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Rhea Wong
Hey you, it's Rhea Wong.
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If you're listening to Nonprofit Load On, I'm pretty sure that you'd love my weekly newsletter. Every Tuesday morning you get updates on the newest podcast episodes and then interspersed we have fun special invitations for newsletter subscribers only and fundraising inspo because I know what it feels like to be in the trenches alone. On top of that, you get cute dog photos. Best of all, it is free.
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So what are you waiting for?
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Head over to riawong.com now to sign up.
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Foreign.
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Welcome to Nonprofit Lowdown.
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I'm your host, Rhea Wong. Hey podcast listeners, it's Rhea Wong with Nonprofit Lowdown.
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Today.
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I'm talking about something that is really sticking to my crawl. Call it a public service announcement if you will, but a couple weeks ago I happened to peruse study that the center for Effective Philanthropy put out in February 2026 and y', all, I cannot unsee what I saw in that data. So today is a public service announcement. If you are listening to this and you do not have a major gift program, or you have a major gift program that is underperforming, or you don't have an individual giving program at all, I want you to listen to this very, very carefully because I'm hoping that by the end of this webinar you will at least be convinced that this is an area that you should be focused on. Now let's talk about where we are right now. It is the middle of 2026, friends. I don't think it is an exaggeration to say that it has been a time out here. We are seeing inflation out of control. We've been seeing all sorts of conflict both domestically and internationally. The price of gas is skyrocketing. Right now we're sitting under a heat dome. Federal money is being pulled back, foundations are pulling back. And at the same time we are seeing unprecedented levels of need for the services that we offer. So what is happening, friends? What that all means is people are tired. People are burning out. According to this data, 46% of CEOs reporting burnout, which is up from 30% last year. What is also happening out here is that 60% of these nonprofit surveys say that foundation grants are harder to secure than they ever have been before. I was speaking to a friend of mine at a very large and well known foundation. He is not going to be me, but he also affirmed that in fact, especially for smaller nonprofits, so let's say under a million dollars, the foundation funding field is harder to get simply because bigger foundations are relying on intermediaries to make recommendations for grants. People are looking at scale. The entire sector is consolidating. So if you are out here as a smaller nonprofit, you are competing for, you are in a more competitive landscape. You're competing with E more than ever. You're competing with more nonprofits than ever for a shrinking pie. The other thing that they cited was that 39% of nonprofits that they surveyed ended E5 in a deficit. That is up from 22% that ended in a deficit in 2022. We're also seeing that a lot of the EDs are spending 40% of their effort on foundations, which are only resulting in 20% return on revenue. On the flip side, though, major gifts have a potential huge upside. They could be 60%, 60% of revenue, but they're getting 20% of the effort. So let's talk about where the money actually is, because I know it's hard when you're out here in the, in these charity streets. As we say, all you need, you're just thinking about where the money is going to come from. I, once upon a time was an ED. I know that 4am Cold sweat that you wake up and your heart is racing because you're worried about payroll, you're worried about the next quarter, you're worried if we're going to be able to. To expand and serve the people who need us. I understand that completely. So let's talk about where the money actually is in terms of foundations. As I said before, 60% of nonprofit surveys said that it was harder to secure grants than it has been in previous years. 44% of them saw a reduction in funding from their funders. And 56% of the organizations that ended the year in a deficit cite lower than expected foundation revenue. Now, that is not all of the bad news, unfortunately. We all also know that government funding has been cut. And government funding has been most vulnerable to the vicissitudes of political opinion. Of the nonprofit survey, 33 of them, 33% of them were seeing cuts from federal, state or local government. Now let's talk about individual major gifts. Anybody who is familiar with the Giving USA statistics note that 74% of overall giving came from individuals, both a mixture of direct individuals and bequests. Now, let's dig that into that a little bit deeper. Major gifts, and by that I'm, I'm referring to gifts that are $5,000 and up grew modestly. And why that is interesting and relevant is that every other donor segment declined in 2025. So that meant your small dollar individual donor, your small dollar annual donors are mid tier. Why is that? Because with all of the different pressures that we are under economically, the people who are likely to be your smaller dollar givers are disproportionately affected by things like inflation, gas prices. Now, on the flip side, super sized donors, so these are donors who are 50k and over now account for half of all nonprofit revenue. What we're seeing in the individual giving phase is not even an 80 20, it's more like a 90 10, which is that 10% of the givers are responsible for 90% of the overall number given. When we look at the organizations that have reported surplus from versus ones that reported deficit, we see a pattern. The organizations with the surplus, 40% of them said that they got higher than expected individual giving at the end of 2025 and the ones that ended in deficit, 6% cite lower than expected foundation revenue. Now sit with that for a second. Where we see the growth and more of the sustainability were the organizations that prioritize and built systems around individual giving. The other piece that I want to flag here is the wealth concentration. So high net worth households are giving 30% more than they did the previous year. So they're giving bigger gifts. How? When we dig into this, what we're seeing is that households are giving, are participating less overall. So in 2025, 80 these households reported giving to charity compared with 91% teen. We can point to a lot of different issues. One might be the secularization of our society, but typically what that means is that we are looking at bigger gifts from a smaller number of households. Some other trends that I think are probably some other trends that are relevant is that high net worth individuals are giving 30% more overall, so they're giving bigger gifts. However, they're participating less overall. So what I mean by that is that affluent households included in this survey fell from 91% to 81% of households giving to charities in nine years. So the translation for you is that there are fewer people giving bigger gifts to to organizations that they choose. Let's dig into a little bit of what the winning organizations did. The organizations with the surplus said, quote, we have significantly expanded individual donor campaigns, overhauled our branding and established significant goals for grants. So the lead move here is that they expanded individual donor campaigns and the organizations that were in a deficit prioritized foundations or they relied on government. They didn't build a major gift system. The pattern here is that surplus organizations had a major gift strategy, deficit organizations did. Now you might be sitting here listening and saying, ria, that sounds great. I want to build an individual major giving program. But here are some of the biggest barriers that I see for why people have not yet built it or have seen some stalls. One, you don't actually have a qualification framework. Now, this is the biggest mistake that I see nonprofits make. A qualification process. Typically when I talk to nonprofits, they think the qualification process means that they've done some research. Maybe they have a well screen and they have a name and they qualified. If those are your two points of qualification, I. E. A name and a wealth screen score, you're likely going to spend a lot of time and energy chasing people who have no interest in talking to you. When I think about having a thorough qualification process, I want to talk about five key components, one of which is capacity. So obviously you are only a qualified prospect if you have actual money to give. Right? When we're looking at capacity, we're thinking about things like a death, a family foundation, gifts of stock, other gifts of assets, not gifts of income. Two, do we have any engagement data? Right. So this is what I call the Mackenzie Scott problem. Well, a lot of organizations out here think that we can just get money from Mackenzie Scott. But if Mackenzie Scott doesn't know about you, Mackenzie Scott has shown no interest in you, she's probably not a prospect for you. So engagement is a key component here. Do we have people on our list? Are they opening our emails? Are they clicking through? Are they showing up for events? Three, do they have a reason? There are 1.5 million nonprofits in the U.S. they all do good work. Why us? Why now?
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Why then?
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Four, timing. All these three other components could be perfect. They could have money to give. They could show interest in your cause. They could have some kind of reason why they gift your cause above all others. But if the timing is off, in other words, maybe they have something going on. Maybe they're not looking to give. In any timeframe within the next couple of months, timing is everything. And the fifth thing, do we have permission? I'm a big fan of consent based fundraising. What I mean by that is often we will chase people who do not want to be chased. We will email people who've never consented to be contacted by us. And then we wonder why we're not welcomed with open arms. Consent, people, consent is important. And so when we have a thorough qualification process, we are actually identifying people who raise their hand and want to be engaged with us. So that would be the first barrier. The second barrier, you're trading major gifts as transactions instead of relationships. I hear this all the time. Maybe you get a couple of matrix gifts via an event or a specific campaign and then you don't continue to nurture it or you don't nurture it in a way is resonating with their donors. Maybe you're sending out emails to ask people for coffee. Nobody wants to have coffee with you. Nobody is sitting there waiting for your phone call. You need to be able to engage people at the right time, in the right way, in the way that they want. Third barrier to having a major grid program. Your board isn't involved, so you're doing all of the work. Like any other strategy, there has to be consistency in buying across leadership, because this is a strategy that takes time and effort and energy. And to be able to do it right and to do it well, you have to have buy in five. You're overweighting foundations relative to their return. So in a world where we are all constrained by resources, we have to think about time allocation and effort allocation. I would invite you to take a step back and look at the amount of money that foundations or government or corporate is contributing to the bottom line, as well as the potential upside. And make sure that you're allocating the time and effort appropriately relative to the actual money in and the potential upside. And finally, burnout. Burnout makes us default to what's familiar. And so oftentimes we'll spend a lot of time working on a grant proposal versus picking up the phone and talking to humans. Or we're afraid to make mistakes, or we're afraid to try something new, or we're afraid that we're going to be punished for doing something that's wrong. And so we continue to do the same thing over and over again and expect a different result. When we are burnt out, our brain moves into what we call a survival mindset. And that's when we see the world in black and white. We're afraid to take chances, we feel fearful, we feel that there's some scarcity. And so one of the things that I really recommend that you do is take a step back and look at what you're doing and how you're spending your time and effort and ask yourself if that time and effort is commensurate with the outcome that you want. What I recommend that you all do is audit where you're actually spending your time versus what you're actually getting back, and then move any misallocated effort from foundations to major gifts. Now, it's like they say, the best Time to plant a tree was 20 years ago. The second best time is today. Some of you might be out here saying like we haven't built a major git program yet. That is fine, but it's not going to get built if you continue to put it off. So I hope this is a wake up call. Today is the day that you are starting on this. What you can also do if you're listening to this is identify your qualified prospect pool. What I mean by that is look at your list of prospects or your email list or your list of past donors and start with your most likely top 20. I get this question a lot. How do I segment my top 20? Don't let perfect be the enemy of the good. Start with a very simple cut of your top 20. I would look at recency and overall giving. Start with that list and create a plan for outreach there. If you're listening to this and you're convinced that you do need a major gift system, what you need to start doing is to build a real system for identifying folks who are engaged with you, building a robust qualification process and then creating a co created cultivation process with your donor, leading them to a co created proposal for funding. So there are no surprises. There are no the donor feels like they're in control and that you're building a trust based, consent based process. The other thing to do here is involve your board. You want five to 10 people actively working on major gifts. What I mean by actively working is helping to identify potential donors, helping to build relationships, helping to spread the word about the work. There are many different flavors of fundraising that have nothing to do with asking for money. And the final thing is right size your foundation. So you should continue with your foundation strategy. I'm not saying that you should abandon that, but make sure the amount of time and effort that you're spending on that is commensurate with the amount that is bringing into your organization. Why this all matters is when revenue becomes predictable, the burnout drops, you can hire, you can expand, you can serve people the way that they need to be served and you stop carrying all alone. Foundations do work, they just should not be your answer for sustainability. And if you're listening to this and you have no idea where to start and you want some support in building your major gift program. We are offering a limited number of donor growth evaluation calls with our team to help you understand what it would take to build a major gift system in your organization. The details are below. I will see you all next week. In closing, build your major gift system today.
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