Top 5 Fundraising Trends to Watch in 2023

By Devi Thomas , Global Head of Industry Solutions, Tech for Social Impact, Microsoft

There are moments that only fundraisers can understand. Like when the one-time donor you’ve been building a relationship with brings a major gift to your latest campaign or when all the tables are sold out at your annual gala. For fundraisers, exceeding goals or missing them by £200 or even $2000 is what they live for, or dread.  

So, therapy is a good word to describe what happened when over 2,000 fundraisers descended on New Orleans last week for AFP Icon, the Association of Fundraising Professional’s flagship event. In a little under four days, we learned so much from fundraisers around the world on what's changing in their environment, how donor behavior is disrupting traditional fundraising, and why lifetime donor loyalty remains a north star; albeit an increasingly challenging one. Microsoft's Tech for Social Impact connected with fundraising teams and digital fundraising leaders at AFP to learn how we could best help design, co-create, and reimagine technology to meet today's biggest fundraising trends. 

1.    Focus on the law of the few to recession-proof: Many fundraisers are reacting to a three-year decline in the number of overall donors giving to causes (a 10% decline since last year). This steady decline was called out as a repeated call-to-action to galvanize fundraisers to think differently about donors and stay laser focused on retaining engaged donors.  In the latest 2022 donor reports, the Fundraising Effective Project’s data shows that dollars from large donors significantly weakened, leading to a decrease in overall money raised. 2022 saw a small increase in dollars from recaptured donors, while funding through retention and acquisition remains a challenge.

While the number of donors continues to decline, nonprofits have seen an increase in the average gift size per donor in recessionary times. This has led to a pronounced look at recurring giving - shifting one-time givers to recurring and more importantly, lifetime donors. And it's worth all the buzz because data shows that within one year of signing up, recurring donors make additional one-time gifts 75% more often than one-time donors. The average one-time donation size is higher for donors with recurring plans. The primary goal that fundraising technology like Microsoft's Fundraising and Engagement serves is to give a single view of the donor so the fundraiser can use relevant data to understand how more engaged that donor wants to be. Buzzing among the hard-working fundraisers is a growing focus on donor peer groups, social listening and driving donors to try volunteering and advocacy to deepen engagement, even as giving slows down. 

1 Fundraising Effectiveness Project |  2Blackbaud |

2.    Inclusive, multi-generational outreach: As much as depth is critical, today's fundraisers from small and large nonprofits alike are looking for breadth too. New donors are everywhere with vastly differing expectations in how they want to be reached and how they want to give. Data from Double the Donation shows Gen Z donors expect to see their causes active on social media like Instagram while Baby Boomers still expect direct mail from their favorite causes. Outreach to meet donor expectations while targeting brand new audiences remains top-of-mind for fundraising managers. Scouring LinkedIn and social media sites for cause-related content posted by high-net-worth donors and understanding how peer-to-peer fundraising can reach whole new demographic groups has led to a renewed focus on multigenerational gift requests sometimes even within the same household. Microsoft's donor management tools allow fundraisers to group household gifts together allowing for clear insight into how the cause has been received by related donors. Pooling donor data in one place allows for a more detailed view on how and when donors are likely to give and how much more they can give. 

3.    Online Engagement is at an all-time high: 65% of nonprofit engagement is through digital, higher than the private sector per Twillio. Over 30% of baby boomer donors are inspired to give by email today while 39% of millennial donors are inspired to give by social media. Online giving and mobile payments have become table stakes for fundraisers who shared that they are still grappling with how to maintain secure online giving portals that sync with their back-end finance and funds processing tools. Microsoft’s secure tools built into Microsoft Cloud for Nonprofit is designed to help protect donor data and shield nonprofits from data breaches that are unfortunately too common in the sector. With Microsoft’s constituent engagement tools, fundraisers can work with marketers to build online nurture journeys and campaign communities. If a donor gave in response to an appeal, how can we thank the donor, tell them to sign up for more about the cause, give frequently monthly or annually in a seamless click, but maybe most importantly, can they tell friends about our cause too?   

4.    It's nothing if not personal: Fundraisers at AFP Icon were thrilled about deepening interest from donors getting proximate to causes – helping in new ways using their voice, time, and resources. Conversations swirled around donor-advised funds, personalized opt-in giving programs and even giving with cryptocurrency. But this led to even more interest in truly understanding the donors you are targeting. In many examples, nonprofits described categorizing their donor by campaign type and giving type and then experimenting on A/B testing with emails to best understand what appeals to them. The most compelling data that fundraisers are looking for is how a donor likes to give, not just the channel but what types of campaigns are most compelling. Matching gifts? Unrestricted giving? Personal cause story? In Microsoft’s Cloud for Nonprofit marketing toolkit, segmentation builder and “customer” (think donor) insights are built in with a healthy dose of predictive AI to help target, personalize and cut through the noise to get the donor’s rapt attention.  

5.    Fundraisers found their perfect copilot: With over 2,000 fundraisers talking about personalized donor outreach, both the benefits and risksf new AI were lively conversations in the hallways of this year’s conference. Between large language models like ChatGPT and predictive forecasting of fundraising goals with data modeling, AI has the capacity to completely change the day-to-day life of a fundraiser. The hottest topics today are how to use AI practically as a resource and not a replacement. With a focus on the ethical parameters governing responsible AI, fundraisers can draft urgent appeal letters, review generated personal emails and identify the top three donor target groups in the blink of an eye. All of this still requires the fundraiser to sit in the driver seat and be the human intelligence behind the artificial. Microsoft’s host of AI tools integrated in products like Microsoft 365 as well as our marketing and fundraising engines provide the perfect playground for fundraisers to experiment with prompts and focus on how to leverage this brand new resource. Microsoft is deeply committed to responsible AI frameworks for nonprofits and recently published our own guardrails on this topic. Our skilling initiatives are nonprofit-ready with free offerings like:    

·      100 (Free) AI Courses to Help You Navigate the Future of Work (linkedin.com) 

·      AI Explainer: Foundation Models and the Next Era of AI:

·      The Basics of Prompt Engineering with Azure OpenAI API: Explanation of prompt engineering (starts at 11:50). 

·      Introduction to Artificial Intelligence 

There’s never been a more exciting time to be a fundraiser or a more challenging one. As the economic barriers to giving mount, the expectations of donors are unparalleled, yet the tools available to fundraisers are ever-changing and getting better. Still, the fundamental truth of fundraising remains - its innate mandate to help humans consider their own generosity, to find meaning in communities of changemakers, to make giving a daily habit, and to continuously push the boundaries of how much impact one individual can have.