As a fundraiser during this “economic downpour”, I have $5 to invest…should I buy a “bucket” or an “umbrella” to weather the storm?

We are starting this new Fundraising Q & A during challenging times and I liked this thought provoking question. I recognize that the readership is vast and you’re from small to large organizations, in urban, rural and remote locations…not just limited to Canada. The goal of this column is to stimulate dialogue among your leadership team…the board and senior staff person in particular. It is through that interaction that you will learn the most and come up with tailor-made solutions to your unique challenges, based on tips provided here. Your board is an integral part of the organization’s fundraising success and this monthly column will help them build their understanding and comfort level.

There are no simple answers right now, but I’m drawing on 20+ years of experience in the nonprofit sector and will provide additional references for more information. Pioneers in the field (whose books I own and conference sessions I’ve attended!) have inspired my responses.

My advice is to buy a bucket with that $5.00. A good pail will outperform the umbrella for many years…we know what happens when a flimsy brolly succumbs to torrential rains and unpredictable winds. We are weathering a storm of uncertainty and the bucket will allow us to bail ourselves out, plus use it for alternative benefits, based on our creativity. With pail in hand we are part of the solution; the umbrella is only an attempt to avoid getting wet.

Anne Golden, president and CEO of the Conference Board of Canada said recently that the majority of us in our lifetimes have not seen the economy in such a state of turmoil, despite the stronger regulatory bodies in this country. Her message is being reinforced all around us, leaving many charitable organizations with deep concerns about achieving their fundraising goals and, ultimately, delivering on their mission.

Depending on the maturity of your development department, the more sophisticated organizations could experience the most extreme variance in their results. That’s because they have a very strategic and therefore, successful, major gift program. (For the benefit of newcomers, these donations are not defined by the number of zeros, but are gifts that are substantially larger than your organization’s average donation and usually the result of a courtship with that donor to make a meaningful impact). These fundraisers already know that the best source of significant support comes from individuals with influence and affluence (at least 80% of the money comes from 20% of the donors). The challenge now may be that their portfolios have taken a beating and pledge periods could require extensions, or the terms of their support will need to be renegotiated. In both cases, there is an impact on the bottom line and cash flow, and a sensitive yet candid conversation with the donor is in order.

Foundations and corporate giving programs are also being significantly affected by the downturn. We have a core of generous supporters from the corporate sector (Google “Imagine Canada Caring Companies”) who strive to maintain their commitment to give 1% of pre-tax domestic profits to charity and promote employee volunteering. However, given the economy, your efforts right now would be better spent holding your course (limiting or halting growth) until the storm subsides. Trim your sails (or any excesses in the organization) and work toward strengthening relationships with those closest to your nonprofit.

Fundraising relies on great relationships

Sadly, we only need to look at the divorce rate and world unrest to know that mere mortals aren’t the best communicators. Often when we do talk, we focus on the negative. It’s going to be even harder to celebrate achievements during tough times, but resilience will be one of the most positive outcomes. So take stock and capitalize on your successes.

Try to avoid doom and gloom. While life’s challenges cause distress, they also stimulate creativity. As creatures of habit, we don’t like change. Avoidance is normal when we have choices, but in some cases the options will have run out. Unfortunately, the most vulnerable, reactive organizations are going to suffer more than those that evaluate their progress and respond accordingly. Set goals and measure progress to build agility and accountability into your work; the benefits will pay dividends when communicated effectively.

If the organization has reached a state of crisis, the trouble with calling “mayday” is that donors don’t like investing in a sinking ship…hence the bucket! Financial desperation in a nonprofit organization may suggest mismanagement (or more appropriately, “mis-leadership” because it is the board and chief executive’s responsibility as a team to ensure the organization stays afloat).

It is imperative that these leaders use the organization’s mission as a lighthouse in the storm. Maintaining core services may be all that’s possible right now. It will be necessary to use that beacon to make the hard decisions on where cuts can be made to balance the boat. Be sure that everyone understands the organization’s priorities so that a consistent message is being sent.

There is a saying, “If you want advice, ask for support…if you want support, ask for advice.” Once the board and senior staff have determined their course, don’t be afraid to talk frankly with your supporters – that means two-way communication. Ideally, each and every one of us working in the charitable sector are volunteers and donors too. Treat your organization’s investors with the same respect you would want. During this difficult time, tell your donors what strategic actions are being taken to continue fiscal responsibility. You may even ask their advice!

Engage those who care most about your organization’s future to build solutions together. An effective stewardship strategy is intended to keep donors informed. Use your inventory of successes to tell them about the positive results your organization has achieved, thanks to their support. It is most important to report personally or through some affordable method between your requests. That’s just good manners, and it reminds me of my mother’s instruction when I was about six…if you want a Christmas present, don’t forget to thank Granny for your birthday present!

This is a time for patience, creativity (though not in your accounting) and strategic thinking. These responsibilities require a team effort, lead by the board and chief executive officer. To experience the benefits of camaraderie, empowerment, work distribution, engagement, and decision-making, try asking everyone in the organization to bring a bucket and set up a brigade!

For more information…

Strategies for overcoming the global financial crisis

Imagine Canada’s recommendations to the federal government (PDF)

KCI’s Philanthropic Trends (PDF)

Cynthia Armour is a freelance specialist in fundraising and governance. A Certified FundRaising Executive (CFRE) since 1995, she volunteers as a subject matter expert with CFRE International. She works with boards and senior staff to ensure that strong leadership will enhance organizational capacity to govern and fundraise effectively. Contact her directly at 705-799-0636 or visit www.elderstone.ca for more information about her services.

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