Navigating Philanthropy in Uncertain Times - What You Need to Know

In times of economic uncertainty like our current environment, fundraisers have to adapt to shifting donor behaviors and giving trends. While overall charitable contributions may fluctuate, strategic development activities can help you maintain stability and help you meet your goals. Here are seven trends often found in philanthropy during economic shifts, along with recommendations on how you can respond to shore up support and minimize the impact of funding cuts.

Overall Giving Declines Slightly, but Major Gifts Hold Steady

Historically, economic downturns have led to a slight decline in total charitable giving. For example, during the 2008 Great Recession, donations fell by approximately 6% (Giving USA, 2009). However, high-net-worth donors typically continued to give, sustaining many organizations through tough times. Wealthy donors often view philanthropy as a long-term investment and may even increase their giving when the need is urgent.

What Nonprofits Can Do:

• Prioritize relationships with major donors through personalized outreach.
• Focus on your case and frame giving as an investment in impact rather than a simple donation.
• Offer flexible giving options, such as multi-year commitments or stock donations.

Donors Shift Their Priorities

Many funders and individuals may initially focus on urgent needs such as food security, housing, and healthcare. Organizations in non-essential sectors—like arts, culture, and advocacy—may have to work harder to demonstrate their relevance and articulate their case for why funding is needed.

What Nonprofits Can Do:

• Align your messaging with current donor concerns and emphasize your immediate impact
• Use real stories and data to highlight your organization’s effectiveness and detail your plans.

Corporate Giving Shrinks, But Foundations Often Step Up

Economic downturns can lead to reduced corporate giving if profits decline. However, foundations tend to increase their support by adjusting payout rates and tapping into reserve funds. During the pandemic, many foundations relaxed restrictions and accelerated grantmaking to support urgent causes. Some funders, like the MacArthur Foundation, have already stated their intention to increase giving.

What Nonprofits Can Do:

• Strengthen relationships with foundations by proactively sharing your needs, challenges, and impact data.
• Explore new grant opportunities that align with programmatic shifts and increased community and public needs.
• Adjust proposals to highlight how your organization is addressing pressing issues.

Donor-Advised Funds (DAFs) Become a Lifeline

DAFs allow donors to set aside funds for charitable giving in advance, making them a critical resource during economic uncertainty. Since these funds are already earmarked for philanthropy, distributions from DAFs often rise during downturns.

What Nonprofits Can Do:

• Cultivate relationships with your donors who have/give through DAFs.
• Provide compelling reasons for DAF holders to support your cause now, spotlighting cuts in funding, increased demand for services, or new initiatives to meet needs.

Long-Term Relationships Matter More Than Ever

Donors may temporarily reduce their giving, but they often remain engaged with organizations they trust. Stewardship efforts today can lead to increased giving once the economy stabilizes.

What Nonprofits Can Do:

• Focus on donor engagement, even if gift sizes decrease.
• Strengthen stewardship efforts through personalized updates and impact stories. Provide real updates that give your donors insights into your challenges as well as your wins.

Planned Giving Becomes More Attractive

Economic uncertainty makes legacy giving, such as bequests and wills, an appealing option. This allows donors to commit to future support while preserving their current assets.

What Nonprofits Can Do:

• Educate supporters about the benefits of planned giving, including clear and concise information on your website.
• Offer resources to help donors include your organization in their estate plans.
• Share testimonials from donors who have shared their planned gift intentions, and honor planned giving donors to encourage others to follow suit.

Matching & Challenge Gifts Drive Giving

Donors are more likely to contribute when they know their gifts will be matched. Major donors and foundations often step in to provide challenge gifts that incentivize broader support.

What Nonprofits Can Do:

• Ask funders if you can leverage their gift as a matching challenge in your appeals and major gift campaigns to inspire increased giving.
• Work with your major donors to craft creative challenge gift opportunities.
• Communicate the urgency and impact of matching gift opportunities.

These trends and strategic fundraising approaches are just a start! I hope your donors are engaged with your fundraising; if not, please reach out to learn more about how you can build resilience and maintain donor support—even in our crazy and uncertain times.