Consider these fundraising strategies to prepare your nonprofit for an economic slump and keep your mission active.
As millions across the U.S. seek to recover from the economic fallout of COVID-19, nonprofit work is more vital than ever, resulting in increased awareness for certain types of nonprofits, including health and food assistance organizations, career training services, and advocacy groups. However, the same economic upheaval driving the need for nonprofit services may hamper many organizations’ ability to raise the funds needed to continue their work.
“This is something that we’ve never had to deal with as a community,” says Jennifer Foster, Vice President and Relationship Consultant for the Endowments and Foundations group at Regions Bank.
To keep nonprofit fundraising healthy during a recession, it’s important to refocus on your core supporters, reduce expenses wherever possible, and adapt your strategies to overcome challenges and take advantage of new opportunities. Follow these steps to get started.
Stay Connected with Your Base
Even in thriving economies, keeping your donors engaged and regularly connected to your organization is integral to maintaining their support. During uncertain times, it’s even more essential.
“It’s especially important right now for nonprofits to communicate to donors that your mission is still viable. Even if you are having to change the way you work, even if it’s going to be harder, you still need support,” Foster explains.
With the goal of renewing their support in your cause and keeping them engaged, your messaging should tell donors your plan and let them know the exact impact their support makes.
If you haven’t, review your donor list and identify your most valuable donors. Send personalized communications to your largest and most loyal supporters to thank them and let them know their value to your cause. If you already communicate directly with your top donors, consider doing the same for other longtime donors — even if they typically give lower amounts.
“If you have donors that are extremely supportive of your mission, they are going to do what they can no matter where the economy is,” Foster says. “Their gifts might be smaller or might look different, but your donors are going to continue to support as long as they have been communicated with.”
Review Your Balance Sheet
Nonprofits running on slender margins might be in the hole if they see a drop in fundraising. If that’s the case for your organization, you’ll need to take a critical look at your revenues and expenses and take advantage of every available resource you can.
Investigate any relief options that may be available. Additionally, contact your organization’s lenders and ask about any relief options they may offer. If rent is a major expense for you, ask if your landlord is offering any flexibility, as well. Foster suggests, “If you have endowments, this may be a good time to use some of the interest from those to help cover shortages elsewhere.”
If you are still at a deficit, you may need to make some difficult decisions.
If your nonprofit is in an untenable position, cutting to the most minimum expenses in the short-term may help your organization preserve enough resources to restart your programs when your position is more secure.
Adapting to a New World
While we can’t predict how quickly the economy will recover, we can anticipate lasting changes after an economic downturn — and nonprofits need to meet those shifts.
“You had nonprofits that always did things one way, just because that’s how they’d always done them,” Foster explains. “Now, they are having to challenge themselves and think outside the box.”
For example, during the COVID-19 pandemic, some organizations have been successful converting from large in-person fundraising events to other models. According to Foster, some groups have found success with online silent auctions, virtual conferences, and more. Plus, new fundraising models that succeed in the current landscape might continue to be a preference for donors even after the dust settles.
“People appreciate nonprofits thinking outside of the box to give them a way to support while maintaining their safety,” Foster says. “Create a way to continue your mission, even if it might be different than anything you’ve done before. That may even open the door to new income opportunities.”
While an economic downturn may influence charitable giving, you can take steps to prepare your nonprofit. Be thoughtful in your messaging and explain how your mission is still viable. Keeping your core donors engaged, reducing your expenses, and finding new ways for people to support your cause can help you continue fundraising and grow your nonprofit’s endowment fund even throughout times of economic instability.
For further guidance, learn more about our nonprofits, endowments, and foundations capabilities.
