Last Thursday, the Bank of Canada predicted a steep, short-term recession for the country ending sometime early next year; this despite economists at Canada’s major financial institutions predicting a more protracted, difficult decline. Maclean’s magazine published an article predicting that 250,000 Canadians could lose their jobs 2009. And Canada’s voluntary sector is waiting with baited breath to hear what, if any, kind of economic stimulus package it will receive when the new budget is announced this week. Times are indeed tough.
So how is a fundraiser to stay optimistic on the job with such negative press, and a collectively depressed North American community that seems positioned to tighten its purse strings? Some leading fundraising experts urge calm.
Relax, don’t do it
Speaking to CharityVillage from California last week, Mal Warwick, one of the continent’s most prominent experts and consultants on fundraising, and chairman of Mal Warwick Associates, said the first thing professionals need to do is, “Take a deep breath and relax.”
Warwick says since the global recession started, he’s observed many fundraisers and charitable organizations become more timid in asking for donations. According to him, such organizations now figure that a tentative and apologetic approach to donors demonstrates sympathy for their plight in this downturn and is a strategy best used to ensure they’re not scared off by a big “ask”.
“But refraining from asking…is a misconception. Asking for money provides donors with the opportunity to make a difference in the world, which is exactly what donors want to do,” he asserts.
In light of the new economy and monetary pressures on donors, Warwick has written a new book entitled, Fundraising When Money is Tight. Alhough it is scheduled for release in March, he offered CharityVillage a sneak peek at some of the advice and insights the book will offer fundraisers.
“There is accumulating a body of experience that [suggests] donors are more likely to be dissuaded from giving rather than induced to give more” by applying the “sympathetic” approach mentioned above.
As such, Warwick advises fundraisers and boards of directors to apply the following measures in consideration of why donors show support in the first place and what it is they truly want from your organization:
- Donors want to know that you’re doing the most effective job you possibly can with the money they give you.
- Donors want to know that their gifts are really reaching the people you’re helping, or affecting the issue you’re addressing. (They’re interested in impact, not in paying your salary or your electric bill.)
- Donors want to know that you value their contributions.
- Donors want you to report the results of the projects and programs they’ve supported with their gifts.
“All this is true, regardless of economic circumstances,” Warwick points out, adding that fundraisers should write to donors “about how you’re tightening your belt, increasing efficiency, and monitoring the productivity of your operations more closely. Do not talk about such problems as falling income from corporate and foundation grants and major gifts. Donors don’t really care about how you’re hurting. They care about how well you’re helping your clients or beneficiaries.”
Reach out and be remembered
In Vancouver, another fundraising expert, Harvey McKinnon, CFRE and president of Harvey McKinnon Associates – who also recently published his new book, The 11 Questions Every Donor Asks and the Answers All Donors Crave – says that professional fundraisers should stay attuned to known donors throughout the downturn.
“In tough times you want to stay close to your friends. Many donors cannot give at their previous level; some who still like your organization might not be able to give at all. It’s important to stay in touch with them to let them know that you still care about them as much as you care about their financial support,” he says. “When times get better they will remember your consideration. I would also consider keeping donors who fall out of a major gift club as members. Obviously, this depends on the level of giving in their history – but it’s worth examining.”
Another tidbit from McKinnon counsels fundraisers not to shirk the task of prospecting for new donors. He says that though it may be costly, it’s important “because otherwise your file and your income will shrink. In the commercial world, organizations that continue to advertise during a recession have always built market share after the recession is over. I believe the same thing will apply to charities.”
Having said that, McKinnon also notes he’s a big proponent of multiple income streams for nonprofits where possible. “There’s still a phenomenal amount of wealth in the hands of Canadians. Just like a personal investment portfolio, nonprofits should have a diversified source of income,” he advises.
Courting the skittish donor
Both McKinnon and Warwick agree that the potential for giving to take a hit this year is very real. However, both remain optimistic that fundraising can and should continue vigorously throughout the coming years.
When asked what advice he’s given to fundraisers in similar economic scenarios, Warwick laughs and jokingly scolds, “I may be old, but I don’t go back to the Great Depression!” The point he’s making is that this is new territory for most people in the sector. Still, he says that in conducting research for his new book, he discovered that other economic slumps had little effect on donors over the years. “The decline in giving was less than the decline in the economy” during previous recessions, he notes.
This could be an indicator that the same trend will show itself in the current economy. Regardless, Warwick says that philanthropy is still “a very high priority” for donors, and fundraisers need to keep this in mind at all times.
The following excerpt from Warwick’s forthcoming book is instructive: “A decision to put off asking for money comes from the same impulse that makes many nonprofit folks apologize for asking,” Warwick writes. “Never forget that a request for funds for your cause is an opportunity for your donors to validate their cherished values and beliefs. Ask! Your donors are grown-ups (presumably). If they can’t give at this time, you’ll find it out soon enough. Chances are, though, many of them will be more offended if you don’t ask than if you do. Your donors want to support you. Don’t get in the way.”
McKinnon concurs.
Most donors, he says, “still have money they can give. A recession also makes the need [for philanthropy] more obvious because there’s more media coverage of people suffering during the hard times. As importantly, giving is something that is hardwired in humans. It’s a good thing to do; we feel good and can make a difference about issues we care about. That’s why even during most recessions in the last 50 years giving remained high.”
Advice from the Association
The Association of Fundraising Professionals (AFP) has also weighed in on the economic situation and dispenses some timely advice on its international website.
Addressing both members and non-members alike, AFP President and CEO Paulette Maehara urges fundraisers to make use of her organization’s Survival Kit for Fundraising in a Bad Economy, which is posted on their site in the form of multiple, ready-to-read articles.
“Donors have a lot on their minds these days as they sit down with their personal budgets,” Maehara writes. “But despite the headlines about Wall Street and the financial markets, we as fundraisers should not lose sight of the fact that giving is a way for communities to pull together. While the economic forecasts are uncertain right now, what is quite certain is the capacity of people to lend a hand and support institutions of all kinds. We hope you’ll use AFP as a resource in garnering vital support for your organization in what may be a wild ride over the next few months.”
Good advice.
Andy Levy-Ajzenkopf is president of WordLaunch professional writing services in Toronto. He can be reached at andy@wordlaunch.com.
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