Five Tactics to Rev Up Fundraising in a Down Economy

Many nonprofit professionals today are nervous. The economy, while showing hopeful signs such as slightly lower oil prices and a stronger dollar, is still not in a good place. That means donors have less money in their portfolios and their pockets.

As a result, giving is down across the board. This is not how we want to enter the all-important year-end giving season. With up to half of all donations coming in the last quarter of the calendar year, nonprofits need to start planning now so they can end the year strong.

There are five simple things any organization can do to not only increase year-end results, but also maintain and even strengthen important long-term relationships with donors.

1. Connect with your donors’ pain.
Higher gas and food prices affect everyone, every day. Acknowledge this joint burden while relating it to how much more these increased costs impact your organization and those you serve.

Americans are the most empathetic and generous donors on earth. Donors can immediately relate to how much rising prices affect poor parents struggling to feed and house their children. They can now easily understand the transportation cost burden for an organization serving elderly, shut-in people or a group helping a needy college student travel home for the holidays.

Articulating the challenges we all face in a difficult economy creates a sense of community and can be a welcome reminder for donors that, even in challenging times, they have much for which to be thankful.

2. Call mid to major donors now.
Don’t wait until November and December to connect with your most valuable donors. Assign key organizational leaders or representatives to call top donors to discuss year-end giving and planning.

Convey your understanding of and empathize with the challenges they may well be facing with their personal finances. At the same time, be clear and honest about the challenges your nonprofit is facing.

These are your organization’s “closest friends,” so treat them as you would a friend. Naturally, providing for their families’ welfare must come first, and they may need to reduce the size or number of contributions they make this year. Encourage and help them in this, and you further cultivate an even stronger relationship that will provide significant support for your nonprofit for years to come.

By doing this in September, you’ll create more accurate projections for income from this key group. Contact them again in the November/December time frame, as things can change even in two months — schedule this follow-up call when you talk the first time — but at least you will not be caught unprepared if giving levels do not meet budgets and expectations created last year when the economy was better.

3. Begin year-end campaigns in September with installment options.
Begin your direct-marketing appeals earlier. Not only does this help get your messaging in front of donors first, it allows you to offer donors installment options.

These options can make giving at previous levels more manageable. While a single $300 or even $75 gift given last December might seem too much when cash is tighter this year, donors might be more receptive to giving a year-end gift in three monthly installments of $100 or $25.

Provide this option online or by sending a special reply device (or even three return envelopes, which has been very successful) with your mailing. You are providing the donor value by creating an innovative giving option that recognizes his immediate needs, while still allowing him to help others.

4. Use alternative giving vehicles.
Most organizations are aware of the success of giving catalogs and other alternate giving methods like adoptions. Create attractive giving vehicles that donors can use as presents for others.

For zoos, aquariums, and wildlife and animal welfare groups, a special animal adoption that includes a certificate, a fun educational book and a plush toy is a great gift for children that also supports the organization’s work.

For an arts organization, use premiums like tickets, a poster print or an exclusive music CD sent when a donation is made in someone else’s name.

Create tangible premiums related to your mission and allow the donor’s friends or relatives to receive an actual gift of value as a reminder of your organization’s mission and what has been done in their name.

5. Focus on segmentation and target total net income (not return on investment or revenue).
This is a great time to evaluate your donor segmentation and ensure that you are focusing on the most productive donors. Evaluate each segment by the net income it produces (profit after all costs).

The common mistake is allowing ROI or response rates to drive decisions about not mailing or calling certain donors. The reality is that while response rates or ROI could improve by cutting certain donors, your total net income will decrease. This means you have less money at a crucial time to spend on programs and services.

Contacting donors with lower response might involve greater cost, but that is inconsequential if more dollars come in the door and segments are still reasonably profitable.

Now — versus the thick of the holiday season — is the time to get creative and innovative about your fundraising. Focus on empathy, not guilt or scare tactics. If you empathize with your donors and allow them to empathize with you and the people you serve, this year-end could produce results that sustain you through a difficult economy and also build long-lasting donor relationships.

Randy McCabe is the founder and CEO of MPower.