Religious Decline: A Cautionary Tale

Have you attended a religious service in the past 12 months? You’ll find some form of this question in every donor base survey I’ve conducted for our clients, and I have consistently found that religious people are more generous than non-religious people. As a group, they give more and support more organizations.

So should we be alarmed by the Pew Foundation’s Research Center report, America’s Changing Religious Landscape? They discovered a decline in American religiosity through a more wholesome method than my question, asking people whether or not they are affiliated with any religion, what religion they are affiliated with, and whether or not that is a change from the past. The survey went on to ask the unaffiliated whether they regard themselves as atheist, agnostic, or “nothing in particular.”

Looking closer at the findings, it seems that religious non-affiliation rose across all generation cohorts from 2007 to 2014, but in inverse correlation to age, with 35% of Millennials (1981—1996) declaring themselves unaffiliated in 2014 contrasting with 8% of the Greatest Generation (pre-1928).

Seems pretty alarming to me when you consider the ample evidence that declining religiosity is a key indicator of what the future of American giving has in store for the nonprofit sector. But the foundation’s findings beg further research specific to fundraising. We can’t just wring our hands.

First, are we seeing correlation or causation here? While I feel confident there is a causal relationship between religious experience – a term chosen carefully – and altruism, it hasn’t been proved.

Second, we should listen to Peter Manseau[1] who cautioned in the New York Times, “…we are not necessarily seeing a period of religious decline. Rather this may be the latest in a series of moments when more Americans are intent on custom-tailoring their religious identities.” In other words, the causal relationship between religiosity and giving is alive and well and maybe even stronger; we just lack the language to define it.

Third, there is the perennial question of whether generations change with age or ages change with generations. We think the question has been answered in favor of generations, but it’s worth keeping on the table in this context. The Pew researchers seem to think so.

[1] Author of One Nation, Under God: A New American History

Marketing Automation – The Next Generation of Fundraising

In a November 2014 article in Harvard Business Review, Louis Gudema, President of revenue + associates announced, “Marketing automation brings it all together.  It is a terrific technology.”  He also lists marketing automation as one of seven marketing technologies every company must use.

Louis is right. The use of marketing automation platforms (MAP) for nonprofits has the potential to be a real game-changer for building and enhancing donor relationships, too.  A MAP can mean many things, so for the purposes of this post we’ll define it as the confluence of donor data, decision-based marketing, digital and offline analytics, and execution across multiple channels.

The automation allows fundraisers to develop a donor journey roadmap, planning out campaigns across an entire year based on the donor’s actions.  This gives you more personalized communications and frees up valuable time to deepen relationships or start new ones.

MAPs bring all of the functions of donor communication together and use all channels, both online and offline. So if you’re thinking about marketing automation, there are a few things to consider first.

  1. Clean Data

No matter how good a strategy or technology, without clean data and proper coding, they are useless.

  1. Data Warehousing/Sync

The data has to be stored in a database or data warehouse so the automation technology can sync with it for querying your lists and ensuring the proper segmentation.

  1. Donor Journey Roadmaps (aka decision trees)

Think of this as starting a donor experience with your organization on a blank whiteboard.  You then draw up the communication plan, with different scenarios based on the donor action.  This is the real heart of the opportunity that a MAP offers.

  1. Creative Assets

Once the donor experience map is created, you need to develop the online and offline creative to match the communication plan.

  1. Technology for Execution

With the hard parts already complete, the last piece of the puzzle is to enter the strategy into the automation technology, make sure it functions properly and then analyze the results.

There are many companies offering marketing automation platforms to develop decision-based campaigns.  Among them are RedPoint, Marketo, and even IBM and Adobe.  Each offers its own pros and cons based on your organizational needs and available resources.  But now is the time to begin the research on finding the right MAP for your nonprofit.

6 Reasons Why Donor Advised Funds Need Your Attention

  1. They’re the fastest growing nonprofit sub-sector

Donor advised accounts increased 34% from 2007 to 2013. That’s a phenomenal rate during a period of stagnating or declining donor bases. Will their popularity continue? Trends in both income and wealth strongly suggest more growth, particularly among those in the highest three deciles of household income and among those working past conventional retirement age.

  1. They’re a new form of planned giving

Of all the reasons people choose donor advised funds, the most common is the tax benefit. You can take tax deductions in years of high earning while spreading contributions to your charities over many years. It’s partly why Fidelity Charitable are seeing the average age of a donor opening an account is 54 while the average age of current account holders (including new account holders) is 64. But it also explains why donor advised funds are especially attractive to people employed in situations where initial public offerings affect income windfalls. Which undoubtedly explains why the Silicon Valley Community Foundation has soared to #5 on the 2015 Philanthropy 400 charity income charts, receiving over 3 times the contributions of the next largest community foundation.

  1. They put donors at arm’s length from the organizations they are supporting

Donor advised funds encourage their donors to distribute their funds to the charities they want to support. But the sponsoring entities are the ultimate distributors and stand – albeit politely – between donors and organizations. There are three kinds of donor advised funds: national charities like Fidelity Charitable and National Philanthropic Trust, community foundations like Silicon Valley Community Foundation and Boston Foundation, and what are called single-use charities that include, for example, United Jewish Appeals and many universities such as Stanford.

  1. Conventional donor base administrative practices can sever the arm

Bureaucratic practices such as overly slavish attention to who gets tax deductibility can lead to donor data cold storage where a carefully cultivated relationship is abandoned, forgotten, and lost. The donors who set up those donor advised fund accounts are simply employing a facility for personally planned giving. It is a grave mistake to presume they want to be anonymous if they haven’t specifically said so, or that their employment of donor advised funds means they are less disposed to engagement with the organizations they support.

  1. Donors don’t give exclusively via donor advised funds

Donor advised funds do, indeed, offer good reasons for employing them in planning philanthropy. Planning philanthropy usually means mixing current and deferred giving and neither precludes the other. So unless a donor says she only gives through her donor advised fund, it is a mistake – arguably an expensive mistake – to assume she does.

  1. Donor advised funds are coming under reformer fire

Critics say that donor advised funds work against charity because they remove substantial funds from current giving, allow their sponsoring entities to make money on management fees, and allow moneyed elite to game the culture of beneficence de Tocqueville so admired in young America. One reformer is calling on the government to enforce a rule much like President Nixon proposed and got from Congress in the ‘70s, mandating that private foundations dispose annually at least 5% of their financial assets. Because he finds donor advised funds a more egregious imposition on philanthropy than private foundations, he proposes a mandate that 10% of account funds be given annually.

Actually, according to National Philanthropic Trust, which while being a donor advised fund sponsor also keeps tabs on all donor advised giving, the average pay-out in 2013 – the latest year of their reporting – was 20%. Given the number of ways donor advised funds facilitate individual gift planning, it is more likely that imposing a pay-out higher than has been the norm would result in wasteful, not more effective individual philanthropy.