Five Reasons Not to Panic

2. Bad times can bring good donors.
Investment advisers often encourage clients to keep investing during economic downturns by reminding them of the benefits of “dollar cost averaging.” In other words, if you regularly invest a consistent amount, your dollar is going to buy more shares when prices are down. Then when prices go up again, you have more shares, as well as shares that are more valuable.

Perhaps nonprofits can benefit from a similar “donor cost averaging.” After all, it’s only logical to assume that the donors you acquire in lean economic times are more likely to be: a) wealthier and more “recession proof,” and b) more emotionally wedded to your mission than impulse givers who make casual gifts to many organizations during good times. Either way, those donors who give in an uncertain economy seem considerably more likely to be long-term supporters with higher lifetime value.

Of course, like every theory, it needs to be tested for your particular organization. But if those high-loyalty donors are out there just waiting to be asked, can you really afford to ignore them?

3. Giving is cool again.
The financial markets are a powerful influence on people’s giving behavior, but as author Kurt Vonnegut reminds us, peer pressure still is the most powerful force in the world.

And right now giving is hot. According to the December 2007 issue of Outside magazine, an influential travel and recreation monthly that targets affluent readers, “generosity hasn’t been so cool since the days of Carnegie and Rockefeller. This frenzied altruism,” the magazine says, “may be driven by a collective urge to right our nation’s karma or a competition to one-up Bono and Brangelina.” But the reasons for this new giving trend are less important than it being spotted and promoted by all kinds of mainstream media outlets.