Canadian nonprofits are facing economic challenges and new multichannel marketing opportunities. While there is strong evidence of a post-recession recovery in charitable giving, issues in Canada’s energy economy and diversifying donor bases require nonprofits to optimize fundraising activities.
2015 Canadian fundraising outlook
The nonprofit economy contributes 8.1 percent to Canadian GDP, a share of the economy that is 50 percent larger than in the US. Canadian charities do a lot with a relatively small population. They produce $14.6 billion in annual revenue from a donor base of just 15.6 million.
The average Canadian donor supports between five and seven causes annually. In recent years, the “graying” of Canada’s population has changed the donation landscape substantially. The share of total revenue from donors aged 45 to 64 has grown each year since the millennium. The proportion of total revenue from 35- to 44- year-olds continues to decline, a study by The Globe and Mail shows.
It’s a recovery, not a boom
Following the end of the recession, Canadian nonprofits lag US peers in revenue growth and the number of organizations meeting annual budgets. 66 percent of Canadian charities satisfied annual budgets compared with 73 percent of U.S. peers, according to a recent study by the Nonprofit Research Collaborative (NRC).
“With generally strong giving across the board fundraisers report more concerns about specific local economies and issues,” said Eva Aldrich, President and CEO of CFRE International, a sponsor of the NRC study.
Canadian fundraising performance is partly linked to the impact of historically low oil prices on local economies.
Charitable tax deduction gets slashed in Alberta
For Canadian charities, lower oil prices translate into a projected $40 million loss for the nonprofit economy, according to Brian Emmett, the Chief Economist for Canada’s Charitable and Nonprofit Sector.
“At the most general level, falling oil prices are estimated to depress economic activity in Canada,” Emmett wrote in a recent blog for Imagine Canada.
In Alberta, Canada’s leading oil-producing province, the government issued a 2015 Fiscal Plan that slashes the charitable tax deduction for gifts over $200 from 21 percent to 12.75 percent.
Canada’s Association of Fundraising Professionals (AFP) plans to engage the government of Alberta to oppose the cut.
“Given the economic environment over the past several years, it would be extremely short-sighted for the government to reduce the tax credit so drastically,” said Andrea McManus, CFRE, chair of the AFP Canadian Government Relations Committee. “We’ve got to grow the number of Canadians who give—that’s crucial to a healthy nonprofit sector.
What do Canadian donors want?
A healthy nonprofit sector requires fundraisers to focus on donor-centric practices, now more than ever. A survey of “What Canadian Donors Want,” commissioned by the AFP Foundation for Philanthropy, provides three key insights:
- Donors want to be thanked both by email and traditional mail. The number of donors who expect an email thank you (32 percent) rose significantly over the past few years.
- Statistical analysis revealed that donors are more likely to support a charity in the future if the donors believes the charity “is successful at fulfilling its mandate.”
- It is essential to give donors feedback showing how their gift makes a difference; however, 31 percent of donors said they received no feedback from charities on how their donation made a difference. Only 25 percent were informed about impact by mail and 7 percent by email. Only 3 percent of donors said their tax receipt provided proof of charitable impact.
Innovairre solutions help Canadian nonprofits prosper
Industry metrics, demographics, and local economic conditions support increased investments in measures that drive long-term value. Direct marketing practices designed to increase donor loyalty are the strongest tactics to deploy in the Canadian market in 2015.
E-Receipts turn the obligatory tax receipt into a powerful donor engagement and cultivation opportunity
- The number of donors who expect to be thanked by email is rising rapidly; e-Receipts help bridge the gap for direct mail donors.
- See the number of donors who open and view their tax receipt, while reducing your overall receipting costs.
- Personalize the receipt experience using fully variable text and imagery for each donor.
Personalized video informs, entertains, and engages donors like never before
- Say thank you faster and more authentically using video tailored to each donor at an individual level.
- Showing donors how their gift makes a difference is a key driver of repeat giving.
The Donor2 platform helps Canadian nonprofits keep more new donors for greater lifetime value
- Tailoring messaging for new supporters acquired through face-to-face, direct mail, and online channels can be costly and complex
- Donor2 is a series of nine steps in eight weeks that makes it easy to say thank you, communicate impact, and generate additional gifts.
- The ROI is outstanding, especially for Canadian nonprofits challenged by limited acquisition list universes.
– Adam Freedgood is a retention and sustainable marketing expert and a guest contributor to Innovairre Communications, which supports more than 500 nonprofit organizations around the world. For more information about successful data strategies, contact us at Answers@Innovairre.com. Follow us on LinkedIn and Twitter.