Are You Prepared to Fundraise in a Recession?
Fundraising professionals have an extremely hard job. They must generate greater amounts of dollars in good and tough times. They deal with internal and external forces. The attitudes and feelings of donors must be in a good place for success to occur. It is not easy to obtain a sizable gift from a prospect in a time of prosperity, must less in a time of perceived recession.
I asked a prospect for a multimillion-dollar gift around 2008. He said “yes,” and I was happy. Two weeks after he said yes, he changed his mind due to the impact of a quickly deepening recession. I had to lay low and wait months before he came around to fulfill his original pledge. Since the pledge was for a renovation/construction project, the gift was affected by inflation. Have you experienced this scenario in your career?
Recessions happen when economic output, consumer demand and employment are all negatively affected, according to Forbes. Modern recessions can last from one to two years. The Great Recession lasted 18 months between 2007 and 2009, and the most recent recession was the COVID-19 Recession, which lasted from February to April 2020. The pandemic caused a rise in inflation and supply chain disruptions. These issues plus geopolitical conflicts set the stage for another recession. Inflation is over 8%, gross national product was down in early 2022, and unemployment is beginning to increase. Experts continue to debate whether we are in a recession yet.
To raise funds during a recession, immediately develop a new strategic plan and remain initiative-taking, according to Give Central. Communicate more effectively with your donors, and preach and practice gratitude. Talk to donors at an emotional level. Be realistic with your donors and prospects. Improve your case for support by reaffirming your mission and impact. Involve your volunteers in your fundraising planning. Improve your social media and online fundraising efforts. Relate to your prospects on a realistic level. They are feeling the pinch and you need to love them more than ever.
Nonprofits should modify their fundraising program to achieve success. Focusing on corporate giving as individuals may not have the same level of cash to give. Keep a positive tone and highlight the good your organization is doing. Exercise fiscal responsibility by cutting overhead costs and make belt tightening a priority. Explore diverse funding options while seeking smaller gifts from multiple sources. Eliminate initiatives that are not generating a good return on investment. Monitor recession fundraising campaigns more closely than usual.
Network for Good cites 10 practices to employ as recession fundraising strategies:
- Practice gratitude and record a video showing impact.
- Stay connected with your prospects and donors using various communication means.
- Create challenging grant initiatives to stimulate major gift giving.
- Focus on recurring giving, such as monthly giving programs.
- Check the expiration dates of fundraising activities. Get rid of non-ROI programs.
- Identify Plans B, C and D such as developing partnerships with other companies.
- Collaborate to raise money with other entities.
- Be realistic and maintain your organizational vision.
- Avoid emergency solicitations asking for urgent gifts.
- Get social, stay calm and work smarter.
Always be prepared to raise funds in a recession. It will not be easy. It seems harder to generate dollars in today’s world. All of us will need to understand what we are facing and take steps now to achieve success despite greater head winds. Focus on maintaining closer relationships and developing programs that generate the greatest return on investment. Recessions come and go but fundraising programs need to be built for the long term.
No one said the fundraising profession would be easy. Always realize that others depend on us for your fundraising success.
Related story: Dynamic Fundraising Tips for the New Recession Era
Duke Haddad, Ed.D., CFRE, is currently associate director of development, director of capital campaigns and director of corporate development for The Salvation Army Indiana Division in Indianapolis. He also serves as president of Duke Haddad and Associates LLC and is a freelance instructor for Nonprofit Web Advisor.
He has been a contributing author to NonProfit PRO since 2008.
He received his doctorate degree from West Virginia University with an emphasis on education administration plus a dissertation on donor characteristics. He received a master’s degree from Marshall University with an emphasis on public administration plus a thesis on annual fund analysis. He secured a bachelor’s degree (cum laude) with an emphasis on marketing/management. He has done post graduate work at the University of Louisville.
Duke has received the Fundraising Executive of the Year Award, from the Association of Fundraising Professionals Indiana Chapter. He also was given the Outstanding West Virginian Award, Kentucky Colonel Award and Sagamore of the Wabash Award from the governors of West Virginia, Kentucky and Indiana, respectively, for his many career contributions in the field of philanthropy. He has maintained a Certified Fund Raising Executive (CFRE) designation for three decades.