How Should a Nonprofit Respond to the Current Economic Situation?

Last week I posted a letter from development consultant and GiftWorks partner Ruthellen Rubin, CFRE, about the importance of supporting nonprofits during these tough times.  Here is her sequel, to address the question of "How should nonprofits position their fundraising initiatives in this inevitable recession?"   

-Mary Pat Donnellon

Dear Friends and Colleagues:

Last week I sent my fundraising colleagues an email about the importance of continuing to support nonprofits during these difficult economic times.  Thanks for your feedback and comments; they were most appreciated.  However one more email is in order; let’s consider the flip side:  How should nonprofit organizations position their fundraising initiatives in this inevitable recession?  Unless you have a large endowment cushion or significant cash reserves, you will face some unprecedented challenges due to government cutbacks, lack of available credit, reduced foundation endowments, insecure corporate giving programs, scarcity of appreciated stock, and individual donors with less money and a lack of confidence.  Oh yes, and increased demand for services.

First and foremost:  In the coming year-end giving season, most nonprofits will be challenged to achieve their fundraising goals.   When people (and businesses and corporations) face hard economic times, and have to limit their discretionary spending, charitable giving is one of the first things to go.    This does not mean people are unwilling to give, but it does mean development professionals will have to be more strategic and more creative.

This is the time to re-visit your fundraising strategies.  Consider the current realities and revise your goals.  Do not fall into the trap of spending less on fundraising.  On the contrary, consider ways to improve your initiative such as evaluating your donor database to be sure it is the appropriate tool for you; convening your website team to reexamine your website content to ensure it is donor friendly and reliable; and making  donor communication count by upgrading your email and electronic newsletter processes.

Stay upbeat and do not become pessimistic.  If you communicate a sense of doom and gloom, no one will want to invest in your organization.  Find the right balance of transparency and honesty in conversations with donors.   Fundraising’s fundamental tenets of cultivation and stewardship will be of supreme importance during these hard times.  Spend more time working with your current donors rather than putting a big effort into new prospects.  Consider that although the good citizens of our community will be cutting back on their giving, they are not going to completely stop giving.    If you spend more time engaging your donors, it will be much more likely that you will retain their gifts. 

Whatever you do, don’t stop “asking.”  Hopefully you will be more compassionate than usual and more understanding of your donors’ personal situations.  But, do not apologize when asking for this year’s gift.  Reinforce the need and the fact that your organization fills a unique niche, the importance of which is more critical now, than ever.  Consider asking more often this year.  If you have pondered an additional appeal, or adding a second mailing to your holiday appeal, this is the year to experiment with that model.   

Creativity will be king in the coming years.  A challenge grant from a board member can be an interesting twist in helping to bolster year-end giving.  Monthly giving should not only be offered on your website but should be actively marketed to hesitant donors.  Proactively solicit precious matched gifts and show your appreciation to the donors and to the corporations that match them.

Finally, keep up with your own continuing education – follow trends and spend time brainstorming with your colleagues at other organizations.  Invest in the professional development and team building of your staff and the training and evolution of your board of directors.  With diligence, strategic development planning, and creative thinking, these hard economic times can be a period of growth for you and a period of refinement and maturity for your development office. Obviously, I am a proponent of consulting services year-round, in good times and bad.  However, it is particularly important in these times to engage some external input and put a few more heads together to consider ways of shifting gears in order to remain strong.

Good luck. 

Ruthellen

Ruthellen S. Rubin, CFRE
Development Consultant
For the Nonprofit Sector
www.developnp.com

The Nonprofit Sector and These Economic Times

I would like to share a letter to the editor that one of our GiftWorks consultant partners, Ruthellen Rubin, CFRE, is sending to her local paper in Trenton, New Jersey.  Please pass her message along.

-Mary Pat Donnellon

TO:         The Times Editorial Board
FROM:     Ruthellen S. Rubin, CFRE
DATE:      October 7, 2008
RE:          Op-Ed Submission

Wall Street vs. Main Street? One thing is for sure, no more Easy Street. The headlines are so frightening that we are becoming numb to the repercussions of a stock market free fall and the end of our financial system as we know it. Who knows what the coming months will bring?

What scares me most is the impact on those charitable organizations that tackle the challenges no one else can, or will: the starving, the homeless, the disabled, the aged, the infirm, the addicted, the unemployed, the uneducated and anyone unable to help him/herself. Our nonprofit organizations are being hit with the “perfect storm” (and I don’t mean “perfect” in the positive sense.) Some of their most reliable funders such as Wachovia and Merrill Lynch are gone; government funding is shrinking at an alarming rate; foundations’ endowments are plummeting leaving less to give; costs of food and fuel have never been higher; and needy clients are lined up at the door in unprecedented numbers.

Connie Mercer, executive director of HomeFront, has never seen this level of demand: “We had a record 104 people lined up at our door for a free bag of groceries in one five-hour period last week. I estimate roughly a 20% increase in demand for food this month. The new faces we are seeing include well dressed, educated individuals and lots of elderly.”

At the Trenton Area Soup Kitchen, executive director Dennis Micai told me that demand is already up by 7-8% and donations are not keeping apace of that need. “I was really startled last week,” says Micai, “when an elderly couple who used to volunteer for us, came in for a meal.”

Connie Mercer told a similar story: “A lovely lady was waiting at the door when we opened up last Wednesday. She looked so familiar and told me it was probably because she “adopted” two homeless children last Christmas, buying gifts and clothing for them for the holiday. She never dreamt she would be coming to us for help. She was unable to pay her rent and about to lose the roof over her head.”

Holiday Appeal season, with its plethora of solicitations, will be upon us in the coming weeks. There will be pleas and unbelievably compelling stories asking us to support food pantries, hospitals, zoos, libraries, clinics, counseling centers, environmental causes, day care centers, schools, synagogues, and churches. Once again, we will be asked to donate, advocate, celebrate, run, walk, solicit, foster, promote and sponsor on behalf of the causes most dear to us.

So, how is it going to play out this year?

When all else fails, we turn to our family, friends and neighbors for help. Our local human service, health, educational and cultural organizations need us now more than ever. We are their family, friends and neighbors. Of course it will be more difficult for everyone as we are all struggling to pay the bills. However, this is the year we must be creative and consider where our holiday dollars can have the greatest impact. It is the year to give a donation in the name of our family members or friends rather than giving a fruit basket. I cannot think of a better year than this, to have a party and ask our guests to make a donation to our favorite charity rather than bringing us a bottle of wine or a red pillar candle. It is the year to show our children that there is always an avenue to be charitable, no matter how small the amount.

Undoubtedly, this year money will be scarce and you will have less to give. However I believe this community is capable of rising to the challenge in support of our nonprofit sector. It will be up to us, the citizens in Mercer County, to keep our nonprofit organizations strong and vigilant. They are the last resort for so many of our neighbors, and could someday, be the last resort for us.

Ruthellen S. Rubin, CFRE teaches fundraising and philanthropy at New York University. She is a consultant to nonprofit organizations in NJ and NY. www.developnp.com

Nonprofits in challenging financial times

Unless you’ve just been beamed down from Outer Space, you’ve probably heard we’re in the midst of a financial crisis. According to the media, nonprofits have especially been affected, as corporate and individual giving is down and the need for goods and services is steadily increasing. You can’t open a newspaper, turn on your computer, watch the news or bake a cake (my neighbor seems to show up the second I turn on my oven), without somebody, somewhere sharing gloom and doom about our current economic issues.

Don’t get me wrong, I certainly am not minimizing the pain this is causing. Even I, with my Pollyanna look at the world, understand the seriousness of the situation; but since talking about it isn’t going to make it go away, can’t we just find a glimmer of silver in the lining of that nasty old cavity?

What if, during these tough times, we stop and take a long, hard look at how we’ve been doing things? Where can we create efficiencies to make the most of our time, energy and limited resources? Answering these questions sometimes requires change. Change isn’t easy (Trust me, I know. I’ve had the same haircut since 7th grade), but change is progress.

Most of my professional life (you mean, there are personal ones?), I’ve been involved with nonprofits; it’s a world I know and love. I believe that qualifies me to ask nonprofits who want to do more with less, to take a look at GiftWorks. It helped me tremendously, which is why I’m so passionate about it. What, you think I get this excited for no good reason? I know it can make a difference, especially in these trying times.

While you’re checking out GiftWorks, here’s another suggestion to ponder. Since everyone is blaming someone else for our financial crisis, what if we harness the energy that’s generated from all those fingers being pointed and turn it into a renewable, sustainable energy source? Now that would turn a negative into a positive! Granted, it may take a while to catch on, but keep an open mind…..anything is possible!

-Pat Weaver

October 15, 2008: GiftWorks Day on Techsoup!

Nonprofit organizations - now, more than ever - need fundraising software designed just for them to efficiently and effectively raise the critical funds needed to meet their mission.

Day in and day out, all of us at GiftWorks are committed to helping small and medium-sized nonprofits achieve their goals by offering an outstanding nonprofit software solution at an extremely affordable price - which has never been more crucial than in these challenging economic times. 

On October 15, through our partnership with Techsoup, we are taking this commitment one step further.  For one day only, nonprofits with annual operating budgets of $200,000 or less will be able to request a license of GiftWorks 2008 Standard through Techsoup for only $99.  Techsoup is dedicated to bringing technology to nonprofits in many ways.  They host active and lively discussion forums, highlight news and information critical to nonprofits, and we are proud to have an ongoing partnership with them.

To request a $99 license through Techsoup, nonprofits must be registered with Techsoup prior to October 15, and can do so at www.techsoup.org.  If your organization is larger than the $200,000 threshold for this one-day event, do take a moment  to tell a younger or smaller nonprofit about this opportunity.  They will certainly thank you!

-Mary Pat Donnellon