Advancing an Organization During Challenging Economic Times

As nonprofit organizations tally results for 2008, many nonprofit leaders are concerned about how to focus their efforts to survive whatever this year may bring.

While we all recognize that these are challenging times for all sectors — nonprofits and for-profits alike — there are important lessons we’ve learned from experiences during past economic downturns that will help us all this year and in the years ahead.

What are we seeing?
First, let’s take a look at the current landscape. What are some of the significant trends reported by nonprofit organizations now?

Event Fundraising — Not surprisingly, many corporate sponsorships are diminishing, and it's taking twice as much work to try and match previous years’ results.

Direct Mail — Rates of participation are slipping, and the average gift amount is declining.

Campaigns/Major Gifts — Decisions are taking longer on requests that are made, intermediate benchmarks are being revisited and campaign timelines are being extended.

What are we hearing?
Major corporate, foundation and individual donors are reacting to the current crisis in several significant ways:

• Individual donors are placing greater focus on their own core charities and showing a willingness to ride out the storm with those organizations on whose boards they sit or where they are very involved.

• Corporations are telling us that their charitable giving is among the first budget items being cut, and they're making drastic reductions in corporate giving, event sponsorships and other opportunities.

• Select foundations are rising to the occasion. National foundations and large regional foundations are stepping up their grant awards to help organizations weather the storm.

Preparing during the downturn — being ready at the upturn
While times now are critical, one need only look back to the beginning of this decade for another (albeit not quite as acute) challenging economic environment that came about post Sept. 11 and the dot-com bust — and the subsequent 30 percent drop in the Dow Jones Industrial Index. Many shrewd organizations with strong messages and strong leadership used the downturn to their advantage. Here are two examples:

1) A newly created healthcare organization in Southern Maine with no board, no donors/database and no advancement staff worked on strategic issues, such as board development, campaign planning, messaging, and an organizational and feasibility study.

With a strong case and committed leadership, early champions were identified and brought on board, new friends were introduced and the power of personal connections created a buzz for the organization. Its planning work during the downturn in the economy allowed it to be ready when things started to improve. It recruited a strong board, completed a campaign and built a new facility, raising more than $5 million as a “start-up” enterprise.

2) Having successfully completed a capital campaign that raised $15 million, in the mid `90s a private secondary school in Boston was looking toward its next campaign with a goal of $40 million. While the timing was less than ideal, the school’s leaders did their homework, communicated their vision, “pre-sold” it to potential donors and made good decisions as they conducted a planning study that yielded important insights. They developed their messaging and case; and they recruited strong leaders for the subsequent campaign. They appeared prescient, as they closed their campaign in 2000, having raised $51 million, before the market meltdown.

A 10-point plan for advancing your organization
It is important to remember that history tells us the economy will improve. Despite major setbacks over the last 50 years (wars, corporate scandal, terrorist attacks, international turmoil), this has always been the case. In the meantime, certain measures will improve your organization’s resilience.

1. Have a plan for "right now." Develop an immediate short-term action plan to address the specific challenges and opportunities relevant to the institution.

2. Increase activity. Don’t stop or pull back; rather, take measures to increase activity, including visits and briefings with donors and friends, and frequent and targeted communications with all constituencies.

3. Motivate. Redouble efforts to help motivate everyone with a stake in fundraising — development staff, administrative leadership and trustees — by reminding them of the resilience of philanthropy in tough times.

4. Open new doors. Encourage trustees and volunteers to help open doors and introduce new potential supporters to the institution.

5. Increase prospecting. Reorder prospect lists to reflect the current state of affairs. Undertake research to help identify new potential donors and sectors of support.

6. Encourage challenge gifts. Explore the possibility of donors making challenge or matching gifts to stimulate giving from others and multiply the impact of their gifts.

7. Share philanthropic information. Share important results and good news to motivate leadership and temper expectations.

8. Introduce payment flexibility. Provide donors with greater flexibility in fulfilling their commitments, including extended payment periods, and planned and deferred giving opportunities.

9. Reaffirm mission and impact. Reaffirm your organization’s mission and continuously remind donors of the impact and urgency of philanthropic support.

10. Explore diversification. Wherever possible, explore practical ways to diversify your fundraising program; for example, by establishing or expanding a planned-giving program.

Flexibility with donors and internally within your organization will bolster fundraising efforts. Weak economies may result in longer campaigns, lowered benchmarks and reordered prospect charts.

However, economic downturns also can offer certain opportunities for diversifying a donor base, establishing or expanding a planned-giving program or offering more volunteer opportunities.

Keep your cause in front of people, constantly reaffirming your mission. Make sure people understand how important their support is, in whatever form. Take advantage of the moment to educate your leadership, reinforcing fundraising fundamentals. Then, when the time is right, your team will be fully prepared when the economy is on the upturn.

Brian Nevins is senior vice president and managing director with the fundraising consulting and management firm CCS.