Fundraising In The Teeth Of The Recession, Learn What Our Clients Have to Say

HOME

SUBSCRIBE TO ZIMNOTES

• NEWS

• WORKSHOPS

• TEST YOUR
NONPROFIT IQ

• SEARCH

Fundraising In The Teeth Of The Recession: Learn What Our Clients Have To Say

This is the second of a two-part series on nonprofit fundraising in a recessionary period. The first article, "Mounting a Successful Capital Campaign During a Recession," described the techniques that ensured the success of one nonprofit's capital campaign. The current article is based on interviews with staff at 18 past and present client organizations and focuses on how a range of nonprofits have coped in this extraordinarily challenging time.

By Bob Zimmerman (ZimNotes Vol 13 #4 July 2010)

Overall, the clients whom we interviewed had roughly equal amounts of good and bad news. For example, on the positive side, three nonprofits generated more revenue from their 2009 holiday appeal than ever before, five increased the size of their development offices in late 2009 and early 2010, and three secured significantly more foundation grants in 2009 than in the previous year. Those that added development staff felt that an increased emphasis on cultivation of donors and research on grantors would pay off in the not-too-distant future. The three nonprofits that did well with foundations were "safety net" organizations focused on food, clothing and shelter.

...the loyalty of past and current donors is the single most important fundraising consideration for nonprofits in these troubled times.

The other side of the coin: five organizations received fewer foundation grants in '09 than '08. Said one development director: "I write twice as many proposals for half as much money." Three fared worse with their annual events in '09 than the year before, three received less corporate support than the year before, and three saw their reserves dwindle considerably.

Let's see what overall lessons can be drawn from our interviews concerning the impact of the recession on nonprofit fundraising.

First, the loyalty of past and current donors is the single most important fundraising consideration for nonprofits in these troubled times. Certainly our readers understand that fundraising is a relationship-based business in good times and bad. What we discovered in these interviews was that approaching strangers for donations and grants during a recession (whether foundations that had not received proposals from these nonprofits before or individual donors via acquisition direct mail campaigns) was virtually useless.

What worked instead was to approach past and present donors to fund new projects or in some cases to give at significantly higher dollar levels. One person marveled at the success of his organization's major donor campaign. Referring to his nonprofit's ability to secure larger gifts from folks who had heretofore given only modestly, he said "Things are looking really good for us." Understand, too, that the three nonprofits referred to above that did well with their holiday appeals mailed primarily to past and present donors, not to new prospects.

Second, other than stimulus money, government grants are in shorter supply than before the recession. The executive director of a medium-sized social service agency said she was forced to close three programs in 2009 due to cuts in county funding. Another blamed reductions in retirement and health benefits on reduced government funds, and a third said "When it comes to government money, flat is the new up." With the crisis facing virtually all state and local governments, it is unreasonable to assume that nonprofits will benefit significantly from governmental largesse in the near future.

Third, the recession requires nonprofits to take a closer look than ever before at earned income. Whether running a thrift shop, charging tuition, selling items through the mail or offering training sessions for a fee, it is imperative that nonprofits give serious consideration to non-philanthropic means to secure revenue. While earned income is not a strategy that works for all nonprofits, Zimmerman Lehman fervently believes that many organizations have earned income potential that they have not realized. The socially responsible investment community-big players now in philanthropy-appreciates both social good and decent financial returns. These investors are impressed by nonprofits that do not depend solely on philanthropy for their revenue.

The final lesson is this: organizations that have had the courage to expand their development staff during the recession are positioned far better than their competitors to thrive when conditions improve. The investment in additional fundraising staff will enable nonprofits to cultivate more prospects, prepare more proposals to grantors, and ensure that the organization "covers the waterfront" when it comes to fundraising. Too many nonprofits are spending money at present only on program-related expenses. The refusal to invest in fundraising now will, we believe, have dire consequences in the future.

If you would like to discuss how Zimmerman Lehman might assist your nonprofit to do well in this challenging economic time, please don't hesitate to contact us.

This information is the property of Zimmerman Lehman. If you would like to reprint this information, please see our reprint and copyright policy.