A Special Report

By David Benjamin

Each year, the charitable sector is challenged to adjust and respond to a unique combination of economic, social, political, and environmental influences. Within the last year, Canadian organizations have shown strength despite years of exceptional challenges, with 53 percent of respondents exceeding fundraising targets and 41 percent reporting income growth.

Resilience is a word that has seemingly increased in use over the last few years, illustrating the capacity of the sector to recover quickly from challenges. Such resilience not only acts as a risk management strategy but also as fuel for innovation and growth.

This year, Canadian non-profit employees have leaned into resilience, modelling a clear tenacity to support their missions despite unprecedented headwinds. Canadian supporters responded with an increase in exceptional gifts. While testament to the philanthropic history of this culture, it is an income source that is variable and organizations will need to ensure focus on long-term sustainability.

As growth was fuelled by an unpredictable revenue stream, it is even more critical to evaluate long-term plans and ensure alignment of investments to those goals.

Despite acknowledging the value of technology in improving supporter relationships, only a fraction of employees feel like tools are maximized. Technology provides a clear opportunity to not only minimize risk for the primary cause of income decline and the ability to raise funds, but also to address the 59 percent of organization’s concerns about retaining and recruiting talent.

Employee replacement rates have been cited to cost one to two times the employee’s annual salary and ongoing performance development opportunities have been proven to boost employee engagement and retention.

Several circumstantial variables remain outside of organizational control and will continue to change this year and in years ahead. Non-profit organizations have a highly effective tool to help manage through this: the opportunity to invest in people. Up-skilling employees, who in turn engage with donors and manage operations, generates energy needed to strengthen the ability to respond and thrive in an ever-changing climate.

By empowering our sector with development opportunities that optimize the use of technologies that extend impact by streamlining processes or customizing the supporter experience, organizations can recognize and reward valuable talent while scaling impact and building strength and agility to thrive within any environment.

Thank you to everyone that took part in our survey therefore allowing us to build this picture of the current landscape of fundraising in Canada. We hope you find the research insightful and useful to benchmark your performance and plan ahead.

We are excited to bring you the very first Status of Canadian Fundraising Report featuring the views and insight of charity professionals working in Canada.

The Status of Canadian Fundraising Report creates a comprehensive view of fundraising in 2022 and provides a unique opportunity for charities looking to benchmark their performance.

The survey on which the report is based was open for three weeks in June and saw over 100 charity professionals take part, answering a number of questions which covered topics including income trends and fundraising targets, digital transformation and collaboration.

We also carried out a number of in-person interviews with fundraising professionals at a broad cross-section of social good organizations around the world. We would like to give special thanks to Mimmo Di Giacomo, Development Director, Animal Free Research UK; Bethany Thomas-Braithwaite, Fundraising Manager, City Hearts; Mike Keech, Head of Fundraising, Marketing and Partnership, Make-a-Wish New Zealand; and, Rich McStraw, Fundraising Manager, Standout.

Our sincere thanks also go to Susie Mullen, freelance data analyst and market researcher, whose help and expert guidance was much appreciated in the production of this report.

Who we spoke to:

  • 60 percent are fundraisers
  • 26 percent are experienced non-managers
  • 29 percent are managers
  • 34 percent are directors
  • 76 percent identify as women
  • 34 percent identify as men

Key Findings:

  • Canadian respondents are more likely than UK and Australians to report that they have exceeded their fundraising targets.
  • More than half of Canadian organizations (53 percent) said they exceeded their fundraising target over the last full financial year.
  • The economy, retaining and recruiting talent and adapting to the post-pandemic fundraising world are the main challenges for organizations.
  • 75 percent said the economic situation is their biggest concern.
  • Larger Canadian organizations ($10M) consider retaining and recruiting talent is as big a challenge for the sector as the current economic situation.
  • 74 percent of large organizations said retaining and recruiting talent is a challenge, while 72 percent said the economy is a challenge.
  • Individual giving is the biggest income stream and 56 percent say it contributes more than it did before the pandemic.
  • Overall, larger organizations report income streams contributing more than they did before the pandemic.
  • A high majority of organizations invest in technology (73 percent), and even more (76 percent) say they understand how technology can help them. However, only 39 percent of organizations say they get the most out of tech. The organizations who say they get the most out of tech and invest in tech also say they are digitally mature, their employees collaborate well together, and they are committed to ESG.

 

SECTION #1: Organizational Income

Despite a difficult few years, 41 percent of respondents said their organizational income has increased in the last year, and only 14 percent said they had experienced a decline in income.

Thinking about the last full financial year, how did your organization’s voluntary income change, compared with the year before?

One quarter of respondents said they did not know how their income had changed compared to the previous year.

Organizations which increased their income are more likely to:

  • have an overall income more than $10M
  • have exceeded fundraising target
  • say individual giving is now contributing more than before the pandemic

Organizations which saw a decrease in income are more likely to:

  • have an overall income of less than $1M
  • have missed their fundraising target
  • say individual giving, corporate and community funding are contributing less than before the pandemic

Fundraising Targets

More than half of organizations (53 percent) reported that they had exceeded their fundraising target last year, with only 12 percent saying they did not reach their target.

Taking a closer look at the 53 percent who exceeded their targets, we can see that these organizations are bigger and more positive about the future. The research shows they are more likely to:

  • have an income more than $10M
  • say income increased
  • be optimistic they’ll meet targets in next 12-18 months

Income Growth and Decline

Of those that saw their income increase, over half (51 percent) said the main reason for this growth was because of exceptional gifts received. This was closely followed by 35 percent attributing growth to their focus on supporter experience, and 33 percent calling out an increase in income due to the pandemic.

This emphasis on supporter experience is interesting – when asked the same question in the UK, only 18 percent of organizations gave this reason for income growth.

The pandemic was given as, by far, the main driver of a decrease in income, followed by:

  • existing supporters giving less
  • organizations not being adequately resourced to grow
  • organizations not having enough people with the right skills

 

Income Streams

Individual giving and grants are the largest source of income for the sector, regardless of charity size.

When asked how income streams have been affected by the pandemic, organizations reported that grants, trusts and foundations, and individual giving are all contributing more now, but event fundraising, community giving and corporate funding are contributing less than pre-pandemic times.

 

Interestingly, larger organizations are most likely to see income streams contributing more post-pandemic.

Income Round-Up

Commented Dan Keyworth, Vice President and Head of Global Customer Success Program: “Over the past two years, the Canadian social good sector has demonstrated tremendous resilience, agility, and creativity in responding to the changing world around us. That remains no less important in the years ahead, and we must continuously evolve to meet combined needs of our causes, beneficiaries, and supporters, whilst collectively elevating our voice to build a better world.

“There will be both winners and losers, too, given the uncertain economic climate; positively, 41 percent said they had seen an increase in income over the last 12 months, with only 14 percent seeing a decline. Time to value matters, with those more able to quickly adapt thriving most, whilst others may struggle. Identifying, building, and stewarding deep meaningful donor relationships whilst lifting the importance of our missions is more important than ever; those charities that did report growth, said this was due to exceptional gifts, and an emphasis on supporter experience. Stability, brand, and trust each matter too, with this research highlighting that organizations that experienced growth more likely to be larger.

“Looking ahead, prudent investment to ensure you can effectively and efficiently raise resources, manage operations, deliver programs, and measure impact, will be pivotal. It is heartening that Canadian organizations are poised to continue to drive more social impact, by individually and collectively being agile, establishing deep and meaningful connections, maximizing the use of digital experiences, and above all connecting and amplifying our causes and the critical role of fundraising.”

 

SECTION #2: Technology

Almost everyone (83 percent) agrees that technology helps improve supporter relationships, 76 percent say they understand generally how technology can help their organization and 73 percent say their organization invests in technology. However, only 56 percent invest in technology, and only 39 percent said they get the most out of their technology.

Taking a closer look at the third of organizations who do get the most out of technology, these organizations no more likely to be big or small in size, but they are more like to be:

  • more collaborative
  • digitally mature
  • committed to ESG

Digital Maturity

We asked respondents to score their organization on a scale of 1-10 regarding their digital maturity. Twenty-nine percent of organizations scored themselves as 8 or above, with only 8 percent scoring a 9 or 10. The average score is 6.2, with 65 percent of organizations scoring 6,7 or 8, and 28 percent scoring 5 or below.

The organizations with low digital maturity scores also tend to:

  • say they do not collaborate well
  • disagree that technology helps to improve supporter experience
  • do not invest in technology
  • do not understand how technology can help
  • do not use data to improve decision making

Tech Round-Up

Commented Marc Roy, Senior Solutions Engineer, Blackbaud: “When we look at what organizations are telling us about technology – it’s so reassuring to see that there is widespread agreement in the benefits of tech. The majority are fully aware that investing in the right technology can truly enhance their organization’s success. However, it is definitely concerning to see that only 1/3 of organizations are getting the most out of their technology. There could be many reasons for this – perhaps time constraints and other priorities are preventing organizations from taking on the training and learning to truly get to grips with their systems. Technology has advanced by leaps and bounds over the last few years, and we want to concentrate on supporting the two thirds of organizations who are not reaching their full potential to really get the most out of their technology and push their fundraising to new levels.”

 

Section #3: Culture and Collaboration

Optimism across the sector is generally high, with a huge 76 percent feeling positive that they will be able to deliver services in the next 12-18 months. However, only half of all organizations said they are optimistic that they will thrive.

Overall, organizations across the sector are willing to understand their supporters, innovate, adapt, collaborate and respond to employee feedback.

Collaboration

We asked respondents to the survey to score themselves on a scale of 1-10 according to how well their organization collaborated where 1 is ‘we work in silos’, and 10 is ‘collaboration across teams and departments is easy and seamless’.

Results show 20 percent of organizations score themselves as an 8 or above on the spectrum, and the average score is 5.9.

Organizations with a higher collaboration score are more likely to:

  • say they are willing to respond to employee feedback
  • take risks
  • say their organization is very/extremely committed to ESG and measure their ESG scores
  • be digitally mature and agree they get the most out of their tech

Organizations with a lower collaboration score are more likely to:

  • say they are unwilling to innovate, adapt to change and collaborate with other similar organizations
  • say their organization is not at all/slightly committed to ESG
  • be digitally immature and do not get the most out of technology, invest in technology, understand how technology can help nor use data to improve decision making

ESG stands for Environmental Social and Governance and refers to the three key factors when measuring the sustainability and ethical impact of an organization.

The Environmental, Social and Governance factors are a subset of non-financial performance indicators which include ethical, sustainable and corporate governance issues such as making sure there are systems in place to ensure accountability, invest in and care for human capital, and managing the corporation’s carbon footprint.

In the survey, we asked respondents to tell us more about their understanding and adoption of ESGs.

How important is it for you to work with an organization that takes its ESG obligations seriously? How committed do you think your organization is to ESG?

Does your organization measure and publish its ESG score?

92 percent reported that they don’t know if their organization measures their ESG score, and of these people, 38 percent are interested in finding out more.

Culture and Collaboration Round-Up

Jasmyn Mason, Director, Human Resources, People and Culture, Blackbaud, commented: “Collaboration is something we take seriously, especially now as employees are located all over the world in our global remote first environment. This starts with creating a culture of trust; building positive environments where teams can bring their authentic selves and know they can ask for help when needed, taking advantage of all available resources for a successful outcome. I think any experienced professional would support the sentiment that the finished product is always stronger when diverse points of view come together. We hear from customers every day about the incredible difference our collaboration makes and the results they can achieve because of how we harness our collective expertise. It’s so inspiring to see that this research shows that the organizations that invest in collaboration are also more digitally mature, more optimistic about the future, more willing to be innovative, demonstrating how powerful it is when we make time to work together.”

 

Section #4 — Challenges and Opportunities

The main concern for the sector is the current economic situation. This was flagged as a concern by 75 percent of respondents.

Retaining and recruiting talent is also identified as major challenge for the sector. Over half of all respondents (59 percent) said this is a big concern for their organization. Interestingly, for larger organizations, retaining and recruiting talent is considered as big a challenge as the troubled economy. For the medium sized organizations, rising costs are the major issue.

Supporter Experience

The research shows continued support for organizations within the sector with 39 percent of organizations say they are gaining more supporters than they are osing, and 60 percent say supporter numbers remain consistent. Only 14 percent of organizations say they are losing more supporters than they are gaining.

The increase in supporter numbers rises dramatically when it comes to organizations who reported an increase in income. Of these organizations, 60 percent said they are gaining more supporters than they are losing.

There is clear agreement that most organizations have clear goals, strategies that are fit for purpose, and prioritize long-term success over short-term goals.

Challenges Round-Up

Commented Ashley Thompson, Director, Blackbaud Institute: “While, for most organizations, the road ahead may feel shaky given the current economic uncertainty, the path forward doesn’t have to be. “Research has shown time and again that, by building successful teams and harnessing the most effective practices, organizations can successfully navigate this—or any other challenges. “As the last few years have shown us, resilient teams will continue to lean in with an unwavering commitment to stewarding their generous supporters, inspiring and broadening their constituent networks, and leveraging best-in-class digital cultivation tactics.”

 

David Benjamin is Executive Vice President, Chief Commercial Officer, Blackbaud.

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