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In Part I, we looked at the type of marketing challenges nonprofits are facing, and how we could improve the landscape in 2025. Today, I’m taking a second look at some of the challenges nonprofits face in 2025, and not just in marketing. Also, what strategies are there that might combat them?
What nonprofits are up against this year is a decrease in donations with the cost of living crisis taking its toll across 2023 and 2024. At the beginning of 2023, the Charities Aid Foundation reported that “Nearly four million fewer people were donating to charity during the peak pre-Christmas period – a crucial time for charity fundraising.” And in 2024, one in five charities said they had to cut back on the amount of services they offered due to rising costs.
Although we're not quite out of the woods yet, things are improving for nonprofits in 2025.
Inflation, according to the Big Issue, "decreased to 2.5% in the year to December 2024, from the 2.6% rate seen in November," but it was still higher than the B of E's target inflation rate of 2%. Regretfully, the UK was ranked lower among the top 20 most-giving nations. People have less money to spend and even less to donate when there is a cost of living crisis, which affects charity services. Ironically, more philanthropy is required as a result of the crisis.
That’s not to say there aren’t some positives. We are slowly starting to see recovery, matched by how much the public trusts nonprofits and charities in comparison to other institutions according to Charity Digital. And charities are slowly waking up to the fact they need to modernize and start utilizing newer technology.
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A decline in donations and a lack of trust in philanthropy is a big challenge in the US
In the US, nonprofits have their own set of issues aside from the same decline as the UK has experienced in donations but are also experiencing a lack of trust in philanthropy in general according to the Dorothy A Johnson Centre. There’s also a major new tax code to contend with which will result in ‘significant changes’ to nonprofits in the coming year. Again, their fortunes could take an about turn in the coming months.
All charities wherever they are, either in Europe or the US are struggling to retain staff, battling with operational costs and having to cut back on budgets.
Increased competition is a challenge, coming from bigger better-known charities and new ones coming up on the horizon.
This means they’re constantly battling funding priorities and if they’re up against bigger, better-known charities, they could come bottom of the list when funding is being handed out.
Advanced technology, and more potential donors spending more time online, means charities need to update their technology skills and provide access to online donating rather than relying on the old school standing on the street corner collecting money as people pass by.
AI donor engagement, research, retaining staff, and creating strategies to innovate
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There is a call for AI donor engagement, but while AI is great for planning, and research (which must be meticulously fact-checked before use), I’m not a big fan of the idea of using it to gain donor engagement. The ‘human-to-human connection’ may become a boring cliche in the months and years to come, but phrases become cliches because there’s usually some truth in them.
Use AI, by all means, to research. And train your staff to use AI responsibly and effectively, It will become more prevalent over time. However, don’t rely on it too heavily. Speaking to your audience and treating them with the respect they deserve, like fellow humans will be the best way to garner donations and investment.
Getting staff and keeping them might be difficult, but not impossible to overcome, the best people are out there and creating strategies that help build teams that are up for the fight ahead. NO quality staff means no strategy or innovation.
Equality, inclusion and diversity, and digital engagement for online donations
Equality and inclusion are more important now than it ever has been as younger generations want greater transparency. Younger people will be inclined towards digital engagement rather than street collections, also couple this with the fact that the high street, in the UK at least, is suffering a decline, so fewer people are available to attract in terms of making donations.
To summarise, let’s look at how we can tackle some of the most pressing issues facing nonprofits in 2025.
Again, as mentioned before, a bigger emphasis on storytelling and making sure you have a well-designed website with a strong presence
Try utilizing digital platforms for online donations instead of relying on pounding the street. Make it as pain-free and as easy as you can make it. Nobody needs a difficult journey to donate, they’ll go elsewhere.
So you need to consider:
A good website with great copy will bring your readers to the page (copy always comes first before the website). Consider capturing your readers with great ‘sticky’ headlines and Calls to Action (CTAs) that move your readers to action
Provide well-written, well-set-out case studies that explain the good your charity does, providing information on how you help your users. Finish with a CTA inviting them to be a part of your charities’ future
Provide articles that set out clearly how you’re developing as a nonprofit, what your goals are, and how you’re doing. Providing updates can help your readers to create a picture of what you stand for and why you’re doing what you do
Utilize social media to spread the word, posting your latest case studies, articles, and any news or updates on how you're doing.
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