Strengthen Fundraising Before the Next Recession

I am by no means a financial genius. I confess that during the “Great Recession,” I kind of stopped looking at the statements from my retirement funds. So when I heard an interview on the radio the other day with two experts—one saying we were heading to another recession and one saying we were already in a recession—I felt my stomach drop to my toes.

A few days later, an article in The Chronicle of Philanthropy stated, “The bumpy start to 2016 is unlikely to have an immediate negative impact on charitable giving as long as it doesn’t last too long” and referenced a report released by Indiana University Lilly Family School of Philanthropy and Marts & Lundy that predicts, “Charitable giving in the United States is expected to grow by 4.1 percent in 2016.” Great! I’m feeling better now.

Whether or not a recession is here, coming, or somewhere in the far distant future, one thing can’t be ignored: fundraisers need to manage a program that—while maybe not recession-proof—is constructed in such a way that one more recession won’t force the nonprofit organization out of business.

Heavy political campaigning via mail, online and phone may hurt some fundraising efforts in 2016. Foundations may hold back if the stock market doesn’t bounce back and resume its upward projectile. A problem in foreign markets could impact corporations’ profits. Weather may keep everyone home from an event, a website may go down at a key moment, someone else’s social media fundraising event may take attention away from everyone else . . . the potential for fundraising catastrophes is seemingly endless.

In order to survive the economic ups and downs, a fundraising program must be balanced.

A fundraising program that survives the economic ups and downs and continues to deliver long-term is one that is on balance. It isn’t built on one strong program only. It isn’t even built on one strong program and a bunch of little ones. Instead, it is a like a stool with several thick, strong legs. If one leg is chopped off by an economic downturn, other legs are strong enough to keep the fundraising stool balanced. There may be a loss of income, but enough other income sources are contributing in ways that are significant that the nonprofit can carry on.

Forget rivalry between online fundraising and offline fundraising—we have to do both. The same is true with major donor fundraising and lower level donor cultivation; small dollar donors are the pool for future middle and major level gifts, and it’s risky to let that pool run dry.

In every fundraising department (and even more-so when you are the only fundraiser), making choices is a daily struggle. There are only so many things you can do, and trying to do too much can lead to mediocre performance in everything. But creating balance in your program is absolutely essential. If you need to rebalance your fundraising stool, start now to find affordable assistance to strengthen some other legs on your stool. If some legs are still scrawny despite your continual efforts to build them up, consider moving your investment in them to other areas that are showing more promise.

Steven Lawrence, director of research at Foundation Center, stated this in the Chronicle article: Foundations “are going to be very cautious and pragmatic about . . . determining their levels of giving to ensure that they don’t find themselves having to cut their grants budget.” If foundation grants are one of the thick legs on your stool, the time to evaluate what other legs are on that stool—and if they are robust or barely hanging on—is now.

The tough part about fundraising is that we really can’t do everything we need to do, ought to do, and want to do. But managing a balanced program is essential for the next economic downturn and beyond.

Originally published in npENGAGE.

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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