Regardless of where you stand on the issue, the concept of “wokeness” is taking a toll on donations. How should your nonprofit respond?
In a cultural climate increasingly influenced by "wokeness," a recent USA Today poll reveals a divided America.
Opinions on whether being called "woke" is a compliment or an insult vary, but most people agree on the basic definition: being woke means being focused on racial and social inequalities. The perception of wokeness differs markedly across political and generational lines, with Democrats and younger Americans more likely to see "wokeness" positively compared to Republicans and older Americans.
Regardless of what view you subscribe to, this division has significant implications for the gifts nonprofit organizations receive, especially educational nonprofits. The recent decision by Robert Kraft to withdraw his $150 million support from Columbia University is a dramatic example of this trend. So is Engelstad Foundation CEO Kris Engelstad’s move to pull most of the foundation’s support from the University of Nevada, Las Vegas (download the letter here). Behind the scenes, many donors are quietly reevaluating their contributions to various charities, reflecting a broader shift in the landscape of philanthropic giving.
The donors who are reassessing their giving may not voice their concerns publicly, but their impact behind the scenes is substantial. They are not just reevaluating their support, many are opting to direct their donations elsewhere or hold back entirely.
The Impact of Wokeness on Donations
The rise of woke culture, characterized by heightened awareness of social and racial injustices, has brought about significant changes in societal norms and behaviors. Nonprofit organizations, traditionally seen as beacons of social good, are now navigating a complex terrain where donor expectations and societal values are in flux.
For many donors, aligning with nonprofits that reflect their values is crucial. The emphasis on social justice has led some donors to direct their funds toward organizations that address social justice issues. Conversely, a growing number of donors feel alienated as organizations they support diverge from missions that align with their personal values.
New Wake-Up Calls
Many nonprofits today are struggling to attract and retain donors, whether they are engaged in annual giving, planned giving, or major giving. This trend has been exacerbated by the rise of sociopolitical dynamics that lead to some donors reconsidering their support. And while it is often difficult or even impossible to appease these donors, there are other factors at work, too—factors that can be corrected by fundraisers simply doing what they’re supposed to do: engaging in proper stewardship.
That means thanking donors promptly and sincerely; stewarding them; acquiring and following up with new donors; and consistently engaging with donors and prospects by picking up the phone, sending an email, and dropping the occasional card or note in the U.S. mail.
However, these are only part of the equation.
One of the biggest issues that donors are suddenly recognizing is one that they’ve been blind to for years: the perceived lack of business savvy within nonprofit organizations.
Nonprofits are often seen as inefficient in managing their resources, squandering both time and money. One businessman shared with me a telling anecdote about a nonprofit that hosted a gala but failed to produce a profit and loss statement. That lack of financial accountability is what concerns many donors.
In the business world, there is a saying: "If you go woke, you’ll go broke." This sentiment reflects a broader skepticism about the integration of social justice issues and business practices. Donors, particularly those from the business community, are increasingly wary of supporting organizations that stray toward social agendas and away from their core missions.
The Need for Business Savvy in the Nonprofit World
To regain donor trust, nonprofits must get serious about how they utilize and report the spending of donor funds. Here are four key steps nonprofits should consider:
- Improve Financial Transparency: Nonprofits need to adopt rigorous financial reporting practices, including the production of profit and loss statements for all major events and initiatives. Transparency about where and how donor funds are spent can build trust and demonstrate fiscal responsibility.
- Demonstrate Efficiency: Highlighting operational efficiency can reassure donors that their contributions are being used effectively. Nonprofits should showcase their cost-saving measures, strategic investments, and the tangible impact of their programs. Show donors the bang they’re getting for their buck.
- Align with Donor Values: Understanding and aligning with donor values is crucial. Nonprofits should show donors that their missions and activities align with donors’ interests and concerns, without deviating from their core principles.
- Engage in Strategic Planning: A clear strategic plan enables nonprofits to set concrete goals, measure progress, and make informed decisions. This approach can enhance both operational performance and donor confidence.
Finding Solutions
While some nonprofits are upset by the re-evaluation of donor support, it’s important to recognize that the donor gets to decide how and where they give. Instead of reacting with frustration, nonprofits should focus on understanding donor concerns and seeking solutions.
By improving business practices and demonstrating a commitment to financial transparency and efficiency, nonprofits can build trust and attract donors who are looking for accountability and impact. This proactive approach not only addresses the current challenges but also positions nonprofits for long-term success in a changing philanthropic landscape.
By becoming more business-savvy, nonprofits can alleviate donor concerns and continue to fulfill their vital missions—the sole goal of any properly run nonprofit.
Defunding Higher Ed: A Growing Trend
In recent years, funding of higher education institutions has slackened, driven by donors, parents, and society at large questioning where their contributions are actually going. With increasing scrutiny on how universities allocate their funds, many are rethinking their financial support. The concern is not just about the efficiency of spending but also about the perceived overemphasis on social justice issues at the expense of traditional academic values.
A particular higher-ed donor recently complained, “Why should I name a building after me when my statue could be taken down in 50 years?” Donors do not see what is taking place on campuses through the same lens that students and faculty do. Donors know that these institutions were established by industrialists and see them taken over by the proletariat.
They wonder, “Why are they destroying the ‘We were here in the first place’ institutions? Where will the money be redirected? Heirs? The government? Other charities?”
If you fall into the “other charities” category, your time has finally come. As wokeness and its perceived excesses drive donors away from traditional institutions, you have an unprecedented opportunity to win over these disillusioned supporters by emphasizing fiscal responsibility, transparency, and alignment with donor values.
Anti-Wokeness as a Competitive Edge
The increasing backlash against woke culture, particularly in higher education, can be leveraged by nonprofits as a unique opportunity. By presenting themselves as viable alternatives to traditional institutions, “nontraditional” organizations can capitalize on the current climate.
One director of development, expressing frustration with the influence of political beliefs on donations, was heard saying, “I don’t need their damn money if they are voting for . . .”
Such sentiments highlight higher-ed donors’ growing discontent and the potential for other nonprofits to step in and fill the gap.
It Is the Mission That Counts
At the core of this shift is the importance of mission alignment—enduring mission alignment. Nonprofits that can clearly articulate and stay true to their missions, without being swayed by external political pressures, are more likely to attract and retain donors. Donors are ever more focused on value-aligned giving, seeking out organizations that reflect their personal beliefs and priorities.
Value-Aligned Giving
Nonprofits must focus on value-aligned giving, ensuring that they’re conveying their missions and activities in a way that resonates with their donor base. By maintaining a clear and consistent message, organizations can build trust and loyalty among supporters.
Class Division and Education Choices
Another consequence of the current preoccupation with wokeness is the growing class division in education. Many parents, dissatisfied with the focus on Diversity, Equity, and Inclusion (DEI) in public and some private schools, are opting to place their children in alternative educational institutions. These parents seek better academic standards and less emphasis on social justice curricula, further widening the gap between different socioeconomic groups.
The Opportunity for Nonprofits
For nonprofits, parents’ and donors’ disillusionment and reevaluation presents a prime opportunity. By positioning themselves as accountable, mission-driven alternatives, they can attract donors looking for a change. Emphasizing transparency, effective use of funds, and a commitment to core values will be key to standing out in a competitive philanthropic landscape.
The intersection of wokeness, donor behavior, and nonprofit management creates a complex environment—but one with potentially huge rewards. Nonprofits that can deftly navigate these challenges are poised to thrive as they attract donors seeking accountability and impact.
Navigating the New Philanthropic Landscape
Nonprofits are now faced with the challenge of staying true to their missions while managing the diverse expectations of their donor base. To balance these demands effectively, organizations need to:
- Communicate Clearly: Transparency about goals and values is essential. Nonprofits should clearly articulate their stance on social issues and how these align with their overall mission.
- Engage Diverse Donor Groups: Understanding the diverse perspectives of donors can help nonprofits tailor their outreach and engagement strategies to maintain broad support.
- Demonstrate Impact: Showing tangible results and the impact of donations can reassure donors that their contributions are making a meaningful difference, regardless of ideological divides.
Conclusion
The influence of woke culture on donations to nonprofits reflects broader societal shifts. As Americans continue to grapple with the concept of wokeness, nonprofits must adapt to changing donor expectations and values. By maintaining clear communication, engaging a broad array of donor groups, demonstrating impact, and focusing on stewardship and fundraising best practices, nonprofits can surmount the issues dividing our nation, and unite with donors intent on value-aligned giving.