We’ve just begun to believe that 2020 is actually over, and yet here we are, already working on 2023. A lot has happened over the past year, and now we’re all staring into our crystal balls with more than a little trepidation. Based on the headlines, it’s not looking great, but that doesn’t mean we can’t prepare for what lies ahead. In our hyper-connected world, what impacts the tech, business, and finance sectors impacts us all. So, hot off the presses, here are 2023’s top for-profit trends—and why you, as a nonprofit, will want to sit up and take notice.

Finance and business trends for 2023

Like it or not, there is a direct correlation between economics and donations, and another link between business and the economy. So we're looking at now these business trends affect nonprofits, and therefore your donations—and impact.

1. Donors Cover Fees giving model

Asking donors to cover processing fees during the donation process is an increasingly popular model—especially during these times of financial instability. If you haven't heard of it, here's how it goes: on the donation form, the nonprofit asks  the donor to increase their donation to add a small amount to pay for transaction and processing fees generated by the noncash gift, allowing the nonprofit to cover overhead costs while preserving more of the funds designated for programs and services. It's a checkbox, and for the average donation, it's a little increase that makes a huge difference to the nonprofit.

Why should nonprofits care?

This is a huge topic of conversation in the nonprofit world! It’s become commonplace for donors to be asked if they want to “cover the processing fees” when making a donation. Some say that adding this option to your donation form reduces conversion rates, while others counter that the increase in funds still has the nonprofit winning. 

What should nonprofits know?

Well, there's no disputing Funraise's findings. Funraise has a donation form conversion rate of 50% and we see donors opt-in to cover the fees almost 90% of the time. Combine that with the industry-average one-time donation of $125, and that's a lot of costs covered. 

2. Buy now, pay later

Millennials and Gen Z are all about that instant gratification, and buy now, pay later (BNPL for the cool kids) allows customers to buy products now and pay the bills later on. Usually, you pay off your purchase in four equal installments, paying the first one at checkout. Most BNPL plans don’t affect your credit or charge interest—but they do make it easy to overspend. Still, we’re all about YOLO FTW these days, and BNPL’s bound to keep getting bigger.

Why should nonprofits care?

A recent NerdWallet survey found that 30% of Americans have used BNPL in the last year (that's nearly 78 million people for anyone counting), and each of those users has done so an average of six times. That’s a lot of buying and a lot of paying later! As a result, start-ups have taken notice, leading to DNPL: donate now, pay later. Just like many shoppers want to buy more than they can afford to buy, some donors want to give more than they can afford to donate. DNPL allows supporters to give now and pay off the balance over time.

What should nonprofits know?

• Already, there are widgets you can add to your donation site that allow donors to give right away and pay it off at a later date. Popular options include B Generous and Givzey.
• To pay for DNPL services, charities pay a percentage fee to the company or a membership fee.
• For donors, there’s no interest and no late fees for their donations. They receive the full tax deduction amount immediately.
• While DNPL can lead to larger gifts, donors run the risk of overspending, which can impact their long-term relationship with the nonprofit.  
• One way to think about DNPL is as a better version of DAFs. There's been a lot of talk lately around DAFs and how they benefit the wealthy more than the charities themselves. DNPL giving is much more accessible, gets money to your charity right away, and gives immediate tax benefits to donors of all stripes.

3. Environmental, Social, and Governance (ESG) initiatives

If the past few years of supply chain shortages, “once-in-a-lifetime” weather events, and pandemics have taught us anything, it’s that everything’s connected, and we’re not really in control of a heck of a lot. In response to the many crises of our times, 76% of consumers have said that they’ll stop buying from socially irresponsible companies—and investors have taken notice. Now, companies are focusing on a new stakeholder: the community. As a result, they’re placing a greater emphasis on social responsibility, from reducing their carbon footprint (E) to reviewing labor standards (S) to reconsidering their executive compensation (G). As our world gets wilder, ESG will only become more essential to business success.

Why should nonprofits care?

As nonprofit professionals, we’re in the relationship business, and that means cultivating a stellar reputation and building trust with our communities and donors. ESG holds corporations and nonprofits alike accountable to certain standards, encouraging transparency and ensuring that we’re all working toward a common good. Furthermore, by investing endowment funds in socially responsible companies, nonprofits can do good beyond their individual mission. And ESG isn’t a one-way street: by committing to an ESG framework, nonprofits can avoid investment risks associated with climate change (no small thing given that climate-related weather is expected to cost businesses $1.3 trillion by 2026!) and attract top talent through humane hiring practices.

What should nonprofits know?

• There’s no single framework for measuring ESG adherence and reporting on the outcomes. Consider what metrics would improve your operations and appeal to your stakeholders.  
• As a nonprofit, you might assume you’re doing swell when it comes to ESG. After all, you’re one of the good guys! But while an environmental nonprofit will get an easy A when it comes to E, the same may not be true when it comes to S and G. Are staff members paid a fair wage? Is the swag for your gala produced according to fair labor standards? How diverse are your committees?
• Before embarking on your ESG journey, talk to your board. If they’re on board (we crack ourselves up), set measurable commitments and then implement them into your core operations. After that, it’s about tracking your progress just as you would any other key performance metrics.

4. Blockchain technology

Crypto’s had a rough go of it lately, and who’s to say whether that will last or not. But blockchain technology, the technology that underlies crypto, is still going strong. Blockchain, which securely documents data, allows for cross-border transactions. And while the process is a bit drawn-out and pricey now, that’s quickly changing, which will lead to faster, more secure, and cheaper international payments.

Why should nonprofits care?

With inflation still comin’ on strong and a recession looming, organizational transparency is more important than ever. Donors want full accountability—and with blockchain, you can show exactly where every dollar is going. On the flip side, donors can also donate to causes without fear of being traced. For example—and we’re just throwing this out there—if you live in a state that’s made abortion illegal, you can donate to abortion networks anonymously, and no one will ever know. Finally (turns out blockchain is really useful!), in the face of numerous international crises, blockchain technology makes it easier to collect payments from international donors and get funds across borders.

What should nonprofits know?

• There are a variety of platforms leveraging blockchain technology to benefit nonprofits. Popular options include The Giving Block, Givepact, and BitGive.
• Blockchain technology can also help in reducing overhead because it streamlines administrative processes.
• Another tool to take advantage of is smart contracts. These programs run automatically, releasing funds as soon as certain criteria are fulfilled and recorded on the blockchain. As a result, funders and donors can ensure their funds go exactly where they want.

5. Open banking

In keeping with the theme of transparency, open banking enables third-party service providers to access personal financial data. It’s all done through APIs (application programming interfaces), a technology that lets two apps talk to each other. With an increasing focus on financial inclusion and personal security, open banking is opening up fast. Just this October (2022), the US Consumer Financial Protection Bureau (CFPB) moved forward with an open banking rule requiring financial institutions that provide transaction services to set up secure ways to share data while protecting that data from misuse.

Why should nonprofits care?

When consumers are empowered to manage their own financial information, they can make more educated decisions about how they use their funds. Third-party apps can offer customized suggestions based on each user’s individual finances—and donating to charity is certainly among those. Additionally, open banking gives startups access to data that was previously only available to big banks. Maybe it’s time for some nonprofiteers to take the reins and ensure everyone knows the benefits of nonprofit giving!

What should nonprofits know?

• When someone shares their data through open banking, they share their name, account type, currency, the date the account was opened, and all their transaction details.
• A lot of users are still nervous about sharing their data, particularly because open banking is a purely digital experience. By coupling the technology with a human touch, you can bridge that gap, empowering donors and cultivating the relationship.

Technology and media trends for 2023

Startups and social media and software and stuff. 2023's tech trends are truly tremendous.

6. Data-driven fundraising

In recent years, there's been a push to get nonprofits to turn to data-driven practices and strategies that focus on understanding donor habits and activities. While nonprofits have always measured success with key performance indicators like total giving, donations per donor, average gift size, and program engagement, they're now using insights from this data to create targeted campaigns and streamline processes for easier giving. Modernization, y'all! Plus, since data-driven approaches rely on both focused and big-picture understanding, nonprofits will maximize the efficiency of their processes and tools (and cut costs!) by taking a data-based approach to decision-making.

Why should nonprofits care?

Understanding donor behaviors allows nonprofits to get strategic when marketing products or services. It helps them make informed decisions about which donors they want to pursue, how they should message accordingly, and what type of offers are most likely to bring in more donations. Plus, the large amounts of data at their fingertips allow nonprofits to segment their donor bases like never before, allowing for... (spoiler alert: another trend on our list!) personalization of the giving experience 

What should nonprofits know?

Yes, the latest and greatest fundraising reporting tools make all the difference. But context is also key; when you make a decision based on a single data point, you may not see the results you expect when you take it to scale. Similarly, when one person makes decisions unilaterally, unintended consequences abound; make decisions as a team for a giving experience that benefits your entire audience.

7. Metaverse

Ah, the metaverse. While it’s still just a baby-verse right now, it’s only getting bigger. In case you’ve been shouting, “La la la, I can’t hear you!” every time the metaverse is mentioned, here’s your primer: it’s a huge, immersive virtual environment in which people can do …pretty much anything. This includes working, socializing, gaming, shopping, and digital alpaca petting.

Why should nonprofits care?

Our buddies at Gartner predict that one-quarter of people will spend an hour per day in the metaverse by 2026. That’s a lot of hours, and in between working, shopping, and chilling with their digital pals, they’ll want to do some good. With that type of traffic, nonprofits focused on their future donor base should consider the metaverse ASAP. Here, you can meet far-away donors face-to-face without ever leaving your house, plus you’ll be viewed as an innovator if you adopt it soon.

What should nonprofits know?

• While parts of the metaverse already exist, Meta CEO Mark Zuckerberg estimates it will take a good 5-10 years for most key metaverse features to become mainstream. So, you have a while to plan.
• By getting in early, nonprofits can help shape the metaverse to be less sexist, racist, xenophobic, homophobic, and generally terrible than our current online world.
• Unsurprisingly, the majority of metaverse users are young, making it a great gateway to the next generation of donors and activists.
• How many metaverses will there be? That’s a tricky question. Currently, over 160 companies are building the metaverse, with major players including Meta, Microsoft, and Epic Games. So, you’ll want to stay plugged into which ones are gaining traction.
• The term “metaverse” first appeared in Neal Stephenson’s 1992 novel Snowcrash, a sci-fi classic. Is that important for nonprofits to know? No, but it’s a great read!

8. Smartwatches, bracelets, and rings

These days, it’s all about convenience and speed. We shop online to avoid schlepping to a store (disclaimer: we love schlepping to stores because then your shoes actually fit, but you do you, majority of the population); we pay with our phones to avoid counting out cash. With wearable technology, from smart watches to smart rings, users can send emails, make payments, and track their steps without lifting a finger—and companies can get invaluable data and insights.

Why should nonprofits care?

Already, nonprofits have added mobile and text fundraising to their repertoire. Given that the global wearables market is predicted to grow by over 13% year-over-year in the next five years, the next fundraising frontier could be wearable technology. It’s also a handy tool for peer-to-peer fundraising, particularly walk-a-thons.

What should nonprofits know?

• Wearable tech is small, and that means different types are focused on different priorities. For now, most smart rings are focused on health monitoring, while smartwatches offer a greater breadth of services.
• Already, payment-focused smart rings and bracelets have built-in benefits for nonprofits. For example, RingPay, which is focused on contactless payments, includes RingPay Giving. This technology allows users to donate a fixed amount or round up their purchases to support the charity of their choice.

9. Digital Immune System

We rely on our immune system to keep us relatively healthy, but sometimes, it needs a little boost (thanks, science!). That’s exactly what a digital immune system does for software systems. Through some high-tech shenanigans, a digital immune system’s many technologies and practices detect cyber threats and respond accordingly, keeping your services and data safe and sound. And just as the development of vaccines and medication has helped us navigate COVID, new advances and evolutions will help our technology stay resilient in the face of new threats.

Why should nonprofits care?

As a nonprofit, your data is one of your most valuable assets, so you need to protect it above all else. (That’s why Funraise offers aaalll the data security tools, protocols, and certifications!) Anything nonprofits can do to increase security and reduce the likelihood of data breaches and system downtime creates a better donor experience—and that’s good for your bottom line.

What should nonprofits know?

• All nonprofits can get a jumpstart on digital immunity by fostering a culture of security now. Start with these simple steps:

• Enable two-factor authentication on every system and require everyone to turn it on.
• Use secure networks and never reuse or share passwords.
• Lock all unattended computers, tablets, and mobile devices.

• Truth be told, the language of digital immunity isn’t the most accessible. But if you want to learn more, you can focus on the six core digital immunity practices and technologies: observability, AI-augmented testing, chaos engineering, site reliability engineering, auto-remediation, and software supply chain security.

10. Super apps

It’s a bird, it’s a plane, it’s… super apps! And while they’re not as exciting as an absolute unit soaring overhead in spandex, they’re pretty neat. Basically, super apps bundle all your app needs together in one place, so you sign in once and have access to everything through various mini apps—with the bonus of a streamlined, consistent digital experience. Super apps like WeChat and Alipay are already big in China, offering messaging, banking, social media, marketplaces, rideshare and delivery services, and travel booking all in one place. Think of it as Walmart on your phone—but hopefully, it pays its employees a living wage!

Why should nonprofits care?

Super apps allow for hyper-personalized customer support, from a person who can help you coordinate your outfits to assistants that can find the best travel itinerary. If nonprofits can provide that level of transparency and that amount of detail when it comes to organizational needs and donor impact, they’ll certainly have a leg up when it comes to attracting supporters. Plus, super apps can make giving a regular occurrence, rather than an end-of-year scramble, by increasing accessibility. And one more thing: if app data is useful, super app data is super useful, helping to target donors and create an optimal user experience.

What should nonprofits know?

• 70% of Americans are willing to spend more money for convenience. If charitable giving is more convenient, requiring a single sign-on rather than re-entering your credit card and personal info a dozen times over, it stands to reason that more folks will donate.
• Building a super app is super pricey, and it requires a huge team—so we’re not suggesting nonprofits create them themselves. Instead, consider partnership opportunities as this technology grows in popularity.

11. AI-generated content

For years now, futurists and sci-fi writers have warned us that robots are coming for our jobs. (Some of them have also warned of an intergalactic war between the fish-people and the cyborgs, so take all that with a grain of salt.) But the latest AI technology is shockingly good at creating quality content. Tools like Midjourney turn text into one-of-a-kind art while Frase creates SEO-based content briefs.

Why should nonprofits care?

It’s no secret that most nonprofit organizations don’t have overflowing coffers. Quite frankly, AI-generated content can be much cheaper than human-created content. When you’re working with a limited budget and limited hours in the day, it’s a quick, cheap solution.

And if you're one of those who dreads having to write your yearly appeal... well let's just say that we hope all of your dreams come true, too.

What should nonprofits know?

• Wading into the waters of AI-generated content is a controversial step. Many fear it will be the death of human artistry and talent. But digital design programs and editing tools have stoked similar fears in the past, so it’s all about balance. Consider carefully where AI can help you and where you want that human touch.
• AI can improve your content and streamline operations right now by assessing SEO, recommending keywords, and helping with A/B testing.

12. Event safety technologies

Between pandemics and extremists, events can be a bit stressful nowadays. Luckily, tech companies are coming out with all sorts of solutions to make in-person gatherings safer. From crowd-monitoring technologies to contactless payment methods and admissions, attendees can rest easier, knowing that they’re in safe, technologically advanced hands.

Why should nonprofits care?

Easy: Safer fundraising events mean more attendees, and that means more funds for your organization.

What should nonprofits know?

• These days, each of us is largely responsible for our own COVID mitigation tactics (or lack thereof). So, whether you want to implement techy COVID precautions at in-person events largely depends on the attendees and current transmission rates. If you work with vulnerable populations or have older donors, these technologies can assuage a lot of fears.
• Some of these technologies may raise red flags re: privacy concerns and AI bias. Do your due diligence in terms of research and speak to your attendees about any anxieties beforehand.

13. Voice search

According to something called Google, 41% of adults and 56% of teenagers now use voice search every single day—and that number just keeps rising. Voice search technology, like Siri and Alexa, is faster and more convenient than typing; however, most businesses haven’t optimized their websites for voice search.

Why should nonprofits care?

If you want donors to find your organization online, you’ve probably spent some time on SEO, ensuring search engines highlight all the good you’re doing. But just as people write and talk differently, they search differently when they’re typing versus speaking. If you want 41% of adults and 56% of teenagers to discover your nonprofit, you need to invest in optimizing your content for voice searches.

What should nonprofits know?

• To get started, keep in mind that most voice searches are phrased as questions. Adding an FAQs page is an easy way to get in lots o’ voice-search-friendly queries.
• Voice search uses natural language processing, which is always improving. As a result, you’ll want to stay up to date on the latest advances to ensure your content remains top of search.
• Right now, there’s no need to worry about optimizing every piece of content to voice search. Focus on key high-traffic pages and see where it takes you.

Cultural trends for 2023

Human nature is generally unchanging. How we tap into our intrinsic nature is different to each culture, though. And same as everything else, there are trends and fashions, ups and downs, and history repeating itself.

14. Personalization in nonprofit fundraising

Personalized fundraising sounds like it's either a part of a major donor stewardship strategy or a nice way to say you're stalking your donors. Actually, today's version is the result of algorithms, technological advances, and machine learning. Which are all v trendy (and sometimes creepy.) Seriously, though, personalization simply means tailoring asks and messaging across your channels to best speak to your target donors, based on their interests, giving history and individual traits or demographics.

Why should nonprofits care?

More donations, obv. Why else would you care? (ok, yeah, relationships, you're right.)

It's no surprise that well-crafted personalized fundraising campaigns have proven to be effective for driving both engagement and large-scale donations. In this era of immediate gratification and exceptionalism, donors (especially Millennials and Gen Z) expect a high level of customization as they interact with any digital entity, and when combined with other strategies like text-to-give and peer-to-peer, personalization can be the connect-the-dots puzzle piece you've been missing.

What should nonprofits know?

It's all about machine learning. Funraise's machine learning model can provide a personalized ask string (donation button amounts) based on environmental and personal attributes about the donor, like average donation amount, time of day they previously gave, their device type, and their previous fundraising activity. These days, personalization is as easy as clicking a button. 

15. Nostalgia and tradition

In uncertain times, many of us yearn for the good ol’ days. As folks yearn for simpler times and take solace in tradition, nostalgia is everywhere, from sitcom reboots to Polaroid cameras.

Why should nonprofits care?

These turbulent times aren’t ending soon, but the nostalgia trend gives nonprofits a tool to connect and offer comfort during uncertainty. By embracing the past while striving toward a better future, you can offer your community the best of both worlds. And ultimately, it’s what nonprofits are all about: creating connections through storytelling, staying positive, and infusing warm traditions into the changes we wish to see.

What should nonprofits know?

• From a marketing perspective, 90s nostalgia is where it’s at. Because of this, millennials are the target audience. Oddly, Gen Z is also into it … even though they weren’t alive in the 90s.
• Fundraising events are a prime opportunity to incorporate nostalgia and tradition. Host a drive-in movie fundraiser or a Mario Kart competition (the N64 version, obviously!). Or, focus on events that you can revisit year after year, creating new memories to mingle with the old.

16. Digital creator inequality

The creator economy sounded so promising. It was all about empowering the individual and giving anyone a chance to make it big. Instead, it’s mirrored our capitalist structures, with the rich getting richer and the powerful getting powerful-er. On Twitch, more than half of all revenue goes to 1% of streamers. When it comes to podcasts, 1% of podcasters receive 99% of downloads. There are tens of millions of creators around the world, but the vast majority can’t make a living from it—and the picture is even less equitable for BIPOC creators.

Why should nonprofits care?

This is one bleak trend, but it’s also an opportunity for nonprofits to step up and change things. We tend to think of influencers or streamers as people who can fundraise for nonprofits, bringing their audience to our cause. But what if we turn the idea on its head, bringing donors to the creators for direct assistance, even if that's just in the form of boosting their content so they can work the algorithms? If we’re truly invested in equity and community, we seek ways to amplify marginalized voices that align with our mission.

What should nonprofits know?

• In 2016, 52% of American adults lived in middle-income households. On Patreon, however, only 2% of creators make minimum wage (that’s a measly $1,160) or more each month. As fighters for good, we need to walk the walk and say this isn’t okay—and we have the platform to do it.
• It’s natural to want a major influencer to fundraise for you—they have such a big audience already! But if you’re looking for numbers, consider fostering collaborations between multiple creators. These cross-promotional collabs drive community, boost creativity, and give everyone access to a new audience.

17. Desire for stability

Nasdaq recently checked in with a whole bunch of workers about how things are going. The answers were mixed, but one thing was certain: a desire for certainty. In fact, 53% of those interviewed said they were looking for jobs that “have a greater degree of security than they currently have.” Our labor market is all over the place, but one thing is for certain: after so many ups and downs, people want stability. In the year ahead, employers can draw top talent not through ping-pong tables and free snacks, but through the promise of peace of mind.

Why should nonprofits care?

In a tight labor market, many nonprofits worry that they can’t compete because they can’t afford top salaries. But here’s what you can offer: reassurance. Nonprofits should consider how to offer a consistent work experience to current staff and how to reassure staff members and potential hires that they’re not planning to restructure à la Elon Musk any time soon. Managers are particularly well equipped to build trust and buoy staff by acting as mentors, coaches, and allies.

What should nonprofits know?

Here are a few ways to help employees feel more secure and stable in their roles:

• #1: Trust your employees and treat them like the experts they are.
• Offer learning and development opportunities.
• Be transparent about organizational finances and any major decisions.
• Promote from within.
• Emphasize work-life balance.
• Offer benefits that improve over time.

It’s hard to know what 2023 will bring, but no matter what, we have no doubt that our nonprofit community will hit every curveball out of the park like the pros they are. (Did we just use a sports metaphor? 2023 really is shaping up to be an atypical year!)