The media is full of stories about how this Covid-19 coronavirus is impacting the economy. Gatherings are getting canceled. People are self-quarantining. And donors who are freaking out watching their investments shrink.

Last month, I shared some ideas on fundraising in an age of the Covid-19 coronavirus. Since then, stock markets have been on a roller coaster and oil producers are waging an ugly pricing war.

What is a nonprofit fundraiser to do? Keep calm. And pivot. We've never been here before but we can learn from the past recessions we've been through.

Recessions and rumors of recessions

In my time as a nonprofit fundraiser, we've seen recessions related to the dot-com bust, the 9/11 attacks, and the housing market implosion around 2008 and 2009.

These times are not fun. But nonprofits can survive.

Back in 2008, I wrote a couple articles on recession proof fundraising and fundraising in a recession. These are still applicable.

3 Biggest Mistakes Nonprofits Make in the Face of a Recession

In times of economic flux, nonprofits learn how well they've really been doing at growing relationships with supporters. If we're basically just invoicing them, they'll fall away when money gets tight. But if we've been showing them the impact of their gifts, they're more likely to stay, albeit not necessarily at the pre-recession giving levels.

As we're in this uncomfortable time, remember to avoid these three things.

  1. Becoming Pessimistic

    As we watch the news and talk to others, it's really, really easy to let fear and the unknown paralyze us.

    But we can't allow it to.

    Our causes still need support. Especially as the economy goes wonky.

    The top fundraisers are some of the most optimistic people on the planet. Not out of touch, but definitely optimistic. They see possibilities where no one else does. They are willing to try new approaches when others aren't. And they raise the funds to change the world.

    Fear and worry is natural. Just don't let it consume you.

    What to do: When you feel fear consuming you, get out a list of the people who've donated in the last twelve months. And start making thank you calls. "Hi, this is [Your Name] with [Your Org]. I just wanted to call to say 'thank you' for your recent support. Your gift is [what impact it's doing]." No ask. Just gratitude. Gratitude overcomes fear. Because gratitude rekindles hope.

  2. Cutting fundraising and marketing budgets

    This I've never understood. When money gets tight, the knee-jerk reaction seems to be to cut the fundraising and marketing budgets. It's like saying, "We have to drive across the country. So we are not going to put anymore gas in the tank."

    Illogical. Nonsensical. And a sure fire way to raise less money. You'll blame it on the recession, but your under-funding the programs makes it a self-fulfilling prophecy.

    A recession could be a convenient time to let go of staff or programs you haven't had the guts to let go yet. But don't stop there. Look for the right people for the positions you have.

    What to do: Rather than cutting budgets and staff, seek to make the programs and people more effective. If you don't understand marketing, make sure your marketer does. Marketing touches done well can double as donor touches too. And if you're not a professional fundraiser, do not give in to the ego temptation to think you're an expert. You're not. Any more than you're an expert on brain surgery or rocket science. So seek fundraising experts. And listen to them. (Chances are, you already have them on your staff.) Learn from them why the best nonprofit storytelling for donor retention talks about the donor and your mission without mentioning your organization. And why the best fundraising letters aren't reserved like a business letter but are more chatty like with your aunt.

  3. Apologizing for asking

    In recessions, or the times before recessions, it can be very tempting to stop asking. We think we're being nice to donors. Giving them space. But we're not. There's nothing compassionate about not asking.

    For many donors, giving is a key part of them feeling human. They can be generous, despite the scarcity around them. So ask.

    And there's nothing compassionate about letting your organization go bankrupt. Your nonprofit was started because something was wrong. If that something is still wrong, the world needs your work. And that work needs funding. So ask.

    Your ask will be different than before. Where it used to take 6 or 7 attempts to reach a donor, it is already starting to take 10 to 12. So be patient. And keep at it.

    I call this "pleasant persistence". We're pleasantly polite, not letting any hint of irritation infect our attitude. And we're persistent.

    This really does work. Back in 2009, in the midst of the greatest recession since the Great Depression, Milton Hospital had me in to train their board on how to ask without fear. At the training, the development staff passed out prospects names for board members to assign themselves to contact. The result? They increased their annual fund by 40% - in a recession!

    What to do: Be pleasantly persistent. And avoid the temptation to make decisions for donors. You have no idea if a donor will give until she tells you. Your not asking is robbing her of the honor of making up her own mind. So be understanding, polite, and pleasantly persistent. People were still giving. And they will still be giving. It just might take more time than before the recession.

Challenging but not Impossible

This is a challenging time to be running a nonprofit. Belts will need tightening. Just be sure they're the right belts. And make sure you're measuring the right outcomes in both marketing and fundraising.

I recently heard a marketer say they couldn't put their whole television ad spend into the right target audience. When they invested it all where their best prospects were, their CFO felt they were wasting money. Why? Because he didn't see any ads. It didn't matter to him that he wasn't the right demographic. And he didn't watch the shows that their best prospects did. So this marketer knew they had to spend 80% of the ad budget on the right target audience but 20% on the CFO's shows so he'd feel the money was doing good.

As you look at where you can cut budgets, don't be like that CFO. Make sure you're measuring the right outcomes, not just feeding your ego. For example, an AHP study showed that hiring more successful fundraisers helped organizations emerge from the recession more quickly than their peers and with stronger donor relationships.

These times will be challenging. But they don't have to be impossible. Especially if you avoid these 3 most common mistakes of fundraising in a recession.


Update March 19: On March 18, Cherian Koshy, Development Director at the Des Moines Center for the Performing Arts did a training in The Nonprofit Academy on how this Covid-19 coronavirus is impacting fundraising and communicating with donors. We've removed the paywall so you can watch the entire thing, including answers to viewer questions at: https://thenonprofitacademy.com/trainings/new-normal/

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