How Should a Nonprofit Respond to the Current Economic Situation? October 13, 2008

Last week I posted a letter from development consultant and GiftWorks partner Ruthellen Rubin, CFRE, about the importance of supporting nonprofits during these tough times.  Here is her sequel, to address the question of "How should nonprofits position their fundraising initiatives in this inevitable recession?"   

-Mary Pat Donnellon

Dear Friends and Colleagues:

Last week I sent my fundraising colleagues an email about the importance of continuing to support nonprofits during these difficult economic times.  Thanks for your feedback and comments; they were most appreciated.  However one more email is in order; let’s consider the flip side:  How should nonprofit organizations position their fundraising initiatives in this inevitable recession?  Unless you have a large endowment cushion or significant cash reserves, you will face some unprecedented challenges due to government cutbacks, lack of available credit, reduced foundation endowments, insecure corporate giving programs, scarcity of appreciated stock, and individual donors with less money and a lack of confidence.  Oh yes, and increased demand for services.

First and foremost:  In the coming year-end giving season, most nonprofits will be challenged to achieve their fundraising goals.   When people (and businesses and corporations) face hard economic times, and have to limit their discretionary spending, charitable giving is one of the first things to go.    This does not mean people are unwilling to give, but it does mean development professionals will have to be more strategic and more creative.

This is the time to re-visit your fundraising strategies.  Consider the current realities and revise your goals.  Do not fall into the trap of spending less on fundraising.  On the contrary, consider ways to improve your initiative such as evaluating your donor database to be sure it is the appropriate tool for you; convening your website team to reexamine your website content to ensure it is donor friendly and reliable; and making  donor communication count by upgrading your email and electronic newsletter processes.

Stay upbeat and do not become pessimistic.  If you communicate a sense of doom and gloom, no one will want to invest in your organization.  Find the right balance of transparency and honesty in conversations with donors.   Fundraising’s fundamental tenets of cultivation and stewardship will be of supreme importance during these hard times.  Spend more time working with your current donors rather than putting a big effort into new prospects.  Consider that although the good citizens of our community will be cutting back on their giving, they are not going to completely stop giving.    If you spend more time engaging your donors, it will be much more likely that you will retain their gifts. 

Whatever you do, don’t stop “asking.”  Hopefully you will be more compassionate than usual and more understanding of your donors’ personal situations.  But, do not apologize when asking for this year’s gift.  Reinforce the need and the fact that your organization fills a unique niche, the importance of which is more critical now, than ever.  Consider asking more often this year.  If you have pondered an additional appeal, or adding a second mailing to your holiday appeal, this is the year to experiment with that model.   

Creativity will be king in the coming years.  A challenge grant from a board member can be an interesting twist in helping to bolster year-end giving.  Monthly giving should not only be offered on your website but should be actively marketed to hesitant donors.  Proactively solicit precious matched gifts and show your appreciation to the donors and to the corporations that match them.

Finally, keep up with your own continuing education – follow trends and spend time brainstorming with your colleagues at other organizations.  Invest in the professional development and team building of your staff and the training and evolution of your board of directors.  With diligence, strategic development planning, and creative thinking, these hard economic times can be a period of growth for you and a period of refinement and maturity for your development office. Obviously, I am a proponent of consulting services year-round, in good times and bad.  However, it is particularly important in these times to engage some external input and put a few more heads together to consider ways of shifting gears in order to remain strong.

Good luck. 

Ruthellen

Ruthellen S. Rubin, CFRE
Development Consultant
For the Nonprofit Sector
www.developnp.com