How to Sustain Nonprofits Through Declining Donor Support
As I write this, the world is faced with two significant wars. Of course, we have the ongoing war in Ukraine; recently, another war broke out in the Middle East. In the meantime, fundraisers are worried because the number of Americans giving to nonprofit causes has declined. Unfortunately, at the same time, the need in our communities continues to increase.
There's a serious issue facing donors in these complex times. Aside from the super-wealthy billionaire, where does a major or general gift donor give of their financial resources? We know that the global population, including Americans, is very generous. But the reality is that when high-profile and urgent international issues arise, it causes a donor dilemma. It's tough to see the images of suffering children and families.
The Donor Dilemma
It seems as if the world is somewhat overwhelmed. There's so much to do, and nonprofits are the leaders in supporting social causes. But, although donors can support multiple causes, there's another matter causing donors to divert their funding. As fundraisers know, a lot of money goes to donor-advised funds and impact investing funds.
Also, donor attitudes have shifted. People, including donors, aren’t averse to getting something in return for patronizing a company instead of a nonprofit. We all know about Toms, but others mix profit and social good well, including Two Blind Brothers and OneHope wines. So, how could traditional nonprofits compete with so much complexity and donor choice?
Staying the Course
First and foremost, it's essential to confront the donor dilemma. It's important to let your team and board members understand that times are getting tougher. The number of people giving to nonprofits is declining. Therefore, it's essential to know if it's happening to your organization by analyzing the number of donors who have given to your nonprofit for the last three to five years.
If you see a drop in donors, it's perhaps time to flip the script. In fundraising, fundraisers often look at lapsed donors and try a new appeal that acknowledges the lack of support but then invites them back. I would do things differently if I were still running a nonprofit. I would reach out to them personally and speak to them about why they've decided to stop supporting the cause.
Surveying donors and asking them if their interests have changed is an essential piece of information to stay the course. Donors have had a lot. For a couple of years, they supported efforts around the pandemic. Now, they've shifted to perhaps supporting humanitarian efforts in war-torn places. But, while it's vital to meet global crises' demands, it's also important to remind people about their local communities.
Navigating Difficult Waters
Again, donors have a lot of demands and urgent issues that keep surfacing, asking for the support of kind people wanting to help others. Moreover, if they're going to do good, they can support social good causes in many different ways that do not once have to go through nonprofit organizations. So, what ways are there to keep your nonprofit front and center?
1. Effective Storytelling
For one, it’s vital to do great storytelling. In other words, you have to become a master of it. The fact is still that people give based on emotion, and then they use their minds. So, becoming a master storyteller about your work and the issues related to your mission in your community is essential.
2. Acknowledging Nonprofits Aren’t Alone
When you discover (and the chances are that you will) that some donors have stopped giving to your organization because they support social good causes in other ways, it's important to acknowledge it. Then, you have to go back to storytelling and share the issues in your community and the importance of that work.
3. Diversify Funding Sources
Any good fundraiser knows that diversifying income sources is vital. Unfortunately, many nonprofits stay with what they know (e.g., grants and events). That's a mistake for complex times. It's essential to diversify income streams. Get creative with membership groups, strategic partnerships and cause-related marketing.
4. Collaborate and Network
I can’t say this enough: Build strong strategic alliances with companies and organizations that can amplify your work. Our team is continually advising our partners to work with local organizations. Think about joint fundraising and awareness efforts to encourage people to support local causes.
5. Advocate for Local Impact
Finally, it's essential to hone in on local impact and messaging. Donors have to get educated about why nonprofit work matters. From reducing poverty to improving health outcomes, it’s vital to share the state of things as they were in the past, currently are, and what the future could look like with everyone pulling together locally.
Again, the world is highly complex and continually grapples with life and death-issues. That's not going to go away anytime soon. However, aside from the global need for aid, local needs persist and require local communities' attention. So, consistently applying the approaches above will go a long way to get your local community on board with making where they live a better and more compassionate place.
The preceding blog was provided by an individual unaffiliated with NonProfit PRO. The views expressed within do not directly reflect the thoughts or opinions of NonProfit PRO.
Wayne Elsey is the founder and CEO of Elsey Enterprises. Among his various independent brands, he is also the founder and CEO of Funds2Orgs, a social enterprise that helps nonprofits, schools, churches, civic groups, individuals and others raise funds, while helping to support micro-enterprise (small business) opportunities in developing nations and the environment.
You can learn more about Wayne and obtain free resources, including his books on his blog, Not Your Father’s Charity.