Trends in Donor Engagement

Although there is increased competition for donors everywhere, in some parts of the world there are growing numbers of donors stepping forward to donate to community foundations. Such donors are increasingly interested in the outcomes of their investments.

General picture

It is difficult to give a global assessment of trends with donors, since trends vary from place to place. However, it appears that increased demand for resources from civil society means that there is more competition for fewer funds. At the same time, the community foundation movement is maturing in some places so that it is easier to attract donors, but those donors are more demanding. Technology is becoming increasingly important, and many foundations are reaching out to young people.

Competition

Increased competition was a general finding.

To take some examples, the Council on Foundations said: "Competition for market share tightens as more giving options become available and new players enter the nonprofit field". In Ukraine, almost all community foundations noted growing competition in the sphere of charitable fundraising, reduction of the range of major international charities willing to invest their resources into Ukraine.

People stepping forwards

To compensate for the trend of increased competition and international funders stepping away, in many places there was a notable increase in local people stepping forward.

In the Ukrainian example just cited, the negative trends were balanced by more local donors and more corporate responsibility of local businesses. Similarly, according to CAF in Russia, "There is a trend in local communities for small local business and private donations to donate to community foundations. Big companies decrease their involvement and donations to community foundations because of the crisis."

In Italy, the Association of Grantmaking Foundations noted "a growing number of individuals and organizations that are using the community foundation as fiscal agent in raising money to support a specific project."

Success comes slowly

There were signs in many places that the notion of a community foundation was taking root in the local philanthropic landscape.

To take some examples, the Association of Community Foundations in Bulgaria noted that local corporate donors are beginning to recognize the important role the community foundations have, but it is not yet mainstream. The Morogoro Municipal Community Foundation suggested that as people have seen the benefits that their money is bringing they are more willing to step forward. The Czech Association of Community Foundations noted that individual and corporate givers are maturing in their approach to philanthropy. After the fall of communism 20 years ago, charitable giving was driven primarily by emotion focused on current needs to 'do good'. Now donors are starting to think more strategically about their giving and increasingly direct their support to projects based on their potential for success and not only on need.

Donors are more demanding

Donors want to be more engaged and are more invested in outcomes than they used to be. In the Czech Republic example just cited, donors have started asking to see the results of their giving and are asking grantees to measure outcomes.

This represents an important opportunity for community foundations to bring value to those donors as models of modern, strategic philanthropy.

At the same time, there are risks. In Belgium, donors want to be actively informed about the realization of the projects they support. But, sometimes donors are unrealistic in their expectations of what can be achieved with their money.

Technology

Technology is becoming highly important. In Romania, for example, there is much interest in developing easy to use and cost-effective donation and payment systems (such as donation SMS, on-line systems and direct debit for donations). In Ecuador there is on-line giving at www.fundacionfuturo.org.ec and www.esquel.org.ec. In the United States, according to the Council on Foundations, the expansion of social media and online giving is one of the top trends.

Youth

Many community foundations have reached out to young people. There is a proliferation of 'youth banks' in which young people act as funders themselves.

To take some other examples, The Whitley County Community Foundation has engaged young people in the grantmaking process. H.A.N.D.S. (Helping achieve new direction through students) is a 15-member student group (five students from each of the three county school systems) that meets monthly to discuss community needs, review grant requests and allocate funding to projects with an educational focus.

Canada has a program called 'Engage', which reaches out to younger adults just entering the work force where the emphasis is on learning about the community and finding your passion rather than giving as a first step.

Where next

We explore donor engagement strategies on the next page.