German Fundraising Association's donation monitor 2023 - a commentary by Christian Schipp and Thomas Lewandowski
Overall, the German Fundraising Association's Donation Monitor is an important tool for understanding and analysing donation behaviour in Germany. It provides fundraising organisations with valuable data and insights to adapt and optimise their strategies and campaigns accordingly. This year, the climate for donations is less favourable. We try to classify this & present solutions for organisations.
500 million euros fewer donations!
The study was based on an online panel survey of 5,049 internet users aged between 16 and 70.The fieldwork took place from 25 October to 25 November 2023. The following results can be summarised from the survey:
- Donation participation in 2023 was 48.6% of the population, a decrease of 8.8% compared to the previous year, when it was 53.3%.
- The average donation amount in the last 12 months was around 170 euros. Donation amounts varied, with the largest proportion of donors giving amounts between 50 and 250 euros (78.9% of all donations).
- The total amount of donations in 2023 was approximately 5.8 billion euros. This is a decrease of 500 million euros or 6 % compared to the previous year, when the total amount was 6.3 billion euros.
- If the total amount of donations (EUR 5.8 billion) is divided by the average donation amount (EUR 170), this results in around 34.12 million donation transactions (statistical value).
What are the reasons?
The reasons why people in Germany may have donated less last year are varied and depend on various social, economic and personal factors.Some of the main reasons could be
Economic Uncertainty
Economic uncertainty and financial stress, possibly exacerbated by the consequences of the COVID-19 pandemic, inflation or geopolitical tensions, could lead to people being more cautious with their spending and having less money available for donations.
Change in Priorities
People's priorities can change, especially in uncertain times. This can lead them to rethink their spending and possibly donate less to charity.
Donation fatigue
Possible donation fatigue, which can be caused by a flood of donation requests or negative news about mismanagement or scandals in some organizations, could also lead to a decline in the willingness to donate.
Demographic changes
Changes in the population structure and in the donation behaviour of different age groups can also play a role.
Challenges for non-profit organisations in the current environment: strategic responses and solutions
Non-profit organisations face a multitude of challenges that they must meet with strategic flexibility and innovation. This is the only way they can fulfil their missions sustainably.
Funding and resource procurement
In an environment of declining donations and increased demand for funding, sustainable financing is crucial. Creative fundraising strategies are required to diversify sources of funding.
Adapting to digitalisation
Digital tools and skills are essential. The modernisation of processes and the use of digital tools for communication and fundraising are necessary.
Economic uncertainty
Factors such as inflation and global conflicts affect the willingness to donate and the stability of nonprofits.
Transparency and accountability
Increasing expectations of transparency require organisations to clearly document and communicate their effectiveness.
Demographic change
Adapting to different generational donation behaviour is crucial.
Changing priorities and needs
Constant adaptation of programmes to changing social and environmental challenges.
Competition and market saturation
The growing number of non-profits is increasing competition for resources and attention.
Employee retention and development
Retaining and developing qualified employees is a challenge in a sector with limited resources.
Are organisations (NPOs) ready for change?
In the profit sector, a similar initial situation would normally lead to a consolidation of providers. Companies would invest more in increasing efficiency and profitability.
In contrast, we are seeing the opposite trend in non-profit organisations. The number of organisations competing for donations is constantly increasing. Many of these organisations are small and hardly have the necessary means and resources to organise themselves effectively. As a result, competition is increasing without a corresponding increase in efficiency being achieved.
"With rising costs and falling revenues, the pressure to increase efficiency is growing. This can only be achieved with a fundamental transformation and digitalisation strategy."
Christian Schipp, CBDM Ambit Group
Digital transformation: more than just purchasing tools.
Many medium-sized and larger NPOs have not yet taken the step towards a holistic digital transformation. Although there are many "tool projects" at the operational level, the decision-makers of the organisations are not sufficiently concerned with the comprehensive transformation of the necessary framework conditions (strategy, goals, organisational development, resources, decisions). This underestimates the fact that digitalisation is developing exponentially in the market and the demands that organisations are facing in areas such as fundraising, membership management, volunteering and much more.
Exponential growth in the digital era: the influence of AI
A prime example of the need for change is the increasing use of artificial intelligence (AI) in fundraising. Over the next 2-4 years, AI will have a profound impact on fundraising and fundamentally change processes and data processing. Despite the recognised challenges, there is often a lack of maturity and resources to tackle these changes. Unfortunately, the active involvement of the management level for necessary investments often fails to materialise. Current figures from the Donations Barometer highlight changes that are already underway. It is obvious that simply explaining the negative developments by increased costs does not go far enough.
Digital transformation at NPOs: rethinking at a strategic level
The digital transformation in non-profit organisations requires a rethink at a strategic level as well as an active engagement with new technologies and requirements. The willingness of management to make investments and adapt to digital change will be decisive for long-term success and increased efficiency.
The need for strategic transformation
The current challenges require comprehensive transformation and digitalisation. In many NPOs, a classic, silo-like organisational structure still prevails, in which internal needs are at the forefront.
Without prior engagement with data, processes and the target group, internal assessments lead to inconsistent requirements. In addition, there is often a lack of understanding of digital solutions, as many employees are only familiar with outdated systems.
The key to successful transformation
The transformation should begin at a strategic level and derive a digitalisation strategy that integrates cloud/IT strategies and future organisational development. It is important to prepare everyone involved for changes and to clarify the framework conditions.
A goal-oriented examination of processes and organisation, taking into account future requirements for automation, new channels and interaction platforms, is essential. Collaboration with implementation partners, consultants and industry experts is crucial to success.
These results can be used to develop the blueprint for the future solution, including the data model, platform and solution design, interfaces and security measures. This forms the basis for an agile implementation of the transformation that progresses gradually and effectively, supported by monitoring and steering committees for precise realisation of ambitions down to the last detail.
Ambit Group: Your partner for the digital transformation of NPOs
At the Ambit Group, we have made it our mission to support NPOs in their individual digital transformation.
Our dedicated NPO team, led by Thomas Lewandowski, advises and implements organisations at process and data level and implements future solutions on the Microsoft Cloud for Nonprofits.
We have developed solutions and localisations specifically for the German and Swiss markets. These have already been implemented at various organisations.
Further information
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Are you interested in this topic? I would be pleased to answer any queries you have.
Christian Schipp, Chief Business Development Officer
christian.schipp@!ambit-group.com
+41 79 954 17 09
