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Fundraising In Times Of Strife

These thoughts have been compiled from our firm’s own experience in general, our experience during 9/11 and the Great Recession, as well as from thought-leaders at the Chronicle of Philanthropy, the leading source in the nonprofit industry. Key point: Don’t waste a crisis.

  • In times of uncertainty, many decisions around making gifts are delayed.
  • Communication. People will make up information in the absence of it. It’s absolutely critical to communicate with your donors, especially key stakeholder donors who represent the majority of your support. Knowledge is power. People like to be informed. Let them know what you’re doing to weather this situation, i.e. reconfiguring camp, or closing down the museum, or bringing in janitorial reinforcements, or halting volunteers going into schools. Let donors know what the situation means for the people who count on you.  And, be sure to let your donors know how much you care about their and their family’s health and safety too!
  • Foundation support.  The Chronicle suggests asking foundations if they will unrestrict restricted grants.
  • Donors have been accustomed to a bull market for the last decade. Now that it’s a bear market, some donors may pull back and some will not.
  • Be “easy” on your donors but don’t make assumptions about what they might or might not do. 
  • Even in huge economic downturns, some donors will be capable/willing to make commitments so don’t be afraid to ask on a case-by-case basis.
  • Even if people aren’t ready to make a commitment, stay in touch and nurture that relationship, i.e. I’ve been thinking about you and wanted to check in to make sure you and your family are well. If a commitment is pending, stay in touch but don’t bring it up – they will bring it up if they want to.
  • Some people want to help in the best of times and in the worst of times.
  • Some organizations are positioning themselves for receiving ‘relief’ funding. If that doesn’t apply to your organization, that’s okay – you can’t force it.
  • Confused donors do not make gifts; confused fundraisers do not make asks: know what you’re asking for.
  • Maybe ask for planned gifts during these times.
  • Ask donors to pay off pledges sooner if they are able.
  • Especially if people have down time, no theatre-going, parties, etc. – use this time to increase communication and add interest to their lives – share with them things they may not know.
  • Individual giving follows the GDP.  It’s predicted that Covid-19 will affect GDP so individual giving may decrease.
  • If the economy does take a sustained hit, corporations and foundations will likely decrease giving for the foreseeable future (foundation giving dipped dramatically during the Great Recession because most foundations operate on a 3-year basis and many lost 40% of their principal. When asked if they would increase, decrease, or maintain grants during the recession, most foundations said “Don’t Know,” which further reinforces how uncertainty leads to more uncertainty.
  • Most nonprofits and for-profit businesses that went under during the Great Recession were undercapitalized before it started.  They lacked the sustenance to withstand the uncertainty.
  • Depending on your financial situation, you may engage in some scenario planning, i.e. best case/middle case/worst case scenarios to determine your proper response, i.e.  borrow from reserves/endowment, expand lines of credit, cut back, reduce programming temporarily.
  • Use this time to plan, plan, plan and be ready to implement when things clear up, which they always do.

Bottom line:  do scenario planning, increase communication with donors, ask or start the conversations when appropriate/seems right, and don’t make decisions for our donors.

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