The Future of Fundraising: 5 Key Trends Your Nonprofit Can’t Ignore in 2021

9 min readOct 16, 2020

When COVID-19 first hit, giving to nonprofit organizations ground to a halt.

We saw it first hand at Classy with thousands of fundraing campaigns running on the platform at any given time. But if you look at the history of giving over the last 100 years, a prolonged drop off was highly unlikely. People give through personal hardships, people give through recessions, and as it turned out when things came roaring back a month later, people give through pandemics.

Each year we predict the top fundraising trends for the following year (past trends: 2018, 2019, 2020); but for 2021, the backdrop was fundamentally different.

Prior to COVID, the vast majority of individual giving was still done through checks and cash — mainly through major gifts, direct mail and in-person events (~90% of individual giving by most sources). But when COVID-19 hit, traditional giving was upended, especially in-person events. What we’ve seen ever since is an acceleration to online channels and a newfound conviction among nonprofits and donors alike that going back to the old way of giving is not in the cards.

So, if your not already seeing these 5 trends at your nonprofit, I assure you, you will.

Let’s dive in.

1. Virtual events are here to stay

Arguably the biggest impact of the pandemic on nonprofit fundraising was the cancelation of in-person events. In response, we saw an explosion in the number of events that made the pivot from in-person to virtual. Galas took place on Zoom, endurance events took place on Strava and benefit shows were streamed on Youtube; each with their own integration to online fundraising platforms like Classy.

To be clear, virtual participation in fundraising events isn’t new to 2020. But when the pandemic mandated a full transition to virtual, nonprofit leaders were embolden to take larger steps in the virtual direction. Now they’re seeing a record number of supporters and dollars raised because:

They’ve freed themselves from geographic limitations;
They’ve lowered the barrier to entry for participants (less time off, no flights, and no hotel bookings);
They’ve reduced major event costs (like venues, food & beverage, etc.).

As amazing as virtual events can be though, the reality of the trend will likely be somewhere in the middle. We predict that a hybrid online-offline event category will emerge in full force in 2021 — one that has tailored experiences for both in-person and virtual attendees (good news — virtual attendees won’t be an afterthought anymore!). This will lead to a wider audience for most nonprofits and a more accessible giving experience for supporters.

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Resources:

[Guide] Virtual Events Toolkit
[Article] 5 Insider Lessons to Nail Your Next Virtual Event
[Article] How We Hosted a Virtual Event that Drew in Over 10,000 Attendees
[Podcast] How GBMC’s Virtual Walk Event Engaged Their Community

2. Recurring giving will lead the way

As the move online accelerates, organizations and donors alike are quickly realizing the benefits of recurring giving. In Classy’s 2019 State of Modern Philanthropy report, we showed that recurring donors are five times (5x) more valuable than one-time donors. That should be slam dunk reasoning alone, but we also found that recurring donors are much more likely to give again… on top of their recurring gift!

In 2021 and beyond, recurring giving will no longer be a secondary fundraising activity, it will become the #1 priority for the majority of nonprofit organizations out there. In fact, many are already starting to think of their core online fundraising efforts — like donation forms, peer-to-peer fundraising, and crowdfunding — as top-of-the-funnel activities to ultimately grow their recurring donor base.

Recurring giving is (9 times out of 10) a much better experience for the donor as well. Think of it like the many subscription or membership services you have in your life (Netflix, Spotify, Peloton, etc.). The company needs to work extra hard for your repeat payment each month, or else you’ll cancel. Recurring giving is no different, and nonprofit leaders are starting to rise to the occasion with new and creative recurring experiences that rival the aforementioned for-profit services.

It’s still early days, but there is no doubt that 2021 and beyond will unleash a wave of creativity and innovation in this area of fundraising. Both nonprofits and their supporters stand to benefit greatly by this trend.

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Resources:

[Guide] A Nonprofit’s Guide to Recurring Giving
[Guide] Templates to Upgrade Your Recurring Donors
[Book] Forever Transaction — by Robbie Kellman Baxter

3. Nonprofit and for-profit connections will only get stronger

One key lesson we learned in 2020 is that we’re truly stronger when we work together. This was evident through the creative partnerships we saw forming between for-profit companies and nonprofit organizations in the wake of the pandemic. Perhaps my favorite, the partnership between Sweetgreen (a popular organic restaurant chain) and World Central Kitchen (an organization that provides meals to those affected by natural disasters) that’s helping feed frontline medical personnel and vulnerable communities during COVID-19.

And while this for-profit / nonprofit trend has been strengthening for the past decade, the convergence of COVID-19 and the global social justice movement of 2020 may have been the tipping point. On one hand, consumers and employees alike are demanding that businesses add more purpose to their profit-centric model. On the other hand, we see nonprofits borrowing heavily from successful for-profit companies in search of a more scalable and sustainable growth model. Both are great in our view, as we believe the world needs more cross-sector collaboration to solve its most pressing social and environmental problems.

In the years to come, we‘ll continue to see the lines blur between the for-profit and nonprofit sectors, and see the continued rise of social enterprises and B Corporations. The result will not only be more frequent and more meaningful collaborations across the aisle, but the emergence of a more conscious form of capitalism that integrates giving more deeply into everything we do.

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Resources:

[Article] Tips for Rock-Solid Corporate Partnerships
[Article] How to Create & Digitize Your Local Partnerships
[Book] The Corporate Social Mind — by Derrick Feldmann
[Book] Reimagining Capitalism — by Rebecca Henderson

4. Giving will become more distributed

Giving is happening in more places every day — from social media to e-commerce to video games — and slowly integrating itself into the fabric of every day life (especially online). This trend will only continue in 2021 and beyond, making it even more important for nonprofit organizations to meet supporters where they are.

Livestreaming will become even more important moving forward, an area we’re already seeing taking off in 2020. Streaming live content is one of the best ways for nonprofit organizations to get supporters connected to the impact of their organization in a personable and fun way. It can be used within existing social media channels, or it can be used independently (on your website or campaign pages), making it an important and versatile tool.

Video conferencing (like Zoom and Microsoft Teams) should also be mentioned here. While similar to livestreaming, these platforms enable more of a two-way dialog between organization and supporter. We’ve seen everything from telethons to major donor curation move to video conferencing platforms, removing physical boundaries and opening up a wider audience (similar to virtual events, trend #1).

The basics will still apply too. Nonprofit organizations will need to continue to strengthen their presence on established social platforms like Facebook, Instagram and Snapchat, while testing new platforms like TikTok. But it’s becoming impossible to be in every channel all the time, so organizations will need to focus on one or two channels, and do them really well.

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Resources:

[Guide] The State of Multi-Channel Donor Communications — Virtuous & Next After Institute
[Article] Livestream Fundraising: What it is and how to do it
[Article] Video Conferencing: How to Look & Sound Your Best
[Article] How to Turn Followers Into Donors

5. Staying nimble is now a strategic imperative

We learned in 2020 that the fundraising environment can change at any time, and it can change fast. Whether you’re pivoting quickly in the face of adversity, or you’re in the midst of a larger strategy shift, 2020 proved that nonprofit organizations need to diversify their fundraising efforts to stay nimble in an ever-changing world.

This means that nonprofit organizations will need to start placing small bets (investments) outside of their core area of fundraising. If their fundraising is all events-based, they should consider adding a crowdfunding campaign on Giving Tuesday. If they’re heavily reliant on website donations, they should consider trying peer-to-peer fundraising. Building a culture of experimentation will not only lead to the next big revenue stream, it will enable nonprofit teams to change course quickly (and successfully) when the world moves around them.

Moving forward, we expect the accelerated shift to online giving to continue through 2021 and beyond. It’s becoming even easier and more cost-effective to spin up a new online programs (think crowdfunding, peer-to-peer, virtual event, etc.), so organizations will start trying new things more often. The highest performing organizations will empower their staff to try new fundraising ideas themselves, and then incubate them until they become signature programs.

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Resources:

[Article] 8 Ways to Diversify Your Fundraising Strategy
[Report] The State of Modern Philanthropy 2020
[Podcast] Taking Nonprofits from Good to Great w/ Jim Collins — Joan Garry Podcast
[Book] Built to Last— by Jim Collins

The Future Is What We Make It

2020 has been a challenging year for the social sector, but that doesn’t mean we’re not learning from it! In many ways, we came together in the face of adversity on a scale never before seen. As we double down on lessons learned, remember that the future is what we make it. Yes, success is getting back up after you’ve been knocked down; but, perhaps more importantly, it’s learning enough about why you fell in the first place, to make it harder to fall that second time.

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