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How Nonprofits Can Survive, and Even Thrive, During Tough Economic Times

Senior Vice President, Data Analytics

With the recent Brexit vote, a recession seems practically imminent for our friends in the UK.  While it may take years before Great Britain officially leaves the EU (if they actually do at all), we have already seen world markets react to the news.  What will the effects be on the world economy?  And as fundraisers, how will this impact our annual fundraising appeals and larger project campaign needs?

As is common during tough economic times, pressure increases even more in the nonprofit sector, as we feel the squeeze for increased funding needs and the ever-increasing donations needed to deliver on these needs.  Whether fundraising in the UK, US, or elsewhere, we offer the following reflection on how challenging economic times influences the nonprofit sector, and what we, as fundraisers, should be doing about it.

Studies have found that the 2008 financial crisis impacted nonprofit organizations in many different ways.  One such study, Dr. Joseph C. Morreale’s 2011 paper “The Impact of the ‘Great Recession’ on the Financial Resources of Nonprofit Organizations,” does an excellent job examining the topic from a data-driven perspective.  The knee-jerk assumption that ALL organizations saw decreases in giving simply is not true.  While many organizations did experience decreases in funding, many others were able to maintain flat revenues, or even increase funding during the 2008 recession.

All organizations that made it through the 2008 recession relied on two things: Relationships and Confidence.  Success in fundraising varied based on how many relationships an organization had and the level of confidence the organization demonstrated in itself to potential and continued donors.

Confidence is key.  Those organizations that “let” the recession be the reason for decreased funds saw decreased funds.  In the 2008 recession, those organizations that persevered and conducted business the right way continued to have fundraising success (if they had a decrease in funding, they certainly rebounded quicker).  Now is not the time to be afraid to ask for money.  As professional fundraisers, we need to continue to make “the ask” at the right time, for the right amount, by engaging the right individuals (staff and volunteers).  The funding needs are still here, and maybe are even more urgent.  We must persevere with confidence.

Don’t confuse confidence with “business as usual.”  The changing economic landscape does not allow for business as usual.  We need to change with the times, but not let the economic times be an excuse for decreased fundraising.  Now is the time to reach out to some new prospects and begin to build a relationship.  Major gifts usually don’t happen overnight, but the relationship needs to start sometime.  Don’t wait until it’s too late.

More so now than ever, organizations that have strong relationships with their top donors are better positioned to weather an economic storm.  Wealthy individuals are still the focus of our fundraising resources.  As a sector, we may see overall giving drop in the short term, but the long-term picture still presents a trajectory of increasing giving.  Remember, the wealthy are still wealthy, even during a recession.  It is a matter of how passionate they are about your cause and the relationships they have with people at your organization.  Now is the time to increase the volume of outreach and relationship-building activities with current and prospective donors so the “pipeline” is and remains full.  During the recession, it very well may take more donors to achieve similar or increasing success.

There is no better time than today to confidently begin building new relationships with prospective donors.  These relationships may not help with immediate funding, but a strong pipeline is the best way to overcome challenging times.