5 Rules for Fundraising in a Recession

By Judy Keller, Vice President
Midwest Region

Much has been written about the current economic climate and what past recessions have done to the philanthropic sector, and it may be a bit overwhelming for your organization's leadership to stay on top of the literature. Just remember, through all disasters, crises, wars and recessions, total giving in the United States over the past 40 years has increased every year except one (1987). Americans are incredibly generous, and, as nonprofit professionals, we must stay not only informed but committed to our organization's mission. These five rules will help you during a recession.

1. Focus
   It is all too easy for development and executive directors to become managed by their colleagues and the issue of the moment. In our efforts to be accessible to our staff, we often pride ourselves in an open-door policy and an interest in each individual. But fundraising during challenging times requires focus. The executive, development and marketing staff must focus on fundraising and encourage the board to do the same. This requires strict time management to ensure donors are the priority and the proposal gets written today, not tomorrow. Do not allow your organization to stop fundraising simply because the times are uncertain.
   
   
2. Prioritize
   Every well-run organization has a long-range strategic plan with articulated goals for the coming years, but during economic uncertainty it is critical we prioritize need. Is the capital campaign you plan critical to your mission?  Is every operating expense necessary?  Do you have ample operating reserves (at least three months) to carry you through unwanted changes on the revenue side, should they occur?  What is the most pressing need now, in the donor’s mind?  
   
   
3. Concentrate on current donors
   Because donor acquisition is generally more expensive than renewal, this is the time to focus on those who already know and support your organization. Watch your renewal rates carefully and work to secure each and every relationship. If a donor withdraws support, seek a personal meeting to learn why, and to see if the relationship can be preserved. Be open to pledge payment schedule changes and non-cash gifts. 
   
   
4. Be patient
   Know your donors well enough to “pre-ask” if this is the best time to seek a gift, but be careful not to assume too much. Donors are still making significant gifts and it is presumptuous of us to assume now is not a good time. Ask when you can come back and stay in touch in the interim.
   
   
5. Communicate
   Practice transparency. Allow donors to understand your challenges and opportunities. They want your organization to succeed, and many—especially the major donors—have expertise and influence that can help. Remember those who have already pledged want you to achieve your goals. Let them help you. Seek their wise counsel and be open to their advice. Provide updates and explanations. Treat them as genuine partners, not just donors, and you will have the long term support you need.