How the Pandemic Changed Fundraising for Nonprofits

A donation appears to be one-sided, yet it is anything but that. In reality, it is an equivalently mutual exchange. Donors support a cause through gifts, sponsorships, cash, and in-kind donations. In return, they receive tax advantages or corporate social responsibility (CSR) evidence, as well as gratitude, appreciation, affiliation, and a certain societal status. The intangible product every nonprofit organization sells is a feeling and a sense of belonging. Feeling good. Feeling responsible. Feeling worthwhile. Being part of an organization or belonging to a group of philanthropic supporters that annually unite at the dinner tables of a benefit gala. 

Classic Fundraising before COVID-19

We are inherently social creatures. That is why live events are much more effective than other, less social fundraising methods. Mingling with like-minded for cocktails and culture at a benefit concert or joining friends for dinner and dance at a charity gala is a “feeling good” way to raise money for a cause and, for the nonprofit, an excellent opportunity to forge close relationships with private and corporate sponsors. Live and silent auctions add zest by offering a wealth of unique experiences and items usually unavailable on the open market. The lucky one who bid and purchased a dinner with a celebrity, an autographed guitar of a famous musician, or a professional player’s one-on-one session on the basketball court continues to feel good far beyond the event. 

Until COVID-19, the primary fundraising strategy was to engage influential people who naturally come across people of means or have connections through their social and professional environment. After all, selling the feeling of “feeling good" works best through a personal connection. Whether festive or sportive, a benefit event is generally the biggest event of the year for a charitable organization, requiring the most work and yielding the most substantial part of the annual proceeds. Naturally, these events are limited by the venue (and thus accessible only for a relatively exclusive group of people), the sphere of action (primarily the local community), and the time factor (once a year). 

Before the pandemic, digital channels were mainly used to support a major fundraiser or communicate organizational information. Asking a potential high-impact donor digitally to pledge a significant amount for a capital campaign would have been considered a terrible faux pas. Although FACEBOOK and INSTAGRAM (recently even SNAPCHAT) have provided donation buttons for many years, most nonprofits preferred to link their social media followers directly to their websites to make a donation or buy a ticket. Likewise, push emails and mobile initiatives accompanied major campaigns, announcing printed invitations or reminding that ticket sales had started. 

One of the few pre-Covid digital fundraisers was GIVING TUESDAY, a global movement/organization founded in 2012, which raised $510+ million in the U.S. in 2019 and reached 54% of all donors. AMAZON SMILE was another all-year digital fundraising tool instituted long before the pandemic. Although not widely used since many nonprofits consider 0.5% of a shopper’s purchases way too little to make the effort of promoting, the grant-giving foundation has donated $270+ million since its launch in 2013 but unfortunately ended its activity in 2023.

COVID-19 and the Digital Transformation

The pandemic-induced lockdown and social distancing closed all communication channels and fundraising campaigns based on people’s immediate company. As a result, 88% of all charities canceled or postponed their major fundraising events and explored digital fundraising possibilities. Virtual reality became our new reality.

The biggest challenge was the ad-hoc conversion from live interaction to digital communication and fundraising. However, nonprofits and technology quickly pivoted forward and took ingenuity to the next level, expanding their virtual categories and embracing and adopting new digital channels and tools.

Video conferences and recording platforms became accessible to the broader population, enabling even the smallest nonprofit to host virtual special events and invite a potential target group to a ZOOM Trivial Pursuit evening or a SKYPE happy hour. Fitness tracking apps empowered participants to virtually document and communicate their progress in virtual sports competitions, fun runs, and A-thons. GIVING TUESDAY responded to the crisis by originating a special COVID-19 GIVING TUESDAY event in March, yielding approximately $503 million in online donations in the U.S. This inspired many nonprofits to develop their individual Giving Day.

Followers turned to online crowdfunding platforms like FACEBOOK to support one of the 750,000+ listed nonprofit organizations through free donation campaigns like the “birthday fundraiser.” Other staunch supporters advocated for and collected donations for their favorite nonprofit through online peer-to-peer fundraising. This personal outreach, friend to friend, often leads to higher results and, simultaneously, unburdens the nonprofit operationally as the fundraising work is shifted to the private network of its stakeholders. Online auction platforms like Charitybuzz, known for their large number of international high-net-worth bidders, doubled down on virtual experiences, increased their inventory, and auctioned off 24/7 to raise essential funding for their charitable organizations. 

From virtual quiz events to partnerships with restaurants, the possibility of melting down jewelry for a good cause, or new concepts like teaching children at dinner about charity and inspiring them to make microdonations - new online fundraising tools keep popping up like mushrooms. 

Fundraising in the Digital Age

Virtual reality might not be able to replicate the atmosphere of cocktails, dancing, and fireworks. After all, personal interaction and communication are our human nature, and “feeling good” simply feels better when shared in person. Therefore, many organizations have fully swung back to classic fundraising methods.

Nevertheless, the digital transformation has happened. Reverting back to the status quo means squandering the momentum and missing out on a macro trend. COVID-19 has ushered us into digital normality and accelerated the adoption of digital tools. It has enriched fundraising, opened the horizon of philanthropy to a new world without limits, and transformed our communication culture. Before the pandemic, asking a potential donor for a seven-figure donation via a computer screen would have been unthinkable. 

Besides that, virtual activities cost significantly less than any live event - provided nonprofits overcome their natural hesitancy to invest in strategy, infrastructure, and staff. While live fundraising requires personal connections and an influential social circle, the successful conception and implementation of digital fundraising strategies and online campaigns demand technology, research and data, and people with the necessary expertise. 

Digital fundraising might not bring in single high-digit donations (though it might). Still, it pushes the boundaries of the classical, once or twice-a-year fundraising event, local venue, or carefully selected crowd. It makes philanthropy and the feeling of “feeling good” available to anybody, anywhere, and anytime, thus creating a second revenue stream, like many drops make a river. 

Those charitable organizations who understand that the shift to digital fundraising methods will continue to dominate the post-pandemic world will be ahead of the curve within their industry by driving a two-pronged strategy of both classical and digital fundraising.