Nonprofit Fundraising in a Financial Downturn

Nonprofit veterans have been through this gauntlet before. The anticipated revenue from your nonprofit fundraising forecast in the budget starts to lag. Month after month the issue compounds, and things work out poorly on the expense side due to rising costs associated with inflation across the service sector.

First, the emergency brake gets applied. Then the scissors come out.

Programmatic expenditures get frozen; positions that open naturally are not filled; the under-performers and expendable are let go. This is the hallmark of reactive management, and the playbook is predictable.

Implementing a proactive strategy versus being reactive

A proactive strategy focuses on eliminating problems before they wreak havoc. A reactive approach is based on responding to events after they occur. Simply put, great leaders are proactive, and mediocre ones only react.

So, why wait?

Nonprofit leaders cannot control the economy. They can make sure that they are streamlined and effective on the expense side of the ledger. And they can focus on the thing that can avert the funding crisis. Grow the pie.

How does this apply to nonprofit fundraising?

As the economic landscape becomes more challenging, a core base in the funding stream for many nonprofits will be impacted. Individual giving to the annual appeal and recurring donations both may take a hit. Therefore, two strategies can focus your attention to ensure the desired outcomes.

Creativepreneurs and nonprofit fundraising  like flowers in a meadow.

Proactive investments can ensure growth during the downturn

Strategy Number One: Cultivation of supporters as advocates

As individual donations start to shrink, enlist past supporters to help you widen your base through their networks. Involve them in your solution. This is primarily a donor communications strategy that involves radical transparency coupled with a clear set of follow-up steps for your lapsed and “underperforming” donors. Stop hounding them to give. Instead, enlist them to get. Convey you recognize we are all in the financial challenge together. Celebrate their value, so they know they are included as an integral part of your team. Then, set out a clear path they can take on your behalf.

Strategy Number Two: Prospecting beyond your current horizon

While the first strategy is focused on shoring up your current base, here we will focus on finding new sources of revenue. Assess how many grants you are applying for to meet your budget. What would it take to double that number?

The value of investing your resources specifically into grant writing is that these targeted sources of revenue, primarily foundation, will not be impacted to the same degree as the rest of the economy. To effectively grow your list will require a prospecting strategy that can think creatively and expansively, to uncover opportunities that have not appeared on your radar to this point.

Implementing this strategy will require additional bandwidth. You cannot double your current output without adding to your grant writing capacity. But unlike expanding programmatic expenditures, if done well, the investment here will bolster your fundraising at a rate far exceeding your expense.

If you could use support implementing either of these proactive strategies, consider getting in touch.

Leave a Reply

%d bloggers like this: