Trends in Healthcare Philanthropy Reveal the Need to Focus on Donor Retention
2020 brought an inflection point in history that is providing an exponential opportunity for healthcare philanthropy. We saw healthcare become universally top-of-mind, influencing individuals to shift to more intentional giving and adopt online fundraising.
These trends offer healthcare organizations the opportunity to grow this donor support through stewardship and retention.
Let’s start with the trends in healthcare fundraising
Analysis of Blackbaud Raiser’s Edge NXT® data from U.S. healthcare organizations that raised more than $1M in at least one of the past three calendar years reveals three main trends:
- Trend: Outpouring of Support
Community hospitals experienced a surge in goodwill, resulting in an influx of in-kind donations, largely coordinated by hospital foundation staff who stepped up to help in any way possible.
- Healthcare organizations raised $4.9B in cash in 2020, a year-over-year increase of 2.7%
- In-kind donations to healthcare organizations topped $170M, increasing by 61% in 2020
- Trend: Fewer Donors, Larger Gifts
Since 2011, the Blackbaud Institute has continued to see a decline in number of households donating, but an increase in total donations. This trend was accelerated in 2020.
- 75% of healthcare organizations received fewer donations in 2020 than in 2019.
- 46% of healthcare organizations increased dollars raised in 2020.
- Trend: Online Fundraising Explodes
Healthcare fundraisers were among the first to be shifted to remote work and may continue to rely on virtual meetings and donor tours into the future, accelerating the idea of e-philanthropy—a full strategy shift to a virtual mindset.
- 7% year-over-year increase in online revenue for healthcare organizations
- 66% retention rate for multi-year, online-only donors
Dig deeper into the data in this on-demand webinar: 2020 Trends in Healthcare Fundraising that Present Opportunities for 2021
All signs point to donor retention
This influx of new donors and shift to more intentional giving is really a growing call to prioritize donor retention. With purposeful stewardship, you can convert these new and upgraded donors to long-term supporters and, by demonstrating the value of giving to your healthcare organization, you can cultivate and grow intentional gifts.
Over the past 15 years (through 2020), Blackbaud Raiser’s Edge NXT data shows that overall retention in the healthcare sector has inched upward, though it is still consistently one of the lowest donor retention rates by sector, offering fundraisers a huge opportunity for improvement.
Donor retention is much stronger for multi-year, online-only donors. According to the Blackbaud Institute 2020 Charitable Giving Report, the retention rate for these donors is 66%. The first-year, online-only donor retention rate is 25%. This really points to a multi-channel approach of stewardship, and shows the need for healthcare organizations to build recurring monthly donor programs, which gain significantly greater value than acquiring replacement donors.
Visualize the data in this new Healthcare Fundraising Trends infographic.
Focus on donor stewardship
I challenge you to rethink change and embrace the opportunity to focus on stewardship within your organization.
Leveraging moves management best practices is one of the best ways to retain and steward these donors and where possible, move them up in their giving. If you have a strong moves management program, then you are already in great shape and should double down on what you are doing well. If you feel like your moves management program could be stronger, use this data to make the case.
With the data reinforcing your focus on major donors, be sure to have thoughtful stewardship plans for your next generation of major donors. For example, $1,000 Gen X and Millennial donors are great prospects for larger commitments. Create special stewardship opportunities, like a mid-level giving society, so they are primed when the time comes.
As part of your stewardship plan, include impact reports and balance statements, which give donors confidence their gift is used as intended and increase their likelihood to give again. Work with your finance team to use this information.
Many “COVID donors” were new donors to healthcare or made in-kind gifts. Use predictive modeling to better understand them and craft appropriate stewardship plans.
These donors need to see how their donations benefitted the community and understand how they can partner with your organization, whether it is financially, as a volunteer, or in another capacity. The donors who are intentionally giving to you need to feel really good about their association with your organization. For healthcare in particular, use the amazing stories you have to tell, knowing that with COVID, they’re that much more amplified.
There are incredible opportunities for healthcare fundraisers and I am excited to see what 2021 brings!