The fundamentals of fundraising don’t change whether times are good or times are bad. But applying those fundamentals well takes some careful thinking.
There’s an interesting relationship between fundraising and art.
Pointillism is a form of art in which the painter uses small points of pure color placed closely together to form—when viewed at a slight distance—a complete picture. I first learned about pointillism on a 4th grade field trip to the Art Institute of Chicago. Our art teacher distributed copies of a small section of a pointillist painting and asked students what we were looking at. Of course, it looked like nothing more than colored dots to us… we saw no connection between them. Putting our papers aside and directing our attention to the massive work of art in front of us, the teacher revealed that what we had been looking at were sections of Georges Seurat’s, A Sunday on La Grande Jatte, one of the Art Institute’s most well-known pieces.
Seurat’s painting depicts a mix of social classes and animals enjoying park space along the river Sienne on a Sunday afternoon. The canvas stands at nearly 7 feet high and 10 feet wide. My classmates and I were blown away by the idea that such a complex painting—something we could never imagine ourselves creating—was composed of nothing more than tiny colored dots—something we could draw any day.
We all learned an important lesson that day about the relationship of parts to a whole. And that relationship is what our new series, Fundraising When Times Are Bad, is thinking about.
Each contribution to this series—foundations, direct mail, major donors, etc.—will help you better apply the tried-and-true principles of fundraising to today’s changing environment.
But before jumping into those discrete topics, let’s back up and look at the Big Picture. Seeing the whole context—the big picture before which we stand together—will help us better understand each fundraising dot that is a component of the greater whole.
Let’s cover five key points to provide context for what it means to be fundraising in a recession.
Americans are, and will continue to be, generous
Charitable giving is part of the American fabric, and it is unlikely that this will change anytime soon.
According to the Russell Sage Foundation and The Stanford Center on Poverty and Inequality, during the Great Recession, total charitable giving declined by 7.0% in 2008 and by an additional 6.2% in 2009. While these are real losses that forced many nonprofits to make painful decisions, when compared to the fact that the average American home value (upon which so much of our individual wealth rests) decreased by roughly 30%, it is a good reminder of the strength of our country’s philanthropic commitment.
Hard times don’t make parsimonious people—and least not in America, or at least not historically. Take heart that while our economy suffers, Americans won’t be battening down the hatches.
At American Philanthropic, we talk a lot about relationship-based fundraising. We believe that baked into the heart of each human person is a fundamental desire to belong, to be a part of something greater than oneself. Charity allows us to connect with causes that matter. As fundraisers, we strive to honor the commitments of our contributors and to invite them into our work as partners in accomplishing our mission. They are the ones who drive the good we do each day.
When times are bad, these relationships are all the more important. There’s a tendency for some nonprofits to want to pull back on relationships in difficult times. I get it: relationship-building takes time and money—precious resources always, but especially when resources are scarce.
Nevertheless, this is a mistake. While the way you navigate the relationship with your donors during an economic downturn will change, the fundamental fact of your relationship should remain. If we’ve developed strong relationships with our donors, we want to share the highs and lows with them. What are their concerns at this time? How is your nonprofit responding to today’s climate? As partners committed to a shared cause, what should we, together, be doing to continue making progress toward our mission?
Stay tuned for more advice on major gifts during a recession but bear in mind staying “near, dear, and clear” with your donors is as important as ever.
Cultivation is key
Even in good times, donor retention rates for the average nonprofit are only about 46%. By focusing more on cultivating your existing donors, you’ll be better poised to retain them through difficult times and make up for some of the losses that may come by smaller gift sizes or lower acquisition rates.
And when times are tough, it will be even harder to bring in new donors to replace the ones you lost. What does that mean? Tough times puts a premium on donor retention, which means a premium on donor cultivation.
Clarify the value of each gift
One year ago, most Americans probably did not know the price of a gallon of gas or a carton of eggs off the top of their heads. Today, they are far more conscious of these expenses. Americans are thinking about the value of each dollar they have. By clearly associating what each contributed dollar allows your organization to do, your donors will better understand how their giving contributes to some greater good.
It's still about the mission
The relevancy of your organization’s mission should not depend upon the state of the economy. Yet how you communicate the importance of your work will change depending upon the context. We may be entering a difficult time for nonprofits. Simply communicating that to your donors and expecting them to respond in sympathy with a gift is not sufficient. Sophisticated nonprofits will ensure their mission continues to be the driving force of their work and will communicate how their mission helps to steer us through these difficult times. This is the force that will continue to attract donors to your work.
Keeping the big picture in mind, I invite you to join with me and my colleagues at American Philanthropic in the weeks ahead as we look more closely at the many little points that make up the greater whole and help us navigate fundraising when times are bad. And I invite you to download our free e-book for just this occasion: Fundraising When Times Are Bad. You can head over here to download the book and get a comprehensive review of how to navigate fundraising in a bad economy.