The Only Reason Your Nonprofit Should Be Worried About the Economy
Recently, my colleague Richard Perry explained that if fundraisers bring compelling offers that match donors’ passions and interests, those donors will give. Inflation and a troubled economy should not affect giving. However, during economic recessions, nonprofits without strong mid-level, major, and planned giving programs suffer the most.
Why? Because these organizations rely on their direct response (the dreaded annual fund) program and/or events way too heavily as their main revenue source. Unfortunately, during an economic downturn or recession, like we experienced in 2008 and 2009, it’s generally the donors who give at a direct response level that suffer the most financial impact.
I already know those who run direct response agencies are extremely nervous about the economy right now. Because the first thing that a recession affects is direct response fundraising performance. And when giving declines from donors who typically give $10, $25, and $50 gifts, nonprofit leaders pull back their spending. Some even stop investing in new donor acquisition.
Now, hopefully, economists will be wrong about the impending recession. But regardless, now is the time, if you haven’t already, to get your development house in order. Start investing in mid-level, major and planned giving right away. The only reason you ought to worry about a potential recession? Not having strong, relationship-based fundraising programs.
For all those nonprofits that have thriving mid-level, major, and planned giving programs; that have structured, disciplined, well-managed teams; that understand their donor’s passions and interests and bring donors inspiring offers to fund — great, you will be fine.
If you’re not confident about the strength of your programs, invest in the upper half of your donor pipeline. Today.
In a time of economic uncertainty, both large and smaller nonprofits that have been heavily focused on direct-response and event-based fundraising strategies are figuring out how they can grow mid-level, major and planned giving programs. It’s astonishing how the number of donors giving $1,000-plus cumulatively over a year just plummets in these files.
The good news is that it’s not too late to invest in these programs. Nonprofits with thriving mid-level, major and planned giving programs are going to weather the storm. And, whether that storm comes soon or in 10 years, there are always challenges you have to move through. Will you be ready and able to continue delivering on your much-needed mission when the time comes?
Jeff Schreifels is the principal owner of Veritus Group — an agency that partners with nonprofits to create, build and manage mid-level fundraising, major gifts and planned giving programs. In his 32-plus year career, Jeff has worked with hundreds of nonprofits, helping to raise more than $400 million in revenue.