Surviving the Economic Tsunami

Intuitively, most of my colleagues confirm that 2009 and 2010 have been the two most difficult years our organizations have ever faced. 

I believe we are in the economic equivalent of a tsunami. One gigantic wave took the country’s financial stability straight out to sea during the fall of 2008.

Although the recession is technically over and it’s unlikely that the country will experience a double-dip recession, these questions remain: When will the recovery begin to have meaningful traction? And, when will donor confidence and philanthropy, which have been lagged variables in all past economic recoveries, begin to grow again?

These are difficult questions to answer. But, it’s becoming increasingly clear that it may be many years before a rebound. One indicator is some economists’ predictions that employment will not reach pre-recession levels for 10 years. Flat seems to be the new normal.

Nonprofit organizations must continue to track trends, anticipate change, and position themselves to take advantage of opportunities. Instead of idly waiting for philanthropy to improve, organizations should take time to re-examine and reinvigorate development plans, processes, and activities.

Build a Broad Donor Base

Although funding from governments and foundations still is unstable, personal giving shouldn’t decline significantly from the current level. That’s promising because personal giving accounts for approximately 75 percent of all philanthropy in this country. An additional 8 percent of total donations are personal bequests.

Don’t fall into the trap of targeting a narrow base of major donors. Large gifts typically are based on an individual’s long-term assets, which significantly depreciated during the economic downturn. Conversely, modest gifts come from discretionary income, which has remained steadier in recent months.  Additionally, modest gifts can be solicited multiple times a year.

The lesson is a simple one: Focus on individual donors, and cast a wide net.

Put the Development Plan into Action. Revisit the organization’s specific, actionable development plan and revise it as necessary.

Plan out as far as two or three years, but no more. Then—and this is the most important part—set the plan into action by establishing short-term deadlines on a work calendar. Detail specific activities to accomplish, making sure to note how many staff members, board directors, and volunteers are needed to accomplish each task.

The Alliance for Children and Families can be a valuable partner in creating and revising development plans through its Severson Center. Members can use the DocuShare database to access examples of development plans from other human service organizations. These examples can serve as a starting point for creating a new development plan, or organizations can borrow from the examples in DocuShare to modify their existing plan.

Don’t Burn Bridges. Manage donor relationships with great care; fund development is driven by relationships.

Many organizations need to focus on developing new relationships. However, it should not be done at the expense of former and current supporters. Even though many donors aren’t able to provide financial support at the level they have in the past, it is important to remember that their circumstances are likely to change in the coming years.

People will remember which organizations were gracious, community-minded, and cooperative during difficult times. Take the time to plant seeds for the future. This is a time when stewardship is imperative.

Encourage Storytelling. Engage board directors and volunteers who will talk about their experiences with the organization. Find out what it is that they value about the organization, what got them involved, and what they are proudest of. Use that information to focus the case that’s presented to prospective donors.

Moreover, the exercise of gathering this information from board directors and volunteers is an opportunity to provide stakeholders with training in fundraising. Make sure they understand that nothing is more powerful to individual donors than personal testimony.

Lastly, and most importantly, by engaging their board directors and volunteers in this exercise, organizations energize their most loyal donors—their board directors and volunteers—by reinforcing how important the work of the agency is to individuals and the community.

Articulate Board Expectations. Organizations can’t raise significant money alone. The board has to own development as a major responsibility, and the development plan should clearly define this role.

If the organization doesn’t already require it, consider instituting a policy that all board directors must give. This policy needs to be discussed by the board and then articulated in a binding resolution.

Other examples of board involvement are as simple as asking each director to identify at least five people in the community who might be interested in the organization’s work. Ask that the board director facilitate an introduction between those five individuals and the organization, or ask that they bring those individuals to the next friendraising event.

Use the Alliance’s Fund Development Curriculum with the Board. For most nonprofit human service organizations, transitioning the board from a passive to active fund development role requires a huge cultural shift. Members can use a training curriculum developed by the Alliance’s Resource Development Services program to help achieve this change.

The curriculum is designed specifically for human service organization executives and development staff, or a facilitator, to use with the board. It covers solicitation strategies, how to secure major gifts, grant writing, and several other critical topics.

Network. Members of the Alliance have access to an extensive network of peers. Reach out to whine, vent, share ideas, ask for suggestions, refocus, or seek roadside consultation. It truly helps to be able to brainstorm solutions and strategies with caring colleagues who are, more than likely, struggling with the same dynamics and demons.

Positioning for Recovery

Alliance member agencies have a rich history of adapting to change while growing and connecting with their communities. That is not to say that change is easy. It rarely is. But, I believe that agencies can take the necessary, yet difficult, steps to ensure future health and growth, as well as protect their mission-based commitments to children, families, and communities.

Bob Jones is chair of the Alliance’s Resource Development Services Advisory Committee. He is president and CEO of Alliance member Children’s Aid and Family Services, Paramus, N.J., and a former member of the Alliance Board of Directors.

View the archive of Fund Development columns or the archive for all columnists.

Article PDF: 

Alliance_Magazine_Issue4-10_Fund.pdf