The economic outlook in most of the world right now, including the US, is bleak. Unemployment is high, rates of return on basic investments are low, and many people have cut back on their charitable giving because they simply don’t have as much disposable income as they used to. This has caused many non-profits, particularly small ones, to rethink their fundraising strategies.
Economic recessions are a fact of life… they come and go on a regular, though unpredictable schedule. Because of this fact, organizations that last over the long term must learn to not only survive tough economic times, but to continue growing and thriving through these cycles as well. This means that non-profits must learn these key lessons on how to fundraise in tough economic times:
1. Don’t Stop
The most important thing to remember about fundraising in tough economic times is this… don’t stop. Even if you have a rainy day fund or endowment that you can draw down, don’t stop fundraising during recessions. People might not be giving as much as they used to, but they are still giving.
Continuing your fundraising activity will not only help your reserves last longer, but will also continue the relationship you have with your current donors, so that when good times return, those donors will continue to be “your” donors. (For more on donor relationships, check out Major Donor Fundraising 101).
2. Communicate with Your Current Donors
Be honest with your current donors. Let them know that despite the economic downturn, your organization’s needs remain. Remind them about the good work that you do. Let them know how much their continued support means to you. Most of your current donors will continue to give to your charity if you stay in contact with them, even if they aren’t able to give at the same level they once did.
You should also consider approaching some of your core donors to let them know that the economic situation has hurt your fundraising, and to what extent. Let them know that you aren’t in danger of closing your doors (unless you are) but that you may have to scale back services or growth. Some of your donors may step up to the plate and make a major gift, particularly if they have a long history with your organization.
3. Continue Growing Your Donor Base (Cheaply)
Don’t stop at just communicating with your current donors… even if times are tough, you’ve got to keep growing your donor base to both replace current donors who stop giving, as well as to position you for the coming economic recovery.
If you’re conserving resources, though, you’ll have to make sure that you are growing your donor base cheaply. Generally, an economic recession is not the time to launch an expensive direct mail prospecting campaign, or do a major website overhaul. Instead, focus on building your fundraising network by asking your board, donors, and volunteers to open up their own networks to your group, make introductions, and help you raise funds from new sources. (For more information on growing your base, check out The Top 8 Ways to Increase Your Prospect List).
4. Build up Reserves
Finally, a reserve fund or endowment can be a great buffer against economic downturns or “bad” fundraising years. When the economy returns to full-strength, launch a strategy that will allow your non-profit to put funds away into savings and/or endowment accounts, and be prepared for the next time the economy weakens.