The Intersectionality of Presidential & Controversial Elections in Fundraising
Let’s face it, it’s a question that comes up in the minds of fundraisers every four years … and with another charged Presidential Election cycle underway, here we are again asking … how will this election impact charitable giving?
The concerns themselves are warranted and it is right for us to look to the environment and the headlines to understand what might be top of mind for donors … and this year, there is no shortage of headline domination … from the political environment … to the global humanitarian crises.
That said, when we turn to historic data, we not only find evidence that previous Presidential Elections likely had little to no negative impact on charitable giving, but a detailed study of the 2012 election showed charitable giving increased among political donors that year. We know this runs contrary to public opinion, so read on to see how the data proved otherwise.
Now before you celebrate, does that mean there’s no need to freak out about your fundraising results this fall? Not so fast.
One look at your inbox and mailbox today – or even just a minute scrolling through your social media feeds – will no doubt show you how heightened the competition is already, and that’s only going to go up from here.
But it does mean that we can do what fundraisers do best. We can rely on historical data to help proactively predict what we may see to optimize our strategies and messaging to cut through the noise and keep fundraising dollars intact during this election year, and beyond.
Our team has taken the time to pull together data from several trusted industry sources, and we’ve summarized the findings and recommendations based on those findings.
Don’t have time to read the whole article? We get it – here are the key takeaways…
1. On their own, Presidential Elections do not appear to negatively impact charitable giving.
2. Donors who give both politically & philanthropically, may give more around elections.
3. Non-profits missions closely aligned with top campaign issues can capitalize on increased awareness.
The Data
Before we jump into specifics about elections, we must first acknowledge the impact the economy has on charitable giving. (For even more detail see an earlier post by Erica O’Brien: A Look Ahead)
Giving USA provides an annual report on giving [1], which includes long-term charts of both charitable giving as well as the Gross Domestic Product (GDP).
A quick look at both charts shows us that in 9 of the last 10 Presidential Election years, charitable giving increased over the previous year, with the GDP trending accordingly.
The one Presidential Election year to report a year-over-year decline was 2008, which was the second year of the Global Financial Crisis.
Naturally, the fact that there was a drop in giving that aligned with the elections that year begged the question as to whether the election caused the decrease. So, four years later, our friends at Blackbaud conducted a targeted study using the data around the 2012 Presidential Election [2], reporting the following:
While philanthropic giving between 2011 and 2012 increased, it was primarily driven by an increase in religious gifts.
Aside from a smaller year-over-year increase in gifts to education, all other sectors reported a slight decrease between 2011 and 2012.
Donors that did not give political contributions in 2012, likewise saw a 2% drop in their charitable giving, aligning with most sectors.
However, among those donors that gave political contributions in 2012, their charitable contributions increased about 1% that same year.
So, what’s that phrase we heard first from James Carville in 1992 – it’s the economy stupid? Yeah, it looks when we’re looking back at 2008, and all data supporting other election cycles, like it could be more about the economy than the elections themselves.
What we also cannot lose sight of is that the economy is typically a top issue when it comes to the election, so they are closely linked. However, in recent years other issues have taken center-stage that may have threatened to shift voter and donor attention away from this trend, with issues running from social security reform, terrorism, climate change, pro-choice vs pro-life, and so many others.
So, if data suggests that philanthropic giving around elections is not as suppressed as we may worry … does the data tell us anything about how key issues of the day might come into play?
Studies by other institutions have focused on what impact, if any, the issues have had on philanthropic giving [3]. Findings from these studies indicated that nonprofits whose missions are more closely aligned to the ideology of the winning candidate tended to see little to no drop in giving in the year of the election. While non-profits with missions aligning closely with the losing candidate often reported sizeable increases. And for the record, you read that right, we said “in the year of the election”. Keep in mind that year-end is a major factor for most organizations, so the timing of a November 5th election is significant. “Rage Giving”, as first coined by the media following the 2016 election, is a reality, and data from our own Fuse clients generally conform to these findings.
The most recent election cycle (2020) may well have been our best opportunity to validate all these findings - however, there’s just one problem. The pandemic. Philanthropic giving began to increase in April 2020, peaking for most just one year later. This meant giving around November 2020 was up significantly, making it difficult to discern the impacts of the election from that of COVID-19. But we all know that trending the last two years has been down, and though performance has been stabilizing across the industry, this next election may well finally put to rest these findings.
So that leaves us proceeding with caution – especially because while there may not be natural revenue declines associated with the election specifically, there are most certainly cost implications – especially on television and digital channels – that could lead to revenue impacts down the road (more on that to come).
WHAT DOES THIS MEAN FOR 2024?
So glad you asked. Based on our learnings, let’s start first with the economy. Leading up to 2024 experts were debating whether we would enter another recession, with most of them predicting stable inflation or better. And back in December the Feds indicated there would be at least one rate cut, with the potential for as many as 3 throughout this year. Yet during a recent press conference on May 1st, Chair Powell said, “In recent months inflation has shown a lack of further progress towards our 2% objective”, and “It is likely that gaining greater confidence will take longer than previously expected.” He did, however, also share he thought inflation would eventually settle down throughout the year.
Next, we look at industry trends. Since peaking during the pandemic, trends have been on a steady decline. That said, as we progressed throughout 2023, year-over-year comparisons on key metrics got better with each quarter. And while the industry still reported a decrease in donors, gifts and revenue on the year, YoY Q4 specific comparisons were a bit more optimistic, as average gift, gifts per donor and revenue were all up.
All said, while current trends and future forecasts could be better, we maintain an element of optimism – but a lot will depend on what happens with the economy in the coming months.
PREPARING FOR THE NEXT FEW MONTHS
So, the data tells us donors are not likely to divert their charitable giving to give politically, but we will likely feel the impact should messaging around the economy continue to go south.
It is important, if you haven’t already, to understand what a potential drop in performance in the second half of 2024 could look like for your fiscal year, and beyond. Take a look at some different scenarios that look at various performance reductions to get an idea on what strategic pivots may need to be made should results start to trend in that direction.
Based on those scenarios, establish key milestones for the next several months for when strategic pivots may need to be made for the program.
A few thoughts that may help get you started in your planning:
Keep your pillar campaigns intact leading up to and into the fall but avoid November 5.
Avoid sending emails on election day and move up some of your fall direct mail campaigns if you can so that they are landing in homes a few weeks before the election.
Keep your messaging relevant with a genuine sense of urgency.
Meet donors where they are and acknowledge the environment we are living in today and how what we are facing makes the need for donor support of your mission even more critical. (Note: This is especially true when it comes to the economy – higher costs mean more funds required to provide the same mission support/programs – don’t forget to make that connection for your donors while at the same time not reminding them that their own wallets might feel tighter.)
Look at your testing plans and determine what is most important.
Ensure that anything you’re testing this year will be repeatable and isn’t so tied to this moment in time that there is no way to act on findings for the future.
Avoid the urge to test if there aren’t critical learnings you need during this time period. Now is the time to limit risk where you can.
Keep pushing out other ways to give (DAFs, etc.)
This is especially important at year end – and remember, there is no political competition for these dollars based on tax laws.
Remember that any cuts you make to acquisition during this time period mean fewer donors going into 2025 and the impact of those decisions will follow your program for the next several years.
Monitor your investment – especially in digital channels – with costs increasing and expected to remain high through the end of this year, plan on how you allocate your budget.
If your budget is limited – focus only on conversions efforts from October through December to ensure revenue goals remain top priority.
Have a post-election plan and be prepared to enact it depending on the scenario (and don’t forget a very likely scenario could be we don’t know the results on November 6th …)
How will you message to donors following the election?
How will you update your messaging at key moments like Giving Tuesday and Year End to make it more relevant based on results (or pending results) of the election, and what are key dates associated with making those pivots?
Assume that you will need until after the election to finalize any messaging strategies for 2025 so that you can proactively plan for pivots and a chaotic content development time period.
The most important thing we can do as we plan for the next several months is be prepared for what may come and stay the course.
If you’re looking for some recommendations and insights on your plans for the next several months, especially leading up to the all-important year-end giving season that directly follows the election, we are here to help! Reach out to CourtneyL@fusefundraising.com and we can schedule some time to chat.
Footnotes
[1] Giving USA 2023: The Annual Report on Philanthropy in 2022
[2] Blackbaud Giving in an Election: How Political Giving Impacts Nonprofit Support
[3] The Chronicle of Philanthropy: Was the “Trump Bump” a One-Time Phenomenon to Charities
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