The Nonprofit Market: A Look Back and a Look Ahead

Looking back on the year, 2009 can be characterized as a rollercoaster ride for nonprofits. Fearing the worst, the industry so far has seen an 11 percent decrease in donations, according to a September 2009 report by the Charities Aid Foundation and National Council for Voluntary Organisations. This has been especially hard on small organizations, with many of them getting squeezed out by their larger, more national counterparts. At the same time, many charities with similar missions have come together, creating partnerships or merging in order to survive the economic downturn — and ensure the proper support for their causes. Although this has been a difficult time for nonprofits, 2009 has made organizations aware of how they need to shape up.

Surviving in 2009: Lessons Learned
During the recession, nonprofits learned how to maximize efficiency. Many organizations had to take a hard look at cost-saving measures and strategically spend where donations could be directly impacted. Unfortunately, nonprofits cut head count and reduced expenses; meanwhile, they had to find new ways of getting tasks completed — with less staff and resources — while keeping contributions from falling. The industry saw organizations turn to automating manual job functions and sharing infrastructure and technology to be more effective in the challenging economy.

Throughout the past year, nonprofits also took steps to re-evaluate poor management. With limited staff, organizations have learned how important it is for everyone to work together as a team. They understood the need for greater focus on business processes and increased awareness of what occurs on a day-to-day basis. This has allowed organizations to run more smoothly and be better prepared to face the operational challenges that might arise, especially for when the global economy begins to pick up over the next year.

Most importantly, nonprofits learned how critical it is to never forget the basics. Organizations re-aligned their Key Performance Indicators (KPIs), monitored them closely and adjusted their development plans to maximize fundraising opportunities. During the recession, nonprofits realized that they no longer could solely rely on corporate giving. They saw the need to have more well-spread funding, forge better donor relationship and refocus on retention due to the hard economic times.

Nonprofits have an opportunity to learn from these experiences and thrive with the recovering economy in 2010. They have used the past, difficult year to re-evaluate everything they do and see what practices work best for them. The strategic improvements that already have started to be made will better position nonprofits for the next year and beyond.

Surviving in 2010: The Open Road
Organizations should focus on the donors they already have, and try to form closer relationships with their most loyal followers. Those deeply invested in an organization are the best ambassadors; if they feel more engaged, they will want to give even more. The need is greater in a downturn, and people’s stories are more compelling; therefore, donors typically do not mind being asked to do more than just give. Have existing donors reach out to their friends and family to bring in new volunteer opportunities. If this group of donors is truly devoted to an organization, they will be excited to encourage others to get involved. Maximize touchpoints by building a culture for peer-to peer fundraising. Incorporate supporting features into the Web site, and remember to include the organization’s core messages with every personal request. It is important to build upon the brand, so that an organization can begin to build a new donor pool — with the help of the existing one.

Use social media to keep the audience interested. Many nonprofits have been hesitant to use social media, but more have been adapting to it. Why not take advantage of another communications channel to reach existing and future donors? Using tools such as Twitter and Facebook will not necessarily be the magic bullet for fundraising purposes, but social media will raise awareness by providing donors with weekly, daily and real-time organization updates. Donors also can join groups and connect with others that support the cause. People who are thinking about donating may look to these sites for more information and to see what is happening in the community, so don’t forget to highlight the appeals, initiatives and needs. Adding social-networking technology to an organization’s Web site in the form of individual profiles, discussion forums and blogging capabilities, is a great way to add value to the donor base — without adding a significant amount of work.

Invest in technology. It is important for nonprofits to take a look at the technology they have invested in. See if there are more ways to save and benefit from the technology the organization currently is using. Nonprofits also can use technology to analyze information about their donors. They can find out why people give, what will make them give more and what events have triggered them to continue giving. Having this information will assist an organization in finding new donors and reaching out to them in a more effective way.

Looking ahead to 2010, it seems nonprofits simply will have to work harder to maintain their income. Although it will take time for giving levels to rise, nonprofits are in better shape to take advantage of the rebound than they were earlier in 2009. The lessons learned during the downturn will help organizations find more creative approaches in the future.

Robin Fisk is senior fundraising executive at Advanced Solutions International.