performing arts. “Those of us in the live performance world are keenly interested in understanding how people will behave once the pandemic is over and whether audiences will come back. Thankfully, our research is telling us that they will, over time” says Jayne Watson, Chief Executive Officer at the National Arts Centre Foundation. She points to Australia, where the pandemic has begun to subside as further evidence, where shows like Come From Away and Hamilton are playing to full houses. But she goes on to say that given all the advances that we have made in digital, it won’t be a wholesale ‘going back’. So, whether thinking about the delivery of programming or how to raise money and engage our donors, we should be proactively planning for a recalibration of the right balance of in person and online for all our activities. A hybrid model will be our future.
6) Take action on DEI – The topic of diversity, equity and inclusion must be front and centre as you contemplate your future. We’ve been having conversations for years that the charitable sector needs to make DEI a priority, whether in who it serves and reflects in its work, in who is recruited to senior staff and volunteer positions or in who is embraced in its donor communities. Sadly, we’ve got a long way to go, as evidenced by a recent Statistics Canada Survey reporting that among participating board members, 14 per cent identified as being immigrants to Canada, 12 per cent identified as belonging to a visible minority group, and three per cent identified as First Nations, Métis or Inuit. The time for talking is over and it’s now time for action. Assess your current environment, identifying obstacles to progress. Nurture a culture that values DEI. Build a more diverse talent pool for both staff and volunteers. This is no longer a nice to have.
7) Support your staff – And in the ‘last, but certainly not least’ category, is your staff. The past twelve months have been a marathon. As we approach ‘the finish line’, the challenge we face is that the ‘race’ is only just beginning, as we now shift to growing and rebuilding. We know that people have been working harder than ever and already risking burnout. So, a big threat is just simple fatigue and inertia. Organizational leadership must make managing the energy of teams and staff a priority, looking to help them support them, but also to help them re-energize, re-focus and become inspired for the next leg of the journey.
Once we make our way through the remainder of this year, the bigger question will become what will things look like after 2021…in 2022, 2023 and beyond? So, start thinking about your multi-year fundraising strategy.
Is a new campaign the right approach to jumpstart your fundraising and get attention in a post-pandemic marketplace? What should your portfolio, or mix of programs look like over the next five years? Do you need to invest in your individual giving programs? Are you as ready as you can be to take advantage of the impending wealth transfer? Do you have the right level and number of skills and experience to execute?
Exploration of these questions must be front and centre over the next year or more. And this is not a one and done exercise, but rather an ongoing revisiting to check in on where you are at and what the latest conditions are telling you. While we can never have full control over our futures, by making good choices today about where to focus efforts and ‘plant our seeds’, we will set ourselves up for a wonderfully productive and successful next decade.
Here’s to a fabulous Roaring Twenties for all!
– Nicole Nakoneshny, KCI Partner / Lead, Knowledge + Insights