Fundraising Success In A Time of Financial Crisis-It Is Possible!

While the media continues to focus on the bad news on Wall Street, organizers and advocates around the country are dealing with the real economic fallout of job losses, foreclosures, and growing economic anxieties in communities. The work of community organizations and service agencies is especially critical right now, and will continue to be essential to ensuring that the efforts to turn around this economic crisis actually help families, particularly those in low-income communities.

So it shouldn’t come as a surprise that, in the middle of this financial calamity, many organizations are worrying about their budgets and how much money is coming in, just like the families they’re organizing. The most important thing for organizations to keep in mind is don’t panic. Raising money for the important work of community organizing has always been challenging and groups have gotten more and more creative and sophisticated in meeting that challenge. So take a deep breath and plunge in-with eyes wide open. 

Foundations exist for charitable purposes – 5% of a foundation’s endowment must get paid out every year. So no one should worry that a foundation’s giving will completely dry up just because of this financial crisis. Furthermore many foundations determine their giving based on multi-year cycles, a strategy sometimes referred to as “smoothing.” For instance, a foundation’s financial losses this year are likely to be averaged with the gains of the last two years to determine a foundation’s giving in the next year. I know that sounds complicated, but the point is that foundations will still have money to give in the next year, no matter how bad things are this year. And many foundations are keenly aware of the needs of their grantees and feel an obligation to “step up.”

Individual donors have fewer structures built in to ensure their continued generosity, but often act out of a sense of loyalty to groups to which they give generously.  In fact, some donors are increasing their giving right now because they recognize that the work of organizations they support is even more critical during a severe economic downturn. If you look at the New York Times Style section, the fundraising parties they report on are still raising a lot of money, even though charity events have taken on a more modest tone and scaled back their expectations. All of this isn’t to say that there aren’t some donors who will give the same this year as last year, or others that are tightening their giving, but the fact is we don’t yet know what donors will do, so our job – your job – is to move ahead with fall fundraising campaigns and get busy now.

Even though the philanthropic sector will certainly have to adjust its giving in the coming years due to the financial crisis, there’s a lot that organizations can do to weather the storm. Based on my conversations with other donors, funders, and advisers in the philanthropic sector, here are my top points for organizations to consider about fundraising in a time of deep financial insecurity like now:

1.      Reach out to your donors and program officers immediately.

Ø      Donors and foundations are all over the place in terms of how they’re dealing with the financial crisis. So just ask them. Find out from the program officers you work with how the crisis may impact the foundation’s giving; what sort of funding cycle the foundation is on; whether giving is likely to tighten up next year or in five years. You’re not trying to get firm commitments or nail down donation amounts for the next budget or grant cycle. Realize that your program officer might not know yet herself, so keep in touch regularly but not annoyingly!

Ø      Reach out to your major donors; acknowledge that we’re in the middle of a financial crisis and gently ask how they’ve been impacted and if they have to reconsider any of their charitable contributions.  Build bridges and make the connections between what they think is important to their work or giving goals and what your organization is doing. Conduct this conversation in a way that leaves you room to make the case for keeping your organization as one of the ones they continue to support even if they are considering reducing their giving.

Ø      Remember that these conversations are meant to be informal and about gaining knowledge and keeping relationships strong. This is about forecasting the funding environment for the coming years. Even if the news is discouraging, don’t hear a “no” where there isn’t one.

2.      Clearly communicate the work you’re doing – make it timely.

Ø      Everything that organizations already know about conveying what they do to funders becomes even more important right now. At times when your donors may be struggling, your constituents are certainly worse off and the moral imperative for all of us (grantee and grantor) to work together becomes even more critical. And don’t just wait for scheduled grant report dates; send your foundation contacts updates on the great work you’re doing. Emphasize your record of making a real impact in your community and be specific about how your work – and where relevant how your group – is addressing the new challenges created by this crisis. Also, be prepared to demonstrate to both foundations and individual donors how you are managing your budget during this time.

Ø      Now is the time to be even more strategic and consistent in your communications. Update your website, and look for new opportunities to communicate with the public about your work and make sure your donors see your recognition. Thank your past donors for their support with personal letters and direct phone calls that reinforce the importance of what you do and how their support enables you to keep at it. Reach out to new donors and foundations so that you have more prospects in the pipeline.

3.      It’s all about building relationships.

Ø      Keeping reliable financial supporters close to you matters now more then ever. Instead of just making the same asks; consider more creative ways for your closest, loyal donors to support your organization. Matching campaigns are a great way to involve your most loyal donors and bring in new ones. Organize a group of your loyal donors to commit to match new donations that are brought in, either individually or as a funding circle. This helps your past donors build relationships with each other and shows new donors how much farther their donations will go. Find ways to involve them meaningfully beyond financial contributions. Ask them to serve on committees or campaigns to raise money or meet with you to think through how to stay financially healthy.

Ø      If a reliable donor tells you that they’re going to have to reduce their giving, be sympathetic about the real challenges that donor may be facing. This demonstrates respect, which will encourage donors to come back when they are on more sound financial footing. You want to keep the relationship with them over the long haul so be prepared to give donors options for how to give besides an annual contribution. They could give a smaller amount now and another donation in the spring. Or if financial support is not possible at all right now, consider other ways they can be helpful – like introductions to other potential sources of funding, co-authoring appeal letters, etc.

Remember that your job is to ask for contributions not just in good times, but even more so in challenging and scary times. Keep your funders and donors close to you. Remain positive about your organization and its future. Talk up your work and the crucial impact you are making. We are all in this together and we will survive it together. Reflect this positive outlook in all of your communications. Great possibilities are on the horizon beyond this tumultuous time. 

Go forth and fundraise!

Margie Fine is director of the Linchpin Campaign at the Center for Community Change