Fundraising and the Government Shutdown

Well, we got through it. My Twitter feed has gone back to normal. My Facebook page is back to posts about kids, vacations and life in general. The television media has moved on to other stories.

But the question I keep hearing is, "Are we really 'through it?" As someone who works with nonprofits of all sizes, every day I see the struggle to improve performance of fundraising campaigns. The big question is whether the government shutdown and — perhaps more importantly — the "solution" (don't get me started on that topic) are going to affect us as we continue through the fall/holiday giving season.

Several marketers have reported that nonprofit campaigns that were quickly measured (i.e., phone, Internet) showed drops in response during the actual shutdown. Pollers and market researchers jumped on the opportunity to measure consumer buying during that period as well. The result? Yep, it affected buying behavior. As reported by CBS News, there were changes in all demographic groups. (For more insights into the affect of the shutdown on consumers, check out this piece from CNN.)

• 40 percent of consumers lowered their spending as a result of the shutdown.
• 70 percent of the overall number who were reducing spending indicated that they were cutting back "a little," while the remainder said that their spending reduction was "considerable."
• 32 percent of consumers making $100,000 or more were cutting back.
• 37 percent of consumers making $75,000 to $100,000 were cutting back.

That's right, folks — these are our donors.

But the shutdown is not the issue being debated in the hallways of organizations and agencies and online by marketers. Since the budget problem wasn't resolved fully and the debt ceiling wasn't resolved fully — it was all simply "delayed" by a few months — what does this do to consumer thinking and, ultimately, behavior? Many marketers are predicting that people feel as though this issue was put "on hold" versus actually being resolved. And, of course, the timing could not be worse for people to be feeling that another government shutdown is potentially just around the corner after the holidays. Yes, this could be a tough spot for our donors. But let's not get too upset. Here are my recommendations:

• Do not panic! Translation: Do not start adjusting your budget. Do not start adjusting your projections. Do not start alerting executives to problems that "may" come. You all know that I'm big on transparency — heck, I'm the one who suggested we all sit down with our finance teams and share everything we know. So I'm not suggesting that we keep our concerns quiet. I'm suggesting that we not allow ourselves to be overly concerned.
• Don't turn a blind eye! While I don't think anyone should panic or start preparing for a dire situation, I also don't think we need to be ignorant either. Pay close attention to those programs that allow you to see results quickly. Watch open rates, online giving levels, phone responses, pledge amounts, donation amounts. Watch them all, and discuss it within your team and with your agencies. There were some response changes reported during the actual shutdown, and that could almost be deemed reasonable. Make sure you are monitoring how donors are behaving now and over the next 60 days.
• Balance change! If you see a concern in your results (see bullet 2) don't make knee-jerk reactions. Yes, you should always be watching results and making tweaks to campaigns that can often show rapid results/response. But make sure you don't overreact and disrupt your strategy for the holiday season. First, talk to your vendors/agencies about the results, and ask them to check other client results with similar campaigns. Don't have an agency? No problem — call your industry friends. Go on the blogs and ask what others are seeing. There is one thing we know: When times are questionable or people in the industry are concerned, the sharing and "all for one, one for all" mentality are fantastic. Take advantage of all your resources to ask what people are seeing in their results.

Trust me, the retail industry is going to be monitoring this very closely. Make sure you stay aware of what commercial marketers are saying about buying behavior. But be very careful not to translate this to a problem for your fundraising campaigns over the next 90 days. Stay informed, be smart and watch your numbers closely before you make changes and raise any red flags.