Fundraising in the Current Economic Climate – Is Your Glass Half Empty or Half Full?

Fund-raising half full imageAs I travel around the country—and as individuals from around the country come to campus—it has become increasingly clear that, as far as fundraising and development is concerned, we live in interesting times.

About a year ago, the Dow Jones Industrial Average reached bottom. Fifteen months ago, Bernard Madoff was arrested. Eighteen months ago, Lehman Brothers, the global financial services firm, collapsed. By all indications, current realities reflect the worst economy since the Great Depression. According to a report from the Conference Board, a private research group, U.S. consumer confidence plunged 10.5 points in February 2010, raising concerns about the outlook for consumer spending. Consumer confidence is now the lowest since April 2009 and is far below the expectations of economists.

With low consumer confidence and a current unemployment rate of 10.6 percent, it is not surprising that there is both a loss of faith in and anger toward individuals and institutions responsible for creating solutions to the current economic situation. Several examples include:

  • The American people’s initial enthusiasm and euphoria upon the election of President Obama has dissipated.
  • Leaders and managers of philanthropic enterprises are now being questioned in a fashion that has never previously been the case. Some foundations and nonprofits have been severely crippled, if not wiped out altogether.
  • Despite pressing needs, charitable giving has decreased in current dollar terms for the first time since 1987, as the chart below demonstrates.
    Total Giving ChartI spend much of time counseling nonprofits throughout North America, the UK and Israel. And, during this past year, as part of the Fisher-Bernstein Institute for Jewish Philanthropy and Leadership, I, along with Amy Sales and Reuven Kimelman, have worked with representatives from ten agencies as part of an inaugural program on fundraising education and organizational change entitled Development at the Core.
    I have learned much from my clients and from participants in Development at the Core.  Most importantly, I have rediscovered the importance of optimism in the face of challenge in today’s fundraising environment, notwithstanding the voices of the doomsayers. From my vantage point, if there is even a drop of water in the bottom of the glass, I see it as overflowing. Here are some ways to use the current economic situation to your advantage:Talk to donors Pick up the phone and call. Set an appointment to visit. A gift solicitation does not have to be the purpose of every call. Use the time to thank donors for past contributions, and bring them up to speed about what is currently happening at your agency. Talk with them about a new initiative or project, or ask them for their feedback on an issue of current importance to your organization. In other words, engage them further in your organization’s programs and projects. And don’t forget that modest donors appreciate your call just as much as your largest donors. Conversations are crucial for building and strengthening relationships with mid- and lower-level contributors. Your efforts may well generate continuing financial support in months and years ahead. Your mid-level donors may even become major donors.

    Strategize new alliances Current economic realities make it an ideal time to focus on critical programmatic, financial or administrative opportunities that will help to support fundraising. Consider forming a strategic alliance, collaboration or partnership with another organization that could be beneficial to both. Raise the possibility in your conversations with donors. Once again, you will be engaging them with your organization and strengthening important relationships.

    Prepare contingency plans Clients of mine that have financial contingency plans already in place, or that developed such plans when they first saw signs of trouble, are in more stable financial situations than organizations without plans. Contingency plans offer a road map to follow. The ride may not always be smooth, but having a plan can help to avoid even more serious problems.

    Reinvent your case for support When asking for money, what is your strongest story? Making a strong case for support is not just for a capital campaign. You don’t need to be in campaign mode to rewrite your case statement. What has worked for you in the past may not be the story you need to be telling today. Think strategically about what your needs are and how your donors might respond. There is no better time than now to be sure your case is out in the community telling people who and what you are all about.

    Plan for capital campaigns now, not later No, I am not crazed with stress. I am a realist wanting to fill my glass. If you have a campaign in your future, the future is now. It takes six to nine months to complete a plan and a feasibility study to put your agency in position to move into a full-blown campaign. Nine months from now the fundraising environment will be stronger and you will regret not having done campaign planning, because those who did will be far ahead of you.
    So, to summarize what I have learned in the past year…I encourage you to join the “glass full to the top” club. Meet with your donors and brainstorm about new and different ways of serving your community. Surround yourself with people who have positive energy and who have creative ideas. Look around and see what others are doing, and borrow ideas from successful people. Collaborate with successful organizations. Be an optimist!

Fundraising and Development