Here is what the sector experts and trends as observed over the last few years reflect.
Sectors attracting more funding:
With global changes taking place around the social, political and environmental issues, and giving preferences of individuals and donor agencies, the sectors that attracted more funding over the years are bound to shift. The last two decades saw a huge amount of funding in the health sector, HIV/AIDS and related areas, and then gradually education, skill-building and livelihoods also came to the fore in terms of donor priorities.
As of today, the younger generations are leading the protests across the world on the climate change issue..
- Human rights, peace and conflict resolution
- Health, livelihoods, education and others
- Other funding trends to anticipate in 2020:
- Individual giving
General or individual donor giving was recorded at lower levels in the US, the largest donor area where the retention rates were also reported to be low as compared to previous years. This trend also showed reliance on major donors and meant that efforts need to be put in to ensure the ‘voice’ of the common individual too. This trend means that in order to increase individual donations and recurrent and engaged donors, organizations need to implement strategic fundraising and engagement initiatives for the target audience, going forward in 2020.
- Increase in larger gifts
Nonprofits can expect an increase in big gifts, as donors are giving more but less frequently. These larger gifts from major donors as individuals or foundations/ corporations etc. might mean a decline in the autonomy of small nonprofits in many cases. NGOs must weigh in the advantages, responsibilities and all the caveats while accepting these donations to ensure autonomy and credibility. At the same time, once you have accepted a donation or grant, ensure that reporting requirements are met, the donors are stewarded adequately and are engaged deeply so that they give again and stay engaged with your cause.
- Intermediary bodies to empower donors and support nonprofits:
The third sector will continue to support the ‘third sector’- meaning that the intermediary organizations will continue to grow in order to empower donors and support nonprofits in their cause. These organizations are typically offering technology, services, consulting, mentoring, etc. and are acting as the connecting links between nonprofits, individuals and private sector and are supporting the overall ecosystem.
- Impact investing and sustainability:
More and more individuals and organizations want to give to the causes where their money is used wisely and with a ‘return’. As per Wikipedia, Impact investing refers to investments made into companies, organizations, and funds with the intention to generate a measurable, beneficial social or environmental impact alongside a financial return. Impact investments essentially provide capital to address social and/or environmental issues.