Focus On: The Economy: Determining the Ask

The struggling economy has made it a challenging time for fundraisers. With disposable income harder to come by, there are fewer dollars to be had and the same number of nonprofit organizations — or even more — competing for them.

Tough economic times also mean there are more people who need the help that charitable organizations provide.

So how can fundraising professionals determine how much to ask from donors? What formulas should they use — or not use? What else should they consider when determining the “ask”?

Formula vs. case by case
To be sure, slow economic times generate more need.

“You have more families and more individuals who are at risk during these times,” says Donna Fletcher, principal of Mission Driven, a San Francisco-based fundraising consulting firm. “The challenge comes with being able to get the message to folks that money is needed now even more than it was in the past because times are hard and the number of people who have needs is greater.”

Americans are philanthropic by nature, even in the worst economic times. According to a study by the American Association of Fund Raising Counsel and the Indiana University Center on Philanthropy, philanthropy has been a major force in American life through good and bad economies and major public crises.

AAFRC reports that the average annual increase in giving is 7.6 percent, but it declines to 5 percent during a recession. Moreover, giving usually accelerates during the year following a major crisis, such as a war.

For these and other reasons, it can be difficult to determine how much to ask donors to contribute. There are many fundraising formulas from which to choose. For example, a local nonprofit might determine that for a capital campaign, donors generally can give three to five times what they give on an annual basis. If a donor gives $10,000 annually, the formula states, it’s appropriate to ask for $30,000 to $50,000 for a capital campaign.