Franklin Forum: Nonprofit Pros Share Advice on Weathering the Economic Downturn
The future of fundraising was the main topic at the plenary session at the Franklin Forum, sponsored by the Association of Fundraising Professionals Greater Philadelphia Chapter in Philadelphia in late April. While none of the speakers were quite sure exactly what the future of fundraising would look like, they all agreed that it would never be the same.
Therefore, it's vital that organizations get themselves ready for what might lay on the other side of the current economic crisis. Moderator and TV journalist Mary Caraccioli cautioned attendees that the challenges they're currently facing likely will be with them for a while.
"You can fight it or think about how you can strategize," she said.
Plenary speaker Kenneth Kirby, senior vice president of development at Main Line Health System, said organizations need to let donors know how they’re doing in light of the economy, and ask them how they're doing, too. The economy provides a unique opportunity for engagement with donors, he said, adding that organizations should gather major donors and have face-to-face conversations with them to ask for advice on strategies to net more major gifts.
Kirby said the economic downturn has led to a reluctance to ask for gifts by staff, board members and volunteers. It's what he called the "psychology of reluctance," which has created a fair amount of paralysis when it comes to fundraising lately. What's more, many in leadership have been less available, as most leaders are so busy trying to figure out how to get through these tough times.
The psyche of the donor also has changed, with donors now looking at giving as an investment strategy. Donors want very serious assurances that the organizations they give to are in line with fundraising best practices. Kirby said many organizations are, but they fail to communicate that to donors. It’s a message that is important to communicate now more than ever.
Organizations should stick with tried-and-true techniques that work and properly train staff in doing sensitive solicitations for gifts during this economic crisis.
Kirby told attendees to remember that donors give because they are motivated by mission, because of strong leadership, because of the credibility of the organization and because they are asked.
Panelist John Pearce II, VSB endowed chair in strategic management and entrepreneurship at Villanova University School of Business, shared the following insights related to nonprofits and their recovery from the economic crisis:
- The effects of the recession will last at least 12 to 18 months.
- In the years just before the recession, Americans were spending more than they made. Now they're saving 5 percent. While that's good, the effect is that less money is going to charity.
- There is a broadening acceptance of a "new consumerism," where Americans are re-evaluating spending priorities.
- Americans are volunteering 23 percent less.
- Venture philanthropy, giving circles, donor-assisted funds, etc., are ways nonprofits can improve performance, but they risk giving up some autonomy.
- Donors want assurance that they're investing wisely; they want evidence of tangible benefits of their gifts.
- A typical nonprofit solicitation is sent to a lot of inactive donors, which is a waste of money, as Pearce said lapsed donors are no more likely to give to an organization than someone who has never given.
- Whether it comes from a consultant or internally, competence in strategic planning is essential to getting through this tough economic time. "Anyone who can walk and chew gum claims to have experience in strategic planning," Pearce said, but this isn't so, and true competence in this area is vital.
The panelists also stressed the need for each organization to have a core competency, i.e., something it does better than everyone else. Figure out all of the things that you do that are related to that core competency and focus your energy on those.