Crisis Management in Fundraising

After this school year, a private school for inner-city students closed one of its two campuses. Although a generous donor had funded the first 10 years of its operations, the staff had been unable to secure enough funding after the grant ran out to continue its operation. It was a difficult decision but the only fiscally responsible one.
From a fundraising perspective, having to shut down a program or project that many donors support can be daunting. The potential of losing those donors is very real, and avoiding that attrition can be the reason many nonprofits put off the difficult decisions until it’s too late to salvage the rest of the important work they are doing.

“The cold fact is that it takes money to run this organization,” the director of development (whom I will call Greg) told me. “From a fundraising perspective, our goal was to assure our constituents that although this was a difficult decision, all the prudent and necessary steps had been taken.

“The process began last November,” he continued. “Management did an assessment of various scenarios and determined that the potential risk was a loss of 25 percent of their income.”

Despite this potential crisis from a fundraising standpoint, “Our most important and highest concern was our students, faculty and parents,” he said. “Our focus had to be doing all we could for those who are in our care. It became so easy to know what to do next once we knew the priority.”

As I worked with the school to develop messaging for its constituents, I was impressed with the lengths the development staff went to in communicating with its partners. So I asked permission to share the school’s learnings, as unfortunately, bad things do happen to good nonprofits, and some of us may find ourselves in a similar challenging situation at some point in our careers.

Manage the situation; don’t let it happen to you
As noted earlier, the school began the decision-making process several months in advance of finalizing it. Staffers knew there was risk with donors, and they knew the public relations fallout could be significant.

“We wanted to make it clear that we remained a viable, vibrant charitable option and, in the best case, show that this actually strengthens the organization,” Greg said. “The rumors will get you more than the reality, so we had to effectively manage the situation.”

Provide an atmosphere where it’s safe to have vulnerable conversations
As the management staff weighed options, made its decision and moved forward, staff members knew they were free to ask tough questions and express concerns to one another.

“These transformational events actually crystalize relationships,” Greg told me. “We have a shared experience now.”

Reach out personally to donors most likely to react negatively
The development team identified donors who were most at risk of cancelling their support and contacted them personally. The staff members “offered ourselves up to hard questions,” as Greg explained it. “In conversations, the most important thing was that I wanted to answer any questions a donor had about what we could have, should have, would have done. There is simply nothing better than walking toward the issue.”

Limit your focus on the day-to-day events that are most important
“Every fundraising shop has to guard against over-fragmentation of its time,” Greg noted. “We asked, ‘What activities will have an impact on our key success factors?’ That’s what we focused on. By making sure they put their energies into the essentials, letting nonessentials slide so they could focus on managing the closure process and maximizing fiscal year income, the school was able to stay on track with its fundraising goals.”

Remember: It will pass
“It’s going to be tough,” Greg stated. “But you will get through it. A few of those you think you can count on will let you down, but others will surprise you. Be steady. Be clear. It’s the leadership’s job to provide assurance to others. There’s no way you will foresee everything (but we were sure going to try!), so you have to let it go when something doesn’t work according to plan.”

So, did it work?
Greg reported back to me that all but one of the at-risk donors renewed their support. The almost universal reaction from donors was, “I’m sorry you are going through this. I wish I could do more.”

The staff worked to find new schools and scholarships for displaced students and the school is supporting its faculty in finding new positions. Staff members are truly emerging from this crisis stronger and more unified as a team.

Few of us look forward to crisis situations, and having to make hard decisions that affect people’s lives is stressful. But Greg and his team did what was necessary to manage the situation, support one another and communicate honestly with their donors. Their openness and thoughtful handling provide a great model for anyone going through a challenging time.

Originally published in NonProfit Pro.

Author: PJBarden

With a professional career in strategic fundraising that spans more than 35 years, Pamela brings a wealth of experience and knowledge to working with nonprofit organizations. She specializes in writing fundraising copy, grant proposals, P.R. materials, instructional articles and blog entries, as well as developing and executing fundraising strategy for her clients. Pamela is a Certified Fundraising Executive (CFRE); an instructor for UCLA Extension School’s Fundraising Certification Program and the University of La Verne, College of Business and Public Management; a frequent webinar speaker; and author of two online courses for UCLA Extension. Pamela earned a Doctorate of Business Administration in 2015; her doctoral project (dissertation) was entitled “Nonprofit Organizations’ Awareness of and Preparation for Legislation, Regulation, and Increasing Scrutiny.” She is a past winner of a Gold Award for Fundraising Excellence and an ECHO Award from DMA; recipient of a Distinguished Instructors Award from UCLA Extension; a weekly columnist for NonprofitPRO (formerly Fundraising Success); and a monthly contributor to Blackbaud’s blog, npEngage.

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