In times of economic uncertainty, fundraisers often face an uncomfortable question: How do we continue raising essential funds when the economy takes a downturn? With talk of a potential recession on the horizon, many nonprofit leaders are seeking guidance on how to navigate these difficult waters.
Preparing for Economic Challenges in Fundraising
Brandon Borke, Vice President of Development at Young Americans for Liberty, recently raised a vital question that many fundraisers are asking: How do we fundraise during a recession? His question highlights a crucial concern, especially for organizations that have thrived during a period of economic growth. Brandon asked about the impact of previous recessions on fundraising and how organizations can not only survive but thrive during economic slowdowns.
To answer these questions, I reached out to Kathleen Patten, President and CEO of American Target Advertising, a leader in direct mail fundraising for nonprofit organizations. With decades of experience and a proven track record, Kathleen’s insights offer valuable lessons for any organization preparing for tougher times.
Three Storms Facing Fundraisers Today
According to Kathleen, we’re already dealing with three major challenges:
- Inflation: Rising prices are impacting everyone, especially older, fixed-income donors who are typically the most generous.
- Fuel Prices: High fuel costs increase the price of shipping and distribution, impacting direct mail campaigns and other logistics.
- Supply Chain Disruptions: These challenges have driven up the cost of materials like paper and limited the ability to innovate in terms of mailing strategies.
With these pressures already affecting the fundraising landscape, a potential recession could amplify these issues. As Kathleen warns, “If we get hit with a fourth storm – a recession – the problems will be compounded. And that’s not an easy storm to ride out.”
What Fundraisers Can Do to Weather the Storm
Despite these challenges, Kathleen offers key strategies to help organizations continue to thrive:
- Focus on New Donor Acquisition: Even in tough times, prospecting for new donors remains essential. Organizations should not abandon their efforts to acquire new supporters.
- Segment and Target More Effectively: If response rates drop, tighten your list segmentation to target your most likely supporters. Focus on delivering tailored, relevant messages.
- Stand Out with a Clear Brand: Donors are more likely to support organizations that present actionable solutions to the causes they care about. Ensure your messaging highlights your unique impact and sets you apart from the competition.
- Invest in Major Gifts: While smaller donors may be more consistent, major donors are often more sensitive to economic downturns. Strengthening your relationships with key donors is crucial in challenging times.
The Importance of Adaptability and Innovation
Kathleen also emphasizes the importance of staying flexible and adapting to the economic environment. “Too many groups send out letters that ‘cuss’ at the problems but don’t offer solutions,” she notes. In a competitive landscape, donors gravitate toward organizations with a clear plan for making a difference.
Moreover, while some organizations may reduce their outreach efforts or trim acquisition budgets, Kathleen sees opportunities for growth, particularly for those that can demonstrate their ongoing relevance and effectiveness. “Donors are still passionate about causes,” she says, “but they’re looking to support groups that have a real plan to do something.”
Key Takeaways for Fundraisers: Prepare, Don’t Panic
Economic downturns don’t have to mean disaster for nonprofits. In fact, with the right strategy, organizations can continue to grow. Kathleen’s advice offers a clear roadmap:
- Don’t stop prospecting for new donors.
- Lean into your brand and clarify your organization’s value.
- Strengthen your relationships with major donors.
- Adapt to the shifting landscape, and don’t shy away from innovating.
By taking these proactive steps, fundraisers can continue to make an impact even in difficult economic times.
Final Thoughts
As we navigate an uncertain economic future, it’s essential for nonprofits to remain focused on their mission while being flexible and strategic in their fundraising efforts. Tough times may test us, but with the right approach, they can also present opportunities for growth.
