How New Jersey’s nonprofits are finding new ways to handle today’s fundraising world

It’s hard to complain about half a trillion dollars.

It was, to be exact, $557.16 billion that the country’s charities received from individuals, bequests, foundations and corporations last year, according to a report released this summer by Giving USA.

And yet, that annual number represented a slight decline (2.1%) for nonprofits when adjusted for inflation. Although the numbers are still up from pre-pandemic levels, advisers to New Jersey’s nonprofits said that’s little comfort to organizations that are dealing with more demand than ever.

Vicki Bixel, CEO of Sobel Bixel: Consulting for Nonprofits, said there are more than 50,000 nonprofits in New Jersey — meaning it’s hard to capture a singular sentiment about how they’re all feeling about fundraising today.

Big leap to AI

Just like private enterprises, nonprofits are eyeing artificial intelligence as a way of creating efficiencies, streamlining processes … and, put simply, a way of saving money.

Keith Timko. (Support Center)

Nonprofit consultants say organizations they work with want to be leaner. They expect that automating once-manual marketing and fundraising tasks offers that.

“While it’s not going to be a replacement for the human aspect of nonprofits, there’s real potential for AI and tools such as ChatGPT to be used in the creation of nonprofits’ ‘thank you’ letters and grant writing,” nonprofit consultant Vicki Bixel said, adding that there’s also the potential to benefit from “wealth analysis tools that use AI to predict people’s giving habits and analyze fundraising data.”

Bixel, who has been involved with advising nonprofits for 25 years, said nonprofits aren’t long removed from the days of writing down donor information on index cards. So, AI is a big leap, but even some of the smaller nonprofits are making it.

However, Keith Timko, another nonprofit adviser, said there are still some caveats for nonprofits.

“We know that these algorithms have exhibited bias, and nonprofits need to be careful in trusting them to solve for things — because it’s those biases that have led to the world we live in today,” he said.

But, here’s what she can say: Jersey’s nonprofits are savvy, representative of the character of the state. So, when it comes to fundraising, they’re largely figuring it out.

And having access to the Garden State’s individual and corporate donor pool doesn’t hurt.

“New Jersey overall is a very caring state, and we particularly saw that in the pandemic, when those in the state rose up to secure needed funding for health and social service organizations, and even the arts, which was battered by the pandemic,” she said.

As Bixel suggested, there’s a massive amount of nonprofits in the state, all operating massively differently. Some rely on grants or funding from federal, state or municipal governments. For many nonprofits, philanthropic gifts give nonprofits flexibility to do ancillary or innovative programs on top of their main mission.

Some groups, however, do rely heavily on donations. And it’s individual donors, including those with donor-advised funds and family foundations, that give nearly 80% of philanthropic dollars in this country. But donations from individuals are on the decline, according to Giving USA’s survey.

“Many individual donors are more generous than ever, and many nonprofit organizations are raising more than ever; however, the number of individual donors who give to charity has been decreasing for years,” said Amy Eisenstein, co-founder and CEO of Westfield-based Capital Campaign Pro.

What does Eisenstein attribute that to? She proposes less participation in organized religion correlates to less money flowing into nonprofit programs via churches, synagogues and mosques.

“Another reason for a decrease in giving is concern about how nonprofits use contributed funds,” she said. “I blame much of the mistrust on the media, which highlights the rare cases of fund abuse and less so on the millions of nonprofits doing good work.”

In the face of that, nonprofit leaders have done their best to diversify their fundraising strategy, Eisenstein added.

Donor-advised funds and community foundations have become a major pipeline of funding for nonprofits, particularly in New Jersey. Bixel adds that bequests from an aging population have become a big part of the conversation, too.

“Boomers have been an incredibly generous, philanthropic group, and there’s going to be more legacy giving from them through estate planning,” Bixel said. “Gen X is standing up as well, saying, ‘Pay attention to us. We might not have the same level of disposable income, but there’s a major wealth transfer coming to us.’ Meanwhile, millennials and younger generations are really dedicated to volunteering and advocacy.”

Experienced nonprofit consultant Keith Timko, CEO and executive director at Support Center, said navigating fundraising opportunities is sometimes more difficult for the nonprofits operating on a budget of less than $1 million a year, which happens to be 75% of nonprofits.

“While they can recruit knowledge to their boards … small nonprofits aren’t going to have research departments and high-level evaluators, so they rely on building relationships and storytelling,” Timko said. “They need to make the case that there’s impact.”

Whether overall philanthropic giving is trending in the right or wrong direction might be up for debate, but the fact that there’s a lot of impact to be made is widely agreed upon.

“The need continues to be great in New Jersey — from south, to north, to east, to west,” Bixel said.