Interesting article on Jeffrey Byrne & Associates website:
Lately I have been asked by donors, nonprofit organizational leaders and board members to comment on the recession, how nonprofits should respond, and how to position their fundraising programs.
First, let me tell you I took one economics course as an undergraduate student, and I’m not an economist. Just like millions of other Americans, I worry about what the recession will do to the good work that millions of nonprofit organizations do for their constituents.
Second, we must face the reality that dramatic slowing or even negative GDP (gross domestic product) growth is a fact, and that further declines in production, retail sales, income and employment are upon us. The signs are becoming more and more evident that the U.S. economy did, in fact, enter its current downturn somewhere in late 2007. Dr. Ben Bernanke, Chairman of the Federal Reserve Board, has stated that the U.S. may be entering a period of weakness.
That being said, the history of philanthropic giving in the United States supports the notion that our nonprofit sector has weathered every economic downturn since we began tracking how Americans give more than 50 years ago.
A business and marketing expert recently offered the following advice to for-profit businesses seeking to learn how to deal with current economic conditions: “Consider the race car driver,” he said. “When you’re approaching a curve, give it more gas.” Sales experts tell us that tough times mean you should be looking for more leads to fill your sales pipeline.
A recent report in The New York Times points to the potential of this year’s economic stimulus checks as an opportunity for some nonprofits. While national surveys suggest that only three to four percent of those receiving rebates plan to donate at least a part to charity, an average gift of $1,000 per taxpayer in that group would result in a $5.2 billion windfall for nonprofits, according to our Giving Institute colleague, Robert Sharpe, who has analyzed economic stimulus giving on the heels of IRA incentives in Congress’ Pension Protection Act.
According to Sharpe, the key is for charities to recognize that, while 95 percent of the people getting rebates need them to pay for “necessaries,” the five percent who can afford to give away the proceeds from their stimulus checks means a lot of potential giving to the nonprofit sector.
So, what strategies can you deploy to buttress your nonprofit and ride out the economic slump? How have you positioned your organization to weather this recession?
First, consider your own “pipeline.” Put more emphasis on donor cultivation, donor communication and articulating your mission and purpose than on asking for the dollar. By focusing your energy and your message, you are getting ahead of the curve.
Think about your competitors. Smart organizations look for partners to help them in an economic downturn. Share your story with other organizations that do similar work. Strengthen your program and message by forging collaborations. See if you both can’t become better organizations by outlasting the economic downturn.
Don’t look back, look forward. Devise special messages for donors. Let them know what’s going on in your organization. Don’t be afraid to ask for special help. Now, don’t cry wolf if the wolf isn’t at the door. But for so many organizations, the wolf is at the door. Reach out and don’t be afraid to ask for what you need. Your best donors will respond. Don’t be timid. Those who are timid in tough times will lose.
By following some of these strategies, you will strengthen your fundraising to help you outlast the downturn and speed into the recovery