Weathering the Storm
This past month, our new administration has created economic uncertainty for everyone, especially those in the nonprofit sector.
Understandably, everyone is freaking the fu*k out.
Organizations are slashing budgets and waiting to see what happens. Federal funding is frozen one day and released the next. Grants are up in the air, leaving nonprofits at a loss as they try to stabilize programs that support their respective missions.
And while no one can predict with certainty where this is headed or how long it might continue, one thing is for sure: it’s time to fasten our seatbelts and buckle up — it’s going to be a rough four years.
One bright spot — where we know money will keep flowing — is through individual giving. However, it’s not automatic. We can’t assume that those who support our cause will step up to fill the gaps simply because the need exists. We must take specific steps, now more than ever.
Here are four suggestions for making that happen…
#1. Prioritize Transparent and Consistent Communication
When economic pressures increase the importance of individual giving, donors become more interested in understanding the impact of their contributions. People are motivated to give when they feel emotionally connected to a mission.
So, share real-life, impactful stories frequently — stories that show how donor generosity contributes to change.
Nonprofit leaders must also have honest conversations about financial challenges and organization needs — in a clear, realistic, and solution-oriented way.
For example, instead of simply saying, “We are facing financial difficulties,” you can say, “With economic shifts impacting our funding sources, we are focused on maximizing efficiency while continuing to serve 5000 families in need. Your support ensures we can sustain this critical program during uncertain times.”
Don’t be afraid to tailor messages based on donor levels. Major donors may want more in-depth reports, while others may appreciate shorter updates through newsletters or social media.
#2. Strengthen Donor Relationships Beyond the Ask
Earlier this week, I was on a call with an organization’s biggest donor. She expressed frustration that the organization was taking her annual gift for granted: “They only call when they need money.” Even worse, after making her annual gift, she didn’t receive a thank you note, phone call, or email.
Direct fundraising appeals are not enough. You must connect donors to your work by engaging them in mission-driven events, such as behind-the-scenes tours, CEO gatherings, expert panels, etc.
You can also establish a donor loyalty program for recurring donors — those who provide essential stability to the organization through their ongoing contributions. This may include regular updates, exclusive impact reports, and appreciation events. Demonstrate to donors how their gifts are making a difference.
Lastly, always thank donors, whether through a text, handwritten note, or phone call. I know everyone is short-staffed. But few things upset donors more than not being thanked.
#3. Diversify and Innovate Fundraising Strategies
Economic uncertainty can impact traditional fundraising streams (government grants, for example). So, if you don’t already have a recurring donation program, now is the time. This encourages small, monthly contributions rather than one-time gifts.
Other ideas:
Create matching gift challenges. Leverage gifts from smaller donors by encouraging major donors to match.
Leverage peer-to-peer fundraising. For example, “In lieu of a wedding gift, please give to our favorite nonprofit.”
Explore new revenue streams: educational workshops, art sales, swag. A food security nonprofit could offer cooking classes using the same ingredients used to provide food to food-insecure families, with the proceeds returning to the mission.
The point is that business as usual will not be enough. Find new, creative ways to raise additional funds.
#4 Focus on Donor Retention, Not Just Acquisition
Acquiring new donors is expensive and time-consuming. Our easiest donor will always be the one who has already given to us. They are more cost-effective and provide a more sustainable revenue stream.
Make every effort to maintain connections with those who have shown support for your mission. Keep high-value donors engaged through personalized messaging. Recognize donors in social media, annual reports, and newsletters. Share your strategies for navigating today’s economic turbulence, ensuring donors feel confident in your mission-driven work and the allocation of their contributions.
Act Now
Economic uncertainty doesn’t have to mean instability for nonprofits. Building trust, diversifying funding strategies, and focusing on long-term relationships will allow them to weather financial challenges and continue making a lasting impact.
So, pick up the phone and inform donors about what is happening and how your organization may be impacted. You don’t need to ask for money, but keep them updated on the situation and what actions you are taking in response.
A resilient future is built on a foundation of strong individual donor relationships. Don’t wait.