Don't Freeze, Don't Panic: Advice for Surviving Turbulent Times
The economy has wreaked havoc on organizations large and small, local and national. But the economy isn't the only thing that can mean turbulence for organizations. Natural disasters, heated election cycles and a shift in public perception of a cause, among other things, all can rock the boat. No matter what the cause, there are things fundraisers can do to get through tough times.
In the session "Fundraising in Turbulent Times" at the DMA Nonprofit Federation's 2009 New York Nonprofit Conference last week, three fundraising professionals shared general and case-based tips for other organizations on weathering storms, no matter what the cause.
Ellen Cobb Church, principal, president and CEO of Craver, Mathews, Smith & Co., said the current fundraising scenario is the oddest she's seen in her 25 years in the fundraising sector. It's not a time for fundraisers to panic or freeze up. Some things she suggested you can do include:
- Mail efficiently. Talk to your production people to find out how.
- Be honest with donors. If you're having a hard time and need money, tell them. They want to help.
- Conduct constant re-evaluations. Reforecast and reproject. This helps you, senior leadership and your board know where you are.
- Use online to supplement other channels. Church said times of turbulence are good times to make sure your revenue streams are diverse.
- Listen to donors. How do they want to be communicated with? Keep them engaged.
- Change course when necessary.
- Don't give up!
Co-presenters Heather Wallace, director of marketing for City Harvest, and Marjorie Spitz-Nagrotsky, director of development of Americans United for Separation of Church and State, each described how their organizations have navigated through the past 12 months. They looked at their organizations’ behavior in the midst of the struggling economy and other recent challenges from four perspectives:
- Internal measures, i.e., what was happening behind the scenes.
- Creative measures, e.g., steps they took in direct response regarding how to communicate with donors: What are they doing differently now? What are they doing the same?
- Analytical and financial measures
- What comes next? Now that they made it this far, what are their plans for the coming year?
Case study: City Harvest
For City Harvest, internal measures included identifying key challenges of the economic downturn. New York was the epicenter, in many ways, of the collapse. Lehman Brothers, one of the organization's key corporate donors, was lost; the NYC job market, especially on Wall Street, was hit hard; and there was an increased need for food throughout the city.
The organization conducted focus groups in August 2008 to gauge opinions to inform messaging. What these uncovered is that City Harvest donors are highly motivated to end hunger; newsletters and direct mail are donors' communication vehicles of choice; and statistics are important to donors. The organization's direct mail typically is rather plain, with no premiums, photos or teasers. The focus groups confirmed that donors like this.
City Harvest established consistent, organization-wide messaging in which it:
- planned to use focus-group findings in all external communications, including fundraising materials;
- increased flexibility of direct response schedules to permit relevant messaging despite the highly volatile character of the economy; and
- leveraged the increase in media coverage of the issue of hunger and of the organization's loss of Lehman as a donor.
Wallace said another large funder — a foundation — went under because of the Bernie Madoff scandal, so the organization used publicity of this loss to seek support from the community. When people heard that the needy might night get fed because of Madoff, it had a huge impact, she said.
The organization also decided on set times where staff would reconvene to analyze whether other steps or cutbacks needed to occur.
City Harvest amplified its message to match the increased need. The organization identified the opportunity in the collapse (to focus messaging on the fact that it meets a vital need). It went with messaging about investing in the local community and helping to feed your neighbor, and it harnessed the emotions people were feeling during the collapse. It also included messaging stressing how City Harvest also minimizes waste, which Wallace said really resonated.
Wallace noted four key areas where the organization reworked its creative:
- Acquisition — strengthened control copy; tested message/package.
- Donor development — increased urgency of language; timeliness and relevancy of message; cited examples of greater need; and cited examples of City Harvest as a solution.
- Donor retention strategy — monthly new donor mailings; new donor newsletter cover letter; 13th-month mailings.
- Increased online presence — Facebook, e-mails, landing pages.
The organization's November year-end appeal included in it a copy of an e-mail of thanks from a food bank in the city with which City Harvest provided food. A third-party endorsement like that is key, Wallace said, because then it's not just your organization telling prospects why they should give. It's proof positive.
She added that the organization never included "hand-wringing" messaging, but rather always positioned itself as taking action, helping and responding.
The organization started a Facebook presence, and two donors back to back agreed to give $5 (up to $20,000) for every new friend it got. Before the challenges it had 600 friends; now it has more than 12,000 and raised $40,000 from the effort.
Analytical and financial
City Harvest made the most of its approved expense budget. It temporarily suspended an investment program, reallocated expenses to programs with the best ROI and implemented low-risk testing.
Going forward, City Harvest plans to do closer tracking of online giving, continue to mail efficiently, keep message consistent with the ability to react quickly to news, and closely monitor results.
Wallace said one of the key things she learned from the collapse is not to be afraid to shift gears in procedure or messaging, and the organization plans to maintain flexibility in its schedule and strategy.
All in all, the organization ended the year 16 percent ahead of projections without cutting back on mailings.
Case study: Americans United for Separation of Church and State
The challenges for Americans United for Separation of Church and State were a bit different than those for City Harvest. According to Spitz-Nagrotsky, they included:
- a presidential election and new administration. The organization was thrilled about the new president, but it also knew that President Obama's life is very infused with religion and he perhaps wasn't so well versed in the organization's issues.
- Recession. Donors were affected by the economy and, during such a tough time, giving to this organization wasn't necessarily first on people's lists.
It wasn't business as usual. The organization reassessed and regrouped, and talked every day about what it needed to do. Its game plan included three key steps:
- Involve everyone in fundraising.
- Evaluate and re-evaluate communications and fundraising strategies.
- Articulate relevancy of mission across all channels and departments.
In terms of fundraising, for "Love Your Donors Day," program staff and development staff called the top two levels of major donors to thank them for their support and explain the work the organization was doing. There were donor-sponsored events, and while Spitz-Nagrotsky said they didn't garner as much money as she had hoped, they established a deeper commitment from the people who held the events. The organization also leaned on the board to participate in fundraising, and used its executive director on radio, Web and personal solicitations and public appearances.
The organization focused on:
- Maximizing its online presence
- Messaging around the Obama administration
- Focusing on core programmatic work
- Testing a targeted acquisition program
E-mails accompanied every mail appeal. It also created "AU Activists," which people could join to get action alerts; sent press releases via e-mail to members; and created a Facebook presence.
Analytical and financial
The organization's key goals were to:
- Cut costs without sacrificing revenue. It used a less expensive format than what was projected for a spring special appeal; cut a small amount from its acquisition budget (cutting worst-performing lists); eliminated one sustainer invitation, moving those eligible names into a future invite; and eliminated a reinstatement mailing and moved lapsed names to an acquisition drop.
- Focus on stabilization. It made retention a priority, doing extensive ask-string testing ("keeping a donor now is more important than upgrading them," Spitz-Nagrotsky said); increased the number of drops in acquisition so it could mail its core list more often; did reinstatement telemarketing, phoning lapsed donors and adding 500 additional active members; and focused on converting members to multiple channels to increase loyalty and retention.
- Know its coverage ratio. How many new donors does it need to acquire? How many donors does it need to reactivate? What is its retention rate? How many donors will lapse? The organization's coverage-ratio model helped it plan its budget for next year.
- Model its house file for mailing efficiently. AU created a predictive model for 0-to-48-month active and lapsed members. It categorized donors into tiers using indicators that would predict their performance and help it determine how many contacts they should receive from the organization. Spitz-Nagrotsky said now the organization will use the model to select members for special appeals, raising more money and spending less to do so.
Spitz-Nagrotsky said there are things that are going to get better, and it's the job of all fundraisers to figure out where those things are going to emerge. Americans United plans to:
- Continue the conversation. Articulating its mission and issues to donors and potential donors, and continuing to use its program and communications staff for message development.
- Analyze, analyze, analyze. The organization knows the importance of acting quickly on things that work, as well as those that don't. Flexibility and the ability to change course if the climate or issues warrant also are goals for AU.
- Use modeling and other tools for efficiencies.
Spitz-Nagrotsky said her mother used to make fundraising calls for her local Jewish federation, and what she did is what nonprofits need to be doing (and what Americans United is doing):
- Bond with the people you're fundraising from.
- Keep your costs low.
- Be very flexible. Do what you need to do to bring the money in.
- Work really hard.
- Hone your message, and keep it to the point.