How to Fundraise During a Recession
By: Laura Ralph
Laura is a writing wizard with over a decade of experience in higher education and medical philanthropy.
Recession?
While experts decide whether we’re currently in a recession, an economic slowdown is upon us. And a poor economy presents real challenges for the charitable sector. Especially with some organizations still reeling from the pandemic, and most grappling with skyrocketing costs on everything from paper and postage to staff and rent.
The Good News
There’s good news? Turns out, there is.
We’ve been here before. Since 1980, the charitable sector has faced four recessions, including the Great Recession. And after each downturn, nonprofits have bounced back. Right along with the rest of the economy.
If you’re in doubt, look at the graph below showing Total Giving to US charities from 1980 to 2020. After every dip, there’s a recovery.
Now that’s something positive to hold onto.
Giving USA Total Giving 1980 to 2020 via Winkler Group
How to Fundraise During a Recession
But just because economic slumps are temporary doesn’t mean all nonprofits get through unscathed. A negative economy can make or break a charity.
Much is outside our control - the global economy, for one thing. However, there’s a lot your organization can do (and not do) to stack the odds in your favour. Recessions can even be a time when great gains are made for charities who take the right approach.
In this resource, you’ll learn nine ways to recession-proof your organization’s fundraising plan and help your charity grow through whatever economic challenges lie ahead.
1. Stay the Course
When money is tight and revenue slows, our first instinct may be to make aggressive budget cuts, trim resources, and halt new projects. It’s an immediate and natural response to danger, triggered by the most primitive parts of our brain.
But this type of reaction often proves disastrous. During the Great Recession of 2008-2009, experts found charities that saw “catastrophic failure” were those that went silent and made large cuts to their fundraising and marketing budgets. Sadly, many of these organizations no longer exist, and those that do are struggling.
Thankfully, humans evolved beyond the “reptilian brain” and developed the ability to think beyond the immediate threat of what is likely a short-term economic decline. While fear and emotion may inform our thinking, they don’t have to rule our decisions.
Not surprisingly, organizations that kept the big picture in mind and stayed the course during the Great Recession of 2008-2009 were the ones who came out stronger than before.
2. Invest
While fear tells us to flee from fundraising and freeze spending, our creative mind is constantly looking for opportunities to learn and grow. And while it may seem counterintuitive, one of the best ways to thrive during a recession is investing strategically in fundraising and marketing. You’ve got to spend money to make money - even during an economic downturn.
When the economy slows, competition for donors becomes fierce, making it an ideal time to invest in a professional overhaul of your fundraising case for support, recurring donors, and stewardship practices.
Case for Support
Revisit your case for support. Does it tell a good story? To test it out and build relationships, seek feedback from your donors.
Don’t underestimate the power of words and images to captivate your donors’ hearts and minds and inspire their support. A compelling case is almost always worth investing in, especially when donors are choosier about their charities.
Recurring Donors
Regular, consistent givers in the form of monthly donors provide the ongoing and reliable revenue you need. They’re also one of the best sources for legacy gifts and are among an organization's most loyal supporters.
If you don’t have a recurring donor program, it’s definitely time to start one up. And if you’ve got a recurring program already, think about how you can show this loyal group some extra appreciation for seeing you through thick and thin.
Stewardship
High-quality stewardship is essential to retaining and upgrading your donors. So when revenue is low and donors are a flight risk, it’s time to take your stewardship to the next level. For more tips on stewarding donors, check out Frontier FM’s podcast #47 or their resource on how to improve your stewardship.
3. Keep Fundraising
There’s no better way to guarantee your revenue tanks than by slowing down your fundraising efforts. Your cause exists for a reason, and the need remains, especially during times of economic hardship.
Your supporters know this, too. And when their awareness of financial need is high, donors are more likely to give.
But most donors still need to be asked. If you stop asking donors to support your cause, not only are you making decisions for them, you’re sealing your own fate.
The frequency, timing, and tone of your offers may change. But one thing is for sure, you must keep asking for money.
4. Don’t Underestimate Your Donors
Donors give to your charity because they’re invested in your cause. Never underestimate their loyalty and generosity. Your work matters to them, and for most, giving feels good.
While many donors will be impacted by an economic downturn, they’re also the ones who care most about how the economy is affecting the beneficiaries of their support. Tell them what you’re doing to help and how their dollars are making a difference.
And remember, donors don’t care how the recession impacts your organization’s bottom line – they care how it impacts the community you serve. While the two are intertwined, your cause is an easier sell than your operating costs.
5. Avoid Assumptions
Keep in mind that financial slides affect everyone differently and avoid making assumptions about who can and can’t continue to give. The pandemic economy saw a decline in some industries and a rise in others. Gifts to charities reflected these patterns.
6. Innovate
When bumps or blockades emerge in the road, call on creativity and innovation to develop workarounds. They may leave you to be better off than when you started.
Monthly donors on a decline? Instead of losing them altogether, try preemptively phoning to ask how they’re doing and whether they’re comfortable donating at their current level given the economy.
Give donors an alternative to cancelling their gift by offering the option to reduce their contribution by a modest $5 or $10 a month. Donors who are struggling will appreciate your sensitivity to their situation, and your odds of retaining them will increase, too.
7. Communicate
In the absence of information, people tend to create their own stories about what’s happening. This is especially true during stressful times, like a recession.
You can instill confidence in your donors and prevent misinformation by providing direct and regular communication. Address the current reality head on, explain how you’re responding, and seek feedback from your community. Don’t sit on the fence or wait for another organization to make the first move.
When the pandemic hit hard in BC, no one was sure how charitable organizations would respond. I’ll never forget the first charity to send an email directly addressing the global pandemic and their stance on the crises.
This organization nailed it.
They responded to the situation quickly and clearly, leaving no time for donors, beneficiaries, volunteers, or employees to doubt their ability to handle a crisis. They instilled immediate confidence and grained trust by sharing their plans right away. And, as the first organization to make a statement, their authenticity was unquestioned. Plus, they stood out as industry leaders.
8. Value Relationships
With fewer people giving to charity than ever before and those who donate consolidating their giving to their preferred organizations, it’s never been more important to invest in donor relationships. This is particularly true during an economic downturn when we expect donors to focus their philanthropy on the causes they care most about.
While you can't control the economy and how your donors fare, you can control how often you reach out to connect and engage with your supporters. Your goal is to stay top of mind, so your donors think of you first when they’re ready to give again.
9. Offer Hope
Charitable organizations are uniquely qualified to offer hope and optimism to the world, especially during difficult times. They’re in the business of providing confidence and assurance that things will get better.
Consider this lift created by Frontier for the Welcome Mission Hall. It’s a feel good reminder of their amazing work delivering food and hope to families, elderly and disabled clients, and children. Not to mention it’s simple, clever, and jam packed with impact.
Remember all that’s good about your organization and what you do. Then, seek out opportunities like lifts, newsletters, annual reports, and social media to share your inspiring stories with your community.
Stay the course with optimism and hope, and you may come out the other side with more supporters than when the financial downturn started.
Sources
Browning, Jessica. (2022, May 17). Six Ways to Recession-Proof Your Fundraising. Winkler Group. Six Ways to Recession-Proof Your Fundraising - Winkler Group, Fundraising Consultants
Booker, Erin. (2022, August 8). 12 Essential Nonprofit Fundraising Tools to Get You Through a Recession. Funraise. 12 essential nonprofit fundraising tools to get you through a recession (funraise.org)
Further Resources
Pitman, Marc A. Recession-proof Fundraising. FundraisingCoach.com Recession-proof Fundraising: Fund raise in any economy (fundraisingcoach.com)
Fundraising in Recession: 8 Tips for Uncertain Times. CheqrPay. Fundraising in Recession: 8 Tips for Uncertain Times - CheqrPay
Pirtle, Aja May. (2022, January 1). The Future of Fundraising: Declining Donors – A Rallying Cry for Innovation. ADP Advancing Philanthropy. The Future of Fundraising: Declining Donors—A Rallying Cry for Innovation | Association of Fundraising Professionals (afpglobal.org)
IUPhilanthropy. (2022, May 2). Fundraising for a Recession: Stay the Course. [Video]. YouTube. Fundraising for a Recession: Stay the Course with The First Day Podcast from The Fund Raising School - Bing video
Haynes, Emily. (2022, July 19). Inflation and the Possibility of a Recession Have Fundraisers Worried. The Chronicle of Philanthropy. Inflation and the Possibility of a Recession Have Fundraisers Worried (philanthropy.com)
Screen, Steven. (2022, June 20.) Better Fundraising in Today’s Economy. TheBetterFundraisingCo. Better Fundraising in Today’s Economy | The Better Fundraising Company