Inflation, the Great Resignation, and the war in Ukraine are all causes for fear and heartbreak. But now is not the time to pull back on fundraising, particularly as demand for services remains high.
At the beginning of the pandemic—and during the 2008 recession—many nonprofits fell silent. They didn’t want to trouble their donors during a time that was so challenging. But today, those nonprofits are feeling the impact of their actions. They failed to capitalize on two years of record giving.
In 2020, total giving rose by 5.1 percent according to Giving USA. The Blackbaud Charitable report issued last month indicates giving in 2021 was up another 9 percent (Blackbaud Institute, 2022). Leadership donors stepped up and made sure their favorite organizations—the ones who kept communicating with them throughout the pandemic—were supported. They demonstrated what it meant to be an investor in solving major challenges.
It’s important to remember that the stock market and consumer confidence are cyclical. Yes, the stock market fell in January and February of this year. And yes, consumer sentiment is down according to the University of Michigan’s Surveys of Consumers (Curtin, R). But these metrics will improve. They always do. And organizations and institutions that prepare for the rebound will come out on top. Those that focus on the difficulties of the moment will bear the consequences of their decision for years to come.
Our Advice
The Winkler Group was founded in 2004; we have seen our share of external challenges impacting the field of philanthropy. Here are our recommendations to weather today’s storm.
Keep Communicating
Do not stay silent. Prove your value to your donors by sharing with them how you are responding to today’s crises. Universities are hosting timely geopolitical roundtables—share these discussions with your donors. Nonprofits are providing gas cards to their clients to help address the rising cost of gas—highlight this on social media or in your next e-newsletter. Hospitals continue to respond to COVID and prepare for the next variant—let donors know how you are keeping your community safe and healthy.
It’s important to prioritize and spend the most time on your major donors. But don’t stop there. Remember that today’s lower-level and mid-range donors are tomorrow’s major donors. Develop a plan that engages all levels in different but meaningful ways.
Retention Before Acquisition
Pay attention to your donor retention rates. The Association of Fundraising Professionals’ newest Fundraising Confidence Survey, which was conducted in late December 2021 and early January 2022, found that donor retention was identified as the biggest priority facing fundraisers today, as it has been in most versions of the Fundraising Confidence Survey (AFP Global, 2022). And that’s because donor attrition is a massive problem in the fundraising world. Today, less than half of the average organization’s donors (43.6 percent in 2020) will give again the following year (AFP Global, 2021).
We spend enormous amounts of time and resources to actively recruit new donors, only to watch them walk out the door the next year. It takes far less time and resources to keep the donors we already have in our database. And the results are impressive. Not only do we see renewed revenue year after year, but those donors become more loyal. They eventually become our major donors and then our leadership capital campaign donors.
Steward Your Staff
It’s hard to provide services or advance your mission if you have a revolving door of staff. Treat your staff the way you treat your donors so they will stay and continue to contribute. Read our latest blog To Stop the Great Resignation, Shift to the Great Retention for tips on how to retain your key employees.
Avoid Crisis Talk
Claiming you’re in a serious crisis will raise money, but think long and hard before playing that card. Unless your crisis is the life or death of your organization, avoid creating a panic. Crisis messaging may raise money in the short term, but it often backfires in the end and can seriously erode the confidence your donors have in your organization.
Pull Out Your Strategic Plan
If your strategic plan has been gathering dust on your shelf, it’s time to pull it out. Make sure it’s still relevant and still designed to move your mission forward. If not, consider revising it. Strategic plans should be nimble enough to capture new opportunities and respond to external factors. Reviewing your strategic plan should not be a staff-only exercise. Pull back in the original members of your strategic planning committee which hopefully included some external voices.
Involve Your Key Stakeholders
Always remember the adage, “when you ask for advice, you get investment.” Keep your key stakeholders in the loop as you recession-proof your organization or confront serious realities. Involve them in key decisions whenever possible. This recommendation is not disingenuous; it’s likely that your key stakeholders are successful in their careers and can provide significant wisdom should you need to grapple with challenges.
About the Authors
As founder and CEO, Tim Winkler provides the overall strategic direction, vision, and day-to-day management of the firm’s practice. He serves as a national director of the Giving Institute and is a Certified Fundraising Executive (CFRE). Throughout his 30+ year career, every campaign he has led has met or exceeded its goal. He has a B.A. from Wheaton College and an M.A. from Columbia Biblical Seminary.
Jim Bush, Winkler Group Principal and President, has been a fundraiser for more than 30 years. Recognized as an expert in his field, he’s helped nonprofits, universities, and healthcare systems raise more than $300 million and increase their organizational capacity through strategic planning. A noted lecturer, trainer, and teacher, Jim’s articles on fundraising have been published in leading nonprofit journals. He serves on the Giving USA Editorial Review Board and holds a bachelor’s degree from Elon University.
Jessica Browning, Winkler Group Principal and Executive Vice President, has helped lead nonprofit organizations for more than 25 years. An award-winning case statement writer, Jessica is a specialist in donor communications and a former member of the Giving USA Editorial Review Board. Jessica received a B.A. from Duke University as well as an M.A. and M.B.A. from the College of William & Mary.
References
AFP Global. (2022, February 28). 2021 ends with highest fundraising confidence levels in past two years. Association of Fundraising Professionals. https://afpglobal.org/news/2021-ends-highest-fundraising-confidence-levels-past-two-years
AFP Global. (2021, March 15). Fundraising effectiveness project: giving increases significantly in 2020, even as donor retention rates shrink. https://afpglobal.org/fundraising-effectiveness-project-giving-increases-significantly-2020-even-donor-retention-rates
Blackbaud Institute. (2022, February). 2021 charitable giving report. https://institute.blackbaud.com/charitable-giving-report/
Curtin, R. (2022, February 11). Preliminary results from the february 2022 survey. Surveys of Consumers, University of Michigan. https://data.sca.isr.umich.edu/fetchdoc.php?docid=69390
