Finding a Way to Fundraise During a Recession
by:
Allie Freeland
In 2008, when the nation began its dive into a recession, large and small businesses across the United States began the miserable and lengthy process of slashing budgets. Non-profit organizations, however; were tasked with the additional challenge of unearthing contributions in the midst of the country's economic downturn, a time when not only companies were cutting costs, but households were also seeing a rapid reduction in disposable income. Now any historian will tell you that economic vacillations are inevitable, but the onset of a major recession can leave even the most seasoned Development Director shaking in his or her boots and wondering, “How in the world do we move forward with fundraising?”
As one can imagine, directive articles have accumulated on this very topic of fundraising in financially challenging times, but slogging through the masses can be almost as overwhelming as the task of fundraising itself. In light of this fact, the following five pointers have been compiled on some of the soundest tips for fund development professionals during an economic downturn.
1. Be cognizant of, but not paralyzed by, national reports.
On June 30, 2010 the Pew Research Center released a sobering report on the effects of the recession on American lifestyles. The study indicated that of the households polled, 57% percent had cut back on or canceled vacations, 27% had experienced problems paying medical bills, 20% had difficulty paying mortgages, and 15% had increased credit card debt to cover their living expenses. (Staff, Pew Social Trends, 2010).
As a mainstream reader, findings like these could lead to negative assumptions about the state of philanthropy in our country, but non-profit organizations should proceed with caution when interpreting statistical data. Samplings of the country's economic behavior are just that - samplings - and don't necessarily provide a definitive blueprint for every community. Using national reports as a litmus test of the environment is generally good practice, but only to a point. When they start to become the primary road map for fundraising efforts, development plans can become more reactive than proactive.
2. Strengthen existing relationships with donors.
Take this time to reach out to donors, especially those who have provided significant and extended financial support. Cultivation of donor relationships is always vital to future giving, but many non-profits make the mistake of easing off communications, often as a means of reducing expenses or minimizing extraneous interference with their donors' busy schedules. However, keep in mind that as an investor in the organization and its mission they will appreciate hearing how their investment is being used to continue the positive efforts of the organization.
For those who are still new to an organization's pool of contributors, this is the perfect time to let them know just how much their donation means. Lawerence Henze, managing director of Target Analytics writes, “…donors, members, and prospects do not stop caring about your mission during a recession. How you compassionately manage your relationship with your constituents in the next few months will create opportunities for future growth when the economy improves.” (Henze, 2008)
3. Clean up the organization's database.
Now is the time to take a good, hard look at your donor database. Individuals and businesses who have been sitting on your low-level appeal list for the last few years with no indication of giving may need to be moved to an “inactive” file. Fundraising experts Mal Warwick and Dan Doyle suggest taking the “top 10 percent or top 200 individuals” as your focal group and temporarily setting aside the remaining names (Warwick & Doyle, 2008). During economic declines, blanketed appeals need to become more targeted and strategic.
4. Take advantage of online fundraising opportunities.
If you have access to electronic fundraising tools (such as Active.com, Constant Contact™ or even Facebook™) make sure you are maximizing their capabilities. Make the process as simple as possible for your donors, incorporating a “donate” button on electronic appeals and newsletters and web pages (Warwick & Doyle, 2008). Not only are online appeals cost effective, but many agencies are also finding that donors are more likely to give larger gifts electronically than through the mail.
5. Have faith in the strength of the mission.
Although fear regarding the willingness of people to give can be a legitimate concern during economic downturns, non-profit organizations need to remember the relevance and importance of their mission. At the end of the day, it is the heart of the organization that motivates a donor to give and not the slickest campaign or latest fundraising tactic.
Perhaps most important during economic shifts is a non-profit's ability to stay positive: just as a rise in the economy eventually leads to a fall, so does a fall eventually lead to an upsurge. In other words, there will be a light at the end of the tunnel. Non-profit organizations that stay focused and committed to a well directed fund development plan during turbulent times will eventually find themselves on the other side of the recession with donors who respect them for navigating their way through, and with stronger set of skills to take on challenges down the road.
Henze, L. (2008, November). Raising Money During Challenging Times. Retrieved February 14, 2011, from Blackbaud Website.
Staff, Pew Social Trends. (2010, June 30). How the Great Recession Has Changed Life in America. Retrieved February 11, 2011, from Pew Research Center: Social & Demographic Trends.
Warwick, M., & Doyle, D. (2008). Thought Leadership from Mal Warwick Associates. Retrieved February 8, 2011, from Mal Warwick Associates
About the Author:
Sarah J.S. Dixon, M.B.A., is an adjunct instructor at Rasmussen College at the
Fargo, ND college campus. In this position, she instructs students seeking on-campus and online degrees in areas including:
healthcare management and other business specializations.
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