Recovery Through Innovation: The Canadian Trend Report
DonorPerfect Community Conference 2023 DPCA session with speakers Peggy Killeen & Laurence Morel
Recovery Through Innovation: The Canadian Trend Report TranscriptPrint Transcript
And I’m here with Laurence and Peggy for our session today. This event while virtual is taking place on Turtle Island, today’s session is hosted from to Turkey within the traditional unseeded lands of the Kenya and k cap people. Many of our colleagues including myself are in Lina Read More
And I’m here with Laurence and Peggy for our session today. This event while virtual is taking place on Turtle Island, today’s session is hosted from to Turkey within the traditional unseeded lands of the Kenya and k cap people. Many of our colleagues including myself are in Lina po kink, unseeded land of millennial and IP people and other colleagues live on traditional land of Yuan wendet, the Seneca and the Mississauga of the credit, we recognize and respect these nations as the traditional stewards of the lands now called Montreal, Philadelphia, and Toronto. Our speakers for this sessions are Peggy Killeen, and the host Manuel Peggy CFRE, is a senior consultant for PG growth Canada’s premier fundraising consulting firm focused on building capacity for charitable organizations through plant giving. She has served as a director on the boards of both the Canadian Association of gift planners the CAG P, and as the AGP foundation and works part time for the CTP foundation as its development director. In 2020, she was given the friend of CAADP Award in recognition of her significant contribution to the advancement of strategic charitable giving, both on a local and national scale. Since joining DonorPerfect Canada in 2000, as a support representative la halls has held multiple positions within the company on her way to her current position as executive director. In doing so she has truly been able to learn something new every day about our team and our clients. Before we get started, here are a few housekeeping items. This session will be recorded just like all sessions, handouts and slides can be found on the right hand side under details, files and documents for downloading. And if you want additional information about this session, please take the poll on the side and answer yes. So now let’s get started.
Hello, everyone. Good afternoon. I think we are only afternoon even if you’re in DC because it’s 230. Right. Almost there will be presenting the Canadian Trend Report and along the way, Katie will share thoughts and experience with charities. The data we’re going to use in that report is based on a study conducted by Deloitte perfect on its Canadian clients. The study follows 750 organization between 2019 and 2022. Specifically looking at total gifts, average gift size, median gift size across each. This data is corroborated by Canadian tax filing reported in the 2023 giving report surveyed 3000 Canadian charities produced by Canada helps and avoiding externalities. So now let’s dive in. As you might have noticed, like CBC News, I don’t think that the only one the cost of living increase, and it’s increasing at its fastest pace since 40 years, in general Canadian of seeing all your prices for food, shelter, and energy transportation in that descending order. So what are the main causes of this orientation we we then find three causes. The first one is global supply chain disruption. Second one is temporary increase in pent up demand for items that were meant to valuable during the pandemic, all kinds of items. And the last one would be the widespread droughts affecting agriculture output. Why are we speaking about the inflation rate because this has a huge impact on charities. The Giving report showed that AI inflation caused by the pandemic as intensified long standing threats to the charitable sector in Canada, a smaller organization defined as having less than $500,000 annual revenue did not adapt really well to the financial strains of the pandemic. larger organization were in a better position. And if we take a small organization, they showed either decreasing profit margin since 2,098%, compared to focus on for larger organizations. And I think Peggy, you want you to apply the situation for the smaller organization?
Yes, I just wanted to say that I think that one of the things we noticed right away at the beginning was that smaller organizations may have been relying more on in person events. And the pandemic really hit them hard. There was some pivoting to conferences virtual like this for example. Little bit took a little while, but they took they do take resources and time and money which smaller organizations may not have had access to. And this really is going to be a theme of what I might talk about today. But it’s why I’m a big fan of diversifying your revenue streams so that you’re not relying on that. One thing that may disappear in the kind of situation we had, and then just making sure that there’s integration between the different things you do but having not only an annual campaign and, and major campaign, obviously, but also your plant giving, having a Planned Giving Campaign, or program happening. And unfortunately, small organizations may not have the luxury to diversify, because it can be a sophisticated approach that takes more staff and resources. But there are ways to integrate these things into your into your programs.
Thank you, Peggy. So as we will see, let’s it’s a tough situation for charities. And we identify three financial strains on charity at the moment, the increased service delivery costs, the increased demand for services, and the increase that salaries along to those financial strain, we then find three lasting effects. The first one is increasing charity demand, employee burnout, and decreasing giving. So on the coming slide, we’re going to dive in each of those three effects. So this one being charity demand is increasing. Again, I’m going to repeat myself self as a toy, or a year prices are up for food, shelter, else, energy transportation, the direct result is higher than normal demand on charities, constituents and employees are in greater need of support. I take it this is what you see, too, right?
Yeah. And I’ve seen that very much. The charities that I’ve seen locally, in Montreal, where I am, but also talking to my national colleagues, the ones that are really under strain are those that are providing food and seek food security, housing security to people providing safety to woman to racialized communities, and a lot of grassroots organizations actually stepped up perhaps during the time to help relieve the pressure, but it’s very hard to keep up the kind of momentum as things obviously, don’t get better. So that’s that’s something that I’m seeing for sure.
So let’s move to more detailed data. According to the 2023, giving report, 44% of charities report that staff salary increase due to inflation. But without increasing funding, the only option is to cut expenses at a time when Canadians need them the most. To Intel, Canadian expect to rely on charities for basically in the next six months. And those we spend them one in four parents and one in three are between the age of 18 and 34. So what are the impacts that are the impact on Canadian what are the impact on charities 80% of Canadian charities report that inflation has impacted the cost to deliver the services why funding has not increased to meet this email 40% have experienced a loss in increasing demand since the start of the pandemic 57% cannot meet your level of email 22% demand significantly exceed capacity. So this is not really good news. And I’m really sorry to be on the bad news for the start of the presentation. The next one is the burnout. So fundraisers are quickly burnout. And I have charities reporting Are you concerned about burnout. More than all for charities say the fewer volunteers and before the pandemic more than offered the same number of paid staff working despite ID net. One of the main reason of the burnout, only 24% have increased staff since the pandemic started and 15% decrease the number of staff. Biggie I think this is also what you experienced in your daily work, right?
Yes, I see a lot of this I see a lot of movement just happening. What we call The churn of staff, people moving around, I will say it’s often people who have more choice who are moving. So we need to remember there are some people who have do not have choices. But even as people have those choices, it seems that maybe they’re not staying put. So we’re seeing people go, I’ve seen people go through several positions during this period. I think that we all know that this always happened. In the fundraising world, I remember that we used to say that major gift officers moved around every two years. But it definitely feels more pronounced to me now. And I think one of the big reasons is that the pandemic forced many people to reconsider their lives to think about what they were doing. Was it meaningful to them that they feel fulfilled, and some people I know that we’re going towards the end of their career decided to take that step down, step away earlier, so we lost a level of senior leadership that I can see. But that’s not at it’s the case for everyone, because I think everyone was experiencing this, thinking about their self care in some cases. So the of those that didn’t retire, others were looking to make sure that they were doing the right kind of job that was the right kind of fit for them. Because you start to think about yourself a bit more and think, why am I doing this? What’s what’s my purpose here. And I’ve been seeing many I get, often get recruiters coming to me, I have organizations coming to me to say we have seen your jobs, they’re not filled, they’ve been posted for months, or they’ve taken in another thing that’s happened is they’ve taken in staff members that they feel maybe are not quite, I don’t want to say competent, but are not exactly at the level that they should be for this job, but have decided to take them, which I think is smart, invest in them, and give them professional development. And this is something that I’ve been doing is coaching, and training. I’ve also seen during this time, I’ve seen board members, volunteers actually step in to take positions, especially executive director positions in small organizations. So what can we do, I’m just going to give some options here, what I think that we can do as charities, as leadership and charities that we can offer a better work life balance to people. It’s not about salary, which you know, it shouldn’t always be about salary, obviously, good, good salary is a good thing. But it’s more than that. It’s more than the money. It’s about offering that, that fit that fit with with people’s lives, especially for people who may be juggling family commitments. Those people who are juggling both parents or children, or either or, what we can do is we can also offer a culture that gives support to people, not one that assumes that you’re just gonna take on more and more work without burning out. And I do think I’ll go back to professional development, I think there is a need to offer people professional development, it should be offered to your staff, they should be encouraged to learn about things, feel that what they’re learning is something that they can use in the organization. They should be encouragement of coaching, mentoring of less experienced staff for more senior positions as they step up to fill the gap. And the smart organizations are the ones who do that. Finally, I want to say that the volunteers situation probably affect smaller charities even more, since losing volunteers may may affect the day to day work. They are they’re using volunteers to actually fulfill essential positions. And that’s a double whammy. That’s it.
Thank you baby. So, to recap, now, demand is increasing your note is on the rise and giving is declining.
We mentioned before that the cost of living is increasing as Speaker space CD kids at the same time donation have steadily declining Canadian tax filings claiming donation was 29%. In 1990 23% 20 years, and 80% in 2020. The shift is happening across all households and income levels. And figure you wanted to add a point to that Canadian revenue agency that right? Yeah,
I just wanted to say that just remember that this is Canadian revenue agency data because that’s really based on people’s charitable receipt claims. I’m not disputing that donations are declining, but also We are hearing that not everybody gives in this way to what we would call qualified donees. There is a trend, especially in younger generations to give where, where the funds are needed, whether there is a charitable receipt provided or not, so that that data is not reflected there. And I think it’s important to remember it. And, you know, there are examples of these platforms that do that, but also just communities that just give in a way that in your local community that that there is no receding GoFundMe as an example. And I also want to say that this isn’t just something that’s being used by mentioned, the younger generation, but I actually have a friend who is 86 years old, and just told me recently that he gave to a fundraiser through GoFundMe for a friend had asked him if if he could help out with somebody who was suffering, her family was suffering in some personal way. So this is definitely happening. And then the other thing that’s not shown here is that there’s also an ongoing shift of major donors taking up a higher percentage of the funds that are being given to charity. So we really need to keep this on our radar. And when you look at the giving report that Lohaus mentioned earlier, the the percentage that is in that report is 27%. Is is is funds that are coming from major donors from the percentage of the total percentage that that charities are getting, besides there being fewer giving households, which is what we would call this, this giving trend, declining giving trend. We also know that wealth is more and more being concentrated in fewer hands. So at an edge, I’ll give an example of an educational institution, university, on average, the single largest gift that they receive accounts for 21% of total funds secured, and this is information from the Canadian Council for the Advancement of education from research they did in 2019. And the other part of the research shows that the top 1% of donors to those institutions, on average accounts for 50% of total giving. So we’re seeing shifts in other ways as well. And we need to just keep that the back of our minds as we as we, as we go on with our work.
Back to all this. Thank you. Thank you for the comments. Oh, that this decline translate into the revenues of charity. Only 12% of Canadian charities have seen the fundraising results surplus pre pandemic level, less than all said the funding level were equal to click and damage level. And one firm said the funding is below pre pandemic level. So again, this is not really good news. But the really good news now is I do have good news. To make sure I we did a slide with it. And now for some good news, right? So don’t be depressed, it’s coming. So the number one good news is generosity supported Canadian DNA. In 2020. More Canadian under 25 were given and donors between the age of 25 and 55. Were increasing. In 2022, we saw that donors are still motivated by children’s events and eating initiative like they were during the pandemic. And in 2022, we have two examples. The first one, sorry, the first one is the crisis in Ukraine that some cold war and that person are so mad anyway, a group of charities so significant funding in response of the crisis in Ukraine, and according to Canada at 10% of the new donors that gave in 2022 donated to Ukraine. Another example in 2022 is the GivingTuesday. A quarter of 2022 GivingTuesday. Donors were returning donors from 2020 and 2021. And a third gave an additional gift in December. I figure you wanted to add a point about your new daughter’s.
Yeah, I did. So this is great news. But let’s let’s make sure that when we’re talking about new donors that they are being retained. And this is this is really crucial. So we’ve got this influx but what to do with them. And the 2022 report that came in from the AFP from the Association of Fundraising Professionals says that the average new donor retention rate for organizations was 19.3%, according to their research, so just to put that into into reality, imagine a company in the private sector having a 70 to 80% loss of customers or clients, when they had got a new client 70 to 80% of them did not return. So the question that I put out to us in the sector and to you as as people working within Charities is why are we focusing so much energy on on getting new donors when we’re losing them as fast as we get them a lot of the time. And many of you probably know this, but it also, by industry standards, we know that it costs about five times more to acquire a new donor than it does to retain one. We also know that if those first time donors come back, even if they just come back one more time, they’re much more likely to become recurring donors. And the same AFP studies said that the repeat donor retention rate was 59.6%. So if you get the second gift, then you’re well on your way to the third gift. And the fourth one. And according to a study that’s By DonorPerfect, a donor who stays with an organization for 10 years, give six times as much as a donor who stays for 2.5 years. So donor retention is is absolutely key. And I’ll I’ll say a bit more about that later.
Thank you, Peggy. So planning is key. And if we go if you are in strategic planning, we have some silver linings for you. So something you might want to look into. They are younger donors and power to make your first gift, they may respond well to giving challenges and modern online fundraising. They also existing Daniel’s ready to increase the gift for coding the really careful. And there are plenty of fundraising opportunity that inspired both new and returning donors. And piggy you have a lot to say on this. Right?
I do. So where to start? I would say that this is not so innovative. I mean, we’re talking about planning how we focus our strategies, right? I would say that we need to focus on being less transactional, engaging, more meaningfully. We’ve heard this during the conference. I know I’ve seen some other sessions where we’ve talked about relationship building stewardship, so focusing attention on those, and being very intentional about focusing so that you’re making sure those repeat donors come back and that they become monthly, all loyal supporters. And loyalty is really fundamental to our fundraising. It’s an expression of how our donors feel about us, it’s based on values that they share with us, it means they want to support us, and potentially that they want to support us into the future. They’re committed to us to our mission. So this is the hard core sustainable foundation that will actually help us to survive in the long term. And we know that if you have a good for example, a good loyal donor base, a monthly donor base, that’s the biggest annual contribution that you’re going to get. After major donors, they give seven times more than one time donors give. We also know that 90% of monthly donors, so the retention of, of 90% of your monthly donors are going to give to your organization next year. That’s that’s the kind of retention you you have once you have that base. And there’s some research in the UK, that shows you that our most loyal supporters are also nine times more likely to promote your cause to their own networks. But this is the key, they are five times more likely to leave you a gift in their will, which takes me to what is obviously my passion plan giving, because what better opportunity is there than strategic charitable giving, in this in this kind of situation that we have, and in particular would focus on gifts in wills or legacy giving. So we all know that there’s a transfer of wealth happening and intergenerational transfer of wealth happening. And we also, if we don’t know we should know that an extraordinary amount of where Canadians hold their wealth is in assets, which means it’s not cash. Not able to be given to you today but but it’s a substantial amount of wealth. What else we also know that there is an in Canada that there is an untapped potential. So anybody He who has been involved with or has been partnering with or following the CHP Foundation’s willpower campaign will know that we’ve now moved in the last couple of years since we launched the campaign from seeing an increase of Canadians who have left a gift in their will to charity. So this is this is really an opportunity that we can’t ignore. We know, our research is showing us that it’s it’s increased from 5% of Canadians to 8%. And that may not sound like a lot. But that’s 1.2 million more Canadians who have done that. And it’s potentially another $37 billion in future donations to charities. The other thing that we know about gifts and wills that’s really important for your day to day operations is that given once somebody’s made a gift in their will they actually increase their current gifts. So your current giving will actually go up. And this is research from Dr. Russell James at Texas Tech University showing that donors who make a charitable bequest increase their current giving by 75% in the subsequent five years. And why is that? I would suggest to you that it’s because of legacy gift intentions, in an intention of a legacy gift deepens the relationship that you have with an organization once you, you, you decide to join them in this way, it’s almost as if you’ve made them a member of your family. And that leads to more commitment leads to more gifts. The other thing that’s really crucial about this time economically, is that gifts from estates do not decrease during times of economic uncertainty, unlike those gifts from the other revenue streams, the ones that we’ve seen decreasing, and what does decrease our government funding to organizations, money from individuals, we’ve just seen that money from corporations and money from family foundations, but gifts from estates Stay, stay static, because it makes no difference. What’s what’s happening out there makes no difference when someone’s will, is realized once their intention has been realized. So the focus is on long term planning, be strategic, know that if you do this, you will have a pipeline that will give you sustainability for exactly the kind of hard times that we’ve been experiencing. Is that enough, Morehouse?
Yes, it’s perfect baby. Thank you. If we go back to our GivingTuesday example, of earlier, we know that if your organization participate in GivingTuesday, your fundraising revenue will increase six times more than a non participating participant between GivingTuesday day and your years. But you need to put in place a strategic, you need to relate to those donors, you need to reach out to them like we saw in a lot of session during those two days at the conference. And I think Peggy, you would agree with me right that you need to stay warm and absolutely to those donors.
Absolutely. So, you know, the question is, what do you do with these donors, once they’ve given? How do you stay with them? How do you keep them coming back? How do you make sure they’re given that opportunity that I just spoke about to make the ultimate commitment? And I think it’s, it’s it’s really all about making sure that donor stewardship, the building of relationships is understood within your organization to be a key component of what you do. It’s just as important if not more important, I would suggest more important than another communications campaign to acquire more donors. I think the focus on retaining those donors should have resources put into it. Everybody needs to understand why it’s important. It’s the same when it comes to generating leads, as we call them for plan give it you can generate hundreds of leads through communication you can have people say, Well, I’m interested but if you don’t have the resources to actually start building relationships with those people, they will just those leads will just fall to the wayside, they will shrivel up and, and have not been watered in any way. If I use the analogy of a plant. Same thing with with with our donor stewardship, we really need to make sure that it’s intentional. It’s a focus, that there is a process that’s followed by everybody, that it’s personal, all the things that we’ve been told about at the conference, and it’s nice to talk about them, but we really need to convince our leadership that it’s more than just talking about them. We have to we have to put resources in their hands. And, and financial.
Thank you, Peggy. So, in the next coming slides, I’m going to present what we can do to achieve recovery. And what piece of it is using innovation. So three things to remember in 2022. Not much we can do about inflation. I mean, we can all stop consuming goods and starving to death. But that’s not really a solution, right. But the good news is they are cost effective ways to incorporate fundraising innovation into your charitable giving strategy. Can that turn out tonight enough. The second thing would be fundraising tools that become smarter as nonprofit technology leaders develop new innovation and adapt them to remote workplaces and more flexible work arrangements. Think of zoom. Everybody knows them now cloud based software like CRM, or productivity tools like Google workspace or Microsoft 365. In order to address the challenges that Canadian charities are facing today’s tools may be sophisticated enough to not only brand and sustain an organization, but also increase opportunities for meaningful conversation with Dawn. The good news in all this is you don’t need to spend all your budget. Free Tools are everywhere. In 2023, they were there before but it’s increasing. So can the QR codes AI generated using those tools would allow you to avoid outsourcing, reduce costs and streamline your operation all at once. If your budget allows it, fundraising CRM, like Donna perfect, I mean, we shred on a perfect none analysis software she can can include website building tools, email templates, code generator, AI research, and more depending on your specific needs. Now the good news is what we saw across data perfect lines. So what we saw with the study we conducted over three years is they’ve been actually able to increase the total race by 50%, the number of gift by 80%. We activated donors by 55%. Since 2019, not to mention the average annual giving per donor increase in 2020 2021, and 2022. This is a lot better than the start we presented with the tax scanning and find, right. So what we think is your nonprofit software should be easy to learn and use, automate your professional tasks, maintain strong digital partnership, and integrate with the most recent tools. And piggy as a user of data perfect and other CRM, I suppose you wanted to add something on this, right?
I did, because I think having a good database and eat and the key is what you said they’re easy to learn and use having a database that is easy to learn and use, especially with the turnover that we have, can make all the difference to what you can do when it comes to your relationship building, your stewardship, your donor retention, tracking those loyal donors tracking your legacy interests, your legacy intentions and commitments. So if people know how, how to do it, and it’s not difficult, they will put that data in and having that data is obviously going to help you down the road. It’s not going to help you if you have a turnover in staff, that person had everything in their head, in terms of the kind of relationships they were having, or they just weren’t being when when tracking it properly. So your staff, your your team members will put data in if it’s, if it’s a if it’s easy to do, and if there are processes that are clearly marked for them and clearly clearly described. And not you know, not confusing. Just just something that becomes just a way of life and something you have to do
here So in conclusion, I inflation, I charitable demand declining revenue, you need to be really careful when investing in technology. software needs to provide access to innovative tools, but also automates fundraising operation. This combination ensures of productivity to reduce costs and creativity to match Nice giving. So that would be the end of the first Canadian trade report ever. Sarah, do we have any question in the queue? Or chat?
Oh, well, one of the one questions came in or pretty early when you were talking about burnout is do you have any advice on how to find fundraisers? Beyond offering them? You know, professional development once you found them?
Well, well, I don’t know. Long answer. I don’t know, if you have experience at this. I mean, I can just give you my experience of what I what I see and what seems to work, I think I’m going to say again, that try to make it easier rather than difficult for somebody to have a job. So I spoke to a another recruiter, actually someone from an organization lately who had showed me the job description that had been there for I don’t know how long, there was no salary on it, no salary range, which is very important, because Why waste my time if I don’t know what you’re gonna pay, besides the fact that it’s discriminatory, particularly against women and women of color, how the salary range there, make sure that you’re offering things like I described the things that will make the job more attractive, make your own culture more attractive work on your on your internal culture, so that it’s a welcoming place, but people will only know that once they get there. Don’t don’t, I would even say don’t even put degrees and education degrees that people need that are why would they need it? Why do you need It’s not rocket science. Just just start simplifying these things, I don’t have a proper university degree. I have a National Diploma in fine arts. So you know, these are things that that we make we make these hurdles harder, even where people need to be based. It’s got to be based in Toronto, or it’s got to be based in Montreal that happened with with an organization I was speaking to, I said, Why are you doing that? This is again, it’s narrowing your now that we know people can work remotely, make sure that people don’t have to come to the office every day, perhaps there are things that you can do. But I’m afraid that we’re in a situation where it’s going to get tougher before it gets easier, but we need to make it as easy as possible. I’d also say advertise in the right places. So if you’re advertising for for gift planners or people in strategic charitable giving, do that through the CGP. Advertise through AFP. Advertise through your professional associations that are related to you, and use those networks. Somebody likes that.
Yeah, it’s very good advice. That’s why
I just want to point something out really important, I think. And it’s more happening in the private sector, like for Donna perfect as a company, we don’t restrict ourselves to hire people we bought, you know, you can do a steady pace in Canada. We have people working from the Greater Toronto Area, we have two people working from a small village in Quebec, you would not consider coming to Montreal. And anyway, we don’t have enough office anymore. So they wouldn’t come to Montreal office because there is no office, right? So it’s, but it could work exactly the same way not for all operation for nonprofits. But if you’re a major gift officer, it doesn’t really matter where you are based, right. As long as you have the proper tools to work, it’s fine. So
I just put something in the chat in case people were interested in looking at, at the tools that willpower offers.
That is awesome. Thank you so much for sharing that. I really appreciated this session. I think everyone that is watching right now appreciate it. I think that it’s a very important session. It’s not like you said didn’t start with good news. But at least there was some good news in there. And there was some solutions offered and some tips and tricks. So thank you. That was all the questions that we had. So in the q&a box, I wanted to remind everyone that we have our closing remark and community hour in in a room so it’s a little different than everything else you’ve attended. If you click on rooms at the top of your screen, you’ll be able to see it right there in the nav occasion bar and you’ll be able to join at exactly 320 differently. I want to say thank you to everyone who has been here so far. And thank you so much Peggy in the halls for this wonderful session. It’s a pleasure. Thank you