All nonprofits are feeling a pinch these days, but it is the small, local or regional charities dependent on large annual gifts that are really experiencing the pain.
Before reaching for the Advil, consider the following: Giving will likely continue to grow through 2009, though at a slower rate than during non-recession years, according to the Center on Philanthropy at Indiana University (COP), which studied giving patterns during the last 40 years. Organizations today have the opportunity to learn from the past to determine which strategies are recession-resilient and which less stable options may be adjusted for better results.
In an economic downturn, it is more important than ever for nonprofits to have a strategic fundraising plan in place and a combination of tools to soothe aching budgets. Carefully consider the following tips to help keep your nonprofit’s hurt to a minimum in 2009.
Overall, it will be important to focus on individual giving: The largest portion of overall fundraising during recessions (80%) comes from individual givers, according to COP. And, President Obama recently showed us that a lot of people giving a little can really add up.
Curtail or re-purpose large galas or costly events: It is true that many top fundraising galas are suffering from low turnouts and smaller gifts―even the Washington D.C. chapter of American Red Cross postponed an $800-per-plate gala to save money, according to The Washington Times. Although networking opportunities and see-and-be-seen prospects of well-designed galas played well to credit-rich trends of recent past, many donors are shying away from such displays of wealth in favor of more subtle means of giving. Instead, consider creating lower-tier ticket opportunities; swapping costly events for smaller, mission-aligned gatherings; or seeking donations “in lieu of event” for a targeted list of urgent, micro-philanthropy needs.
Avoid spending too much time and energy on engaging new corporate support: Five percent of fundraising comes from corporate support, which on average declines 1.5 percent in times of economic recession, according to COP. Although corporate foundations will not typically back out on earmarked gifts, they may be less able to fund new beneficiaries. Instead, focus on servicing, communicating with and adding value for existing corporate supporters to maintain or grow current funding; creating new ways to recognize supporters; establishing opportunities to showcase success; and proactively seeking in-kind assistance. There may be opportunities to harness corporate assets and channels to raise “other people’s money” via turn-key fundraisers, while the company enjoys the “halo” of your partnership.
Cut back, but do not eliminate, direct mail: It is true that everything costs more these days, and that includes paper and postage, making direct mail one of the more costly ways of staying top-of-mind with donors. However, direct mail can still be an effective strategy, even in a recession. In fact, direct response fundraising makes up close to 60 percent of giving, according to the Direct Marketing Association, and COP reports that 62 percent of organizations surveyed reported gains over time using direct mail. To lower costs, consider paring down your contact list to active donors and continuing to contact them; saving money on list-purchases that may not payout; and enlisting loyal supporters to make the ask for you through “dear neighbor” campaigns, as people are more willing to give to charities supported by friends and loved ones.
Bolster e-fundraising: For cost-effective communication vehicles, you cannot beat the Web. In November 2008, the Salvation Army activated its “Online Red Kettle” campaign with a goal of raising $1 million―by January, they raised $926,000. Therefore, focus on leveraging existing technology to its fullest and carefully consider investment in technology that may pay off. Consider transitioning important acquisition strategies to less costly e-fundraising techniques versus direct mail; moving select fundraising transactions online; creating “pledging” opportunities for individuals to give over time, such as regular monthly donations and automatic credit card deductions; and inserting viral “friends asking friends” tools across e-mail or Web solicitations to enlist donors as your best recruiters.
Create turnkey fundraisers: Again, by focusing on achieving several small gifts from many individuals, there are ways to create delightful “experiences” that will inspire gifts and create relationships with your organization. Consider inspiring donors to co-create fundraisers with you to reduce costs, such as bake sales or marathon parties; creating simple offline or online auctions; seeking gifts in-kind to bolster net proceeds; encouraging local alliances or companies to sell paper icons or conduct change collections or round-up fundraisers that are inexpensive but lucrative.
This article was written by Anne Erhard, vice president in Cone’s cause branding practice. It originally appeared on Cone's Web site, www.coneinc.com.