The 11th edition of the Michigan Fundraising Climate Survey from Montgomery Consulting Inc. in Huntington Woods shows this year’s respondents were noticeably less upbeat than the 2022 panel.
As the only annual study into the specific fundraising issues and challenges facing Michigan nonprofit organizations, the most recent survey suggests real inflation and a possible recession may be starting to take a toll on fundraising results and how nonprofit leaders rate Michigan’s current climate for successful fundraising.
Fewer organizations reported raising more money. Statewide, the proportion reporting having raised more money last year than in the year before fell from a record high of 59 percent on the 2022 survey to 44 percent on the 2023 survey. When looked at separately, an even smaller proportion of metro Detroit respondents (27 percent) reported having raised more money than in the year before.
“In 2022, we saw record gains in organizations raising more money than in the prior year,” says Michael Montgomery, principal consultant of Montgomery Consulting. “It’s no real surprise to see that retreat. … Why so few metro Detroit organizations reported raising more money, however, is concerning.”
The report also states that fewer NPOs have met their fundraising goals. Statewide, the proportion reporting that their organization had met its prior year fundraising goal fell from 65 percent on the 2022 survey to 56 percent this year, while the proportion reporting that they had not made their goal rose from 33 percent to 42 percent.
Metro Detroit respondents reported even worse results with just 41 percent reporting having met goals, and 59 percent reporting that they had not made goals.
“About a third of our respondents typically report having missed their fundraising goal in any given year,” says Montgomery. “To see that jump to 42 percent statewide is significant, but the 59 percent failing to make their goal reported by metro Detroit respondents is downright alarming.”
The study also shows fewer NPOs reported adding donors, but more reported having “about the same number of donors.” This led most organizations to have at least as many donors at the end of 2022 as they had at the end of 2021.
“Pandemic-related needs got more people to give to organizations they had not previously supported and that has clearly been slowing,” says Montgomery. “Still, seeing more organizations reporting having at least as many donors at year-end 2022 as they had at the end of 2021 is very encouraging.”
Additionally, respondents were a little less optimistic about Michigan’s current climate for successful fundraising. On the 2023 survey, 28 percent of respondents rated Michigan’s current fundraising as better than the year before versus 33 percent on the 2022 survey. It is important to note, however, that fundraising confidence remains much higher than during the worst of the pandemic in 2020.
Corporate donors continue to be more important for raising funds than individual donors for secular Michigan organizations than implied by the national averages coming from Giving USA.
The report also states the “hybrid” workplace is here to stay. Statewide, 38 percent of respondents reported their organization is operating on a hybrid basis and that is likely to be permanent. The proportion of respondents reporting hybrid workplaces rises to 60 percent for metro Detroit organizations.
At the same time, the proportion of respondents reporting the pandemic to have “significant” impact on how their agency does its work fell sharply from 60 percent on last year’s survey to 23 percent on this year’s survey, while the proportion reporting the pandemic to have little or no impact rose from 5 percent last year to 40 percent this year.
“As we get further from the worst days of the pandemic, people are less likely to associate it with how the nonprofit world has changed,” says Montgomery. “Before long, people may truly not remember that it was the pandemic that prompted the rise of the hybrid workplace or some programs going fully or partially online.”
“We initially put our concerts online to stay engaged with our audience through the pandemic. That initiative, however, really took off,” says Steve Wogaman, president of Chamber Music Detroit (CMD). “It’s now called CameraMusic and is a permanent CMD program, one that has expanded our audience to 49 states.”
The report also shows almost all respondents (91 percent) reported their organizations are now working from the office at least part-time. That figure includes 28 percent who worked from the office throughout the pandemic, 25 percent who were fully or partially remote early on but have returned to the office, and 38 percent operating on a hybrid basis.
Five percent of respondents statewide (4 percent in metro Detroit) said their organizations were fully remote and likely to remain so. (For these purposes, “office” is any employer-designated worksite other than the employee’s home).
The pandemic and related workplaces changes have had less impact on the bricks and mortar needs of Michigan nonprofits than expected. Thirteen percent of respondents reported closing sites where they previously delivered services, while four nonprofits reported that their organization currently occupies more space than needed to do its work. Of those four organizations, one is actively seeking compatible nonprofit tenant(s) while a second would do that if it were practical to subdivide their facility.
The 2023 Michigan Fundraising Survey uses 63 valid responses from leaders at a stratified sample of Michigan nonprofit organizations to estimate conditions and predict attitudes across the state’s nonprofit community as a whole.
Stratification assures that a representative cross-section of Michigan nonprofit organizations by type, size, and location are surveyed. This year’s 63 responses were received in response to 539 invitations to take the survey for a 12 percent response rate. (By way of comparison: Gallup and other major survey research companies use as few as 1,500 responses to make election predictions for the entire United States).
Montgomery Consulting observes the norms of professional social research and believe the results to be accurate for specific questions we ask and issues the group addresses.
Michael Montgomery is an owner and principal in Montgomery Consulting and an Intermittent Lecturer in the Department of Health and Human Service at the University of Michigan-Dearborn. He is a U-M-trained political scientist and the author of all 11 editions of the Michigan Fundraising Climate Survey.
Montgomery Consulting has worked with progressive non-profit organizations and communities since 1989 on fundraising, strategy, project development, and economic analysis. The firm has advised on more than $1 billion in fundraising and project activity, including on some of this region’s largest and most complex efforts.
The complete 2023 Michigan Fundraising Climate Survey Report is available here.
