The innovation imperative: Nonprofit fundraising in a shrinking system

Mergers in the credit union system are nothing new, but the size and scale of some recent examples served as a wakeup call for nonprofits operating within it. There’s inherent risk for a 501(c)(3) to test new fundraising strategies—but is there any other choice?

The November 2023 merger announcement from Coop Solutions and PSCU was a seismic statement, but not necessarily a bombshell. While notable because of who they are and the industrial scale they individually represent, the announcement was really more a continuation of the norm.

A look at the numbers

While membership grows consistently, the number of U.S. credit unions has essentially been contracting since the system’s adolescence. The zenith of almost 24,000 credit unions in the late-60s is literally a lifetime ago.

Even at the dawn of the 21st century, the number of credit unions was double what it is today. More startling, perhaps, is the 10% decline we’ve witnessed just since 2020.

And so the idea of a merger, once capable of causing a stir, now passes with little more than a murmur. League mergers have become part of the operational landscape, and even the long-speculated union of CUNA and NAFCU was met more with nods of understanding than gasps of surprise.

System partners and vendors, acutely aware of the system’s contraction, have not been idle. They've been actively seeking alternative or additive growth strategies, embracing the burgeoning fintech sector that has matured at the edges of traditional finance.

The nonprofit conundrum

Herein lies a challenge—and an opportunity—for the nonprofit ecosystem intricately linked to credit unions. Reliance on credit unions themselves as a fundraising strategy has long been risky, not only for the aforementioned trends but also due to credit unions, as community-focused, community-grounded organizations, understandably focusing philanthropic resources on local concerns.

Now, with larger organizations also merging, another source of funding is at risk. For nonprofits to survive and thrive in the system is ambition. A willingness to innovate .

For 501(c)(3) organizations, innovation is no mere buzzword; it's a lifeline. The inherent risk associated with "testing and learning" or making bold, freestyling moves could be intimidating, but one question looms large: Is there really any other choice?

Like the benefactors they’re looking to solicit, nonprofits can’t allow the macroscopic state to leave them behind. They must have the courage to not just ride the wave but steer it.

It's an uncertain move, but for those with the foresight to innovate, the risks may very well be outweighed by the rewards.

Marketing as the North Star

Carving out your brand’s ownable space has never been more critical. Articulating a clear and unique vision and incorporating tangible, measurable impacts into your narrative never more crucial.

Call it marketing, brand or fundraising: A robust, intentional strategy will elevate your brand voice and help it cut through the noise; the beacon that draws attention to impact.

This shouldn’t be viewed as a bad omen but genuinely as an opportunity. For any nonprofit actually committed to action and improvement, why would this not be reason for excitement?

The credit union system is more focused on impact and improving financial equity than it ever has been. Developing a strategy that positions your nonprofit as an integral part of that can only open up doors… and wallets.

Yes, the number of credit unions, leagues and system partners may be diminishing (although the fintech sector is anything but) but as it is, the role of each entity within the system grows more pronounced.

Those ready to pivot, innovate and broadcast a unique value proposition will not just survive; they’ll set the pace for what the future of nonprofit and credit union collaboration will achieve.

Get in touch to discover how Mission Brands Consulting can support your organization’s brand strategy and fundraising programs.