Navigating Fundraising During a Recession

What you do now matters most

The belief that fundraising dollars will inevitably decrease during a recession is one of the most dangerous and pervasive myths in the nonprofit sector. Imagine if donors only opened their wallets based on the media headlines, stock market fluctuations, or or geopolitical tensions … our missions would constantly be at risk!

So, why do donors truly give? It’s simple: They want to make a difference and create meaningful change!

And guess what? Recessions can’t extinguish that passion! 

Now, I am not an economist, but here’s what I do know:

Economies run in cycles, and while I’m not forecasting an immediate downturn, history tells us that prolonged periods of growth often lead to a recession eventually.

So what are you as a nonprofit leader to do? Just sit on your hands and watch as your fundraising dollars decline? ABSOLUTELY NOT!

Preparation is your best ally! By proactively gearing up for potential challenges, you not only safeguard your organization during tough times but also strengthen it during prosperous ones. 

Here’s my bold assertion: If you start preparing now, you will: 

• Increase your fundraising potential and raise more money
• Defy the odds and thrive
• Successfully navigate any economic downturn and emerge stronger than ever!

So if you want to prepare for the uncertainties of a future recession, this article is for you!

Turning Adversity into Advantage

The first weekend of the COVID pandemic, I wrote this to my team: “When this crisis ends (whenever that may be), I hope that our team looks back and says that we achieved the following: 

1. We genuinely cared for each other and our donors during this crisis
2. We preserved our donor community and expanded it
3. We grew from enhancing our core fundraising skills and lead generation activities
4. We genuinely cared for each other and our donors during this crisis

My foremost desire was that our team would look back and recognize the genuine care we extended to one another and our donors during such a tumultuous time. 

Looking back, I’m proud to say we achieved that expectation – we exceeded it! We cultivated a culture of support and empathy, consistently checking in on each other’s well-being and offering the flexibility needed to navigate uncertainty.

We extended that same compassion to our donors, acknowledging the unique challenges they faced. By adapting our communications and fundraising strategies to meet their needs, we solidified the importance of human connection and reinforced our commitment to building relationships rooted in trust and mutual respect.

2. We preserved our donor community and expanded it

Not only did we maintain our donor community throughout the pandemic, we expanded it. By staying true to our mission and demonstrating adaptability in the face of unprecedented challenges, we inspired trust and confidence in our work. We prioritized clear and consistent communication, keeping our donors informed about our evolving strategies and the tangible impact of their continued support.

This transparency, coupled with our unwavering dedication to our mission, attracted new donors who were motivated by our resilience. We emerged from the crisis with a stronger, more diverse donor base, poised to make an even greater impact in the years to come.

3. We grew from enhancing our core fundraising skills and lead generation activities

We seized the opportunity to elevate our core fundraising skills and lead generation efforts. By investing in staff training, exploring new technologies, and refining our donor segmentation strategies, we optimized our fundraising efforts and expanded our reach. This focus on growth not only strengthened our financial foundation but also positioned us to better serve our community and fulfill our mission in the long term.

Remarkably, our team nearly doubled revenue during COVID. In contrast, teams that hesitated and waited for the storm to pass found themselves sinking.

Three key strategies to recession-proof your fundraising

As a nonprofit leader, it’s your responsibility to steer the ship instead of waiting for the storm to hit. You need to prepare your organization to not only weather economic downturns but to thrive despite them. By taking proactive measures now, you’ll create a robust fundraising strategy that can withstand any crisis.

Here are three essential strategies you can implement today to recession-proof your fundraising efforts, ensuring that your mission continues to shine, even in uncertain times

1. Get motivated 

• If you don’t care, why would anyone else? 
• Does your mission matter? 
• Does your work create meaningful change in the world? 

If your answer is yes, then it’s time to stop putting off until tomorrow what you can accomplish today!  

Your mission is not just a statement, it’s a call to action. If it matters to you and your team, then you must do everything in your power to protect and promote it. Preparing for a recession isn’t just an obligation; it’s an opportunity – a chance to fortify your organization and its mission. This shift in perspective transforms preparation into something you GET to do, rather than something you HAVE to do.

Getting motivated to prepare for a potential recession requires a fundamental change in mindset. It’s easy to fall into a cycle of fear and negativity, but that won’t serve you or your organization. Instead, embrace this moment as a catalyst for growth and resilience.

As a leader, your attitude is contagious. Demonstrate enthusiasm and commitment to preparation efforts. Share success stories and highlight how proactive measures can lead to positive outcomes. Your leadership can inspire others to adopt the same proactive mindset.

2. Develop a Plan

A. Cut the slack

In prosperous times, organizations often accumulate overhead that may not be essential. While some expenses are necessary, many are simply “nice-to-haves.” Focus on what drives revenue. Analyze all expenses and identify those with the highest return on investment (ROI). By trimming unnecessary costs, you can allocate resources more effectively to initiatives that will yield results.

B. Focus on high ROI activities

Don’t fall into the trap of reactive decision-making; instead, strategize for success. Develop a comprehensive plan that prioritizes high-impact activities with strong returns. Focus on initiatives that deepen donor relationships, enhance communication, and showcase the tangible outcomes of your work. This plan should include:

1. Building one-on-one relationships with top givers

Prioritize building genuine, one-on-one relationships with your top donors. Demonstrate  that you value their support beyond their financial contributions. Take the time to understand their passions, motivations, and philanthropic goals. This personalized approach deepens engagement and fosters loyalty. Read more here about building this skill.

2. Enhancing your mid-level giving program

Don’t overlook mid-level donors; they often represent a significant portion of your funding. Create tailored engagement strategies that resonate with this group, encouraging them to increase their giving and deepen their commitment to your mission.  Often branded communities provide great engagement opportunities for mid-level donors! 

3. Promoting monthly giving

Encourage recurring donations by actively promoting your monthly giving program. Emphasize the convenience and lasting impact of regular contributions. Even small monthly gifts can accumulate to make a significant difference over time. This model not only provides a reliable income stream but allows your organization to plan for the future with greater confidence.

1. Win back lapsed donors

Don’t forget about lapsed donors. It’s often easier to re-engage them than to acquire new ones, especially during a recession. Craft targeted campaigns to reconnect with those who have drifted away, reminding them of their impact and inviting them back into your community.  Read our full resource on lapsed donors here.  

C. Measure what matters

Focus on the key performance indicators (KPIs) that truly reflect your fundraising effectiveness. Avoid vanity metrics that don’t provide meaningful insights. By identifying and tracking the right metrics, you’ll have a clear understanding of your organization’s health and areas for improvement. In a recession, you don’t want to be scrambling to figure out what to measure-this should already be established.  Read our full resource on how to best measure your fundraising program.  In this article we break down the 3 C’s of a healthy fundraising culture, a culture that measures what matters most!  

 

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The 3 C’s of fundraising culture 

In one of our most popular articles we outlined the 3 C’s.  We list them again for you here:

There are 3 things that leaders can do to build cultures that will support fundraising growth. Growth shown by great fundraising metrics. They happen to all begin with C.  They form a 3-legged stool or sorts.  Each of these deserve their own articles. But a primer will do for now.

1. Clarity

Brene’ Brown reminds us that “Clear is kind. Unclear is unkind.” To create cultures that embrace growth leaders need to start by being clear. Clear about what is expected. This starts with job description clearly articulating the fundraising metrics you will track. This then filters down to yearly, quarterly and monthly goals. It permeates both 1:1 and team meetings on a regular basis.

Leaders who bring clarity bring kindness into their culture. Your fundraising team deserves clarity around what you require and how they are measured. If they don’t have this clarity chances are they are spending a lot of time trying to figure it out. Which means a lot of time NOT being spent on the job you hired them for!

2. Community

Having clarity around what is expected is a great start. But it’s only one leg of the stool.  The second is community.  A healthy community fuels growth.

If your community is healthy the team will be very willing to work with leadership. They will help determine the fundraising metrics that best ‘show off’ progress in their work. An unhealthy community will resist anything that could be perceived as ‘inspection’. In a healthy fundraising community each team, and each team member feel confident and secure with their metrics being shared. Being shared across the team and the organization writ large [a best practice]. They know that if they are ahead of their metrics that others will celebrate with them and learn from them.  They know if they are behind others will pitch in to help. An unhealthy community will resist public sharing of fundraising metrics at all costs!

3. Consistency

Consistency is the final leg of our stool. To bring health to a fundraising culture, particularly around fundraising metrics, there needs to be consistency. Consistency in when things are measured, how they are reported and what the impact, both positive and negative, will be.

Clarity shows what metrics will be measured and when. Community entails it will be shared publicly. Consistency is the promise that it will be done at the agreed upon time, in the agreed upon way, over and over and over again.

Consistency is the promise that what happens when your fundraising metrics fall behind happens the same way for everyone. For example, on a team I formerly led if you didn’t meet your metrics one month you had an explorative conversation with your boss as to why. If the numbers didn’t improve the next month you and your boss created a plan.  If they still didn’t improve after the third month you got a warning. For the fourth month it was a PIP. It did not matter if you were the longest serving, highest dollar raising team member. Of if you were an entry level teammate that was just hired. It was the same for everyone. It was clear. There was an understanding in the community. And it was consistent.

Consistency is also the promise that what happens when your fundraising metrics are excellent, they will be experienced and celebrated the same for everyone.

D. Communicate urgency

Clearly communicate the urgent needs your organization is addressing and how your donors’ contributions make a tangible difference. Highlight the time-sensitive nature of your work, emphasizing how timely donations can help you overcome challenges and achieve critical goals.

When seeking donations, it’s essential to convey why your mission matters now more than ever. You need to instill a sense of urgency that motivates donors to act. By effectively communicating the pressing issues at hand, you will inspire them to become part of the solution.

Focus on genuine urgency, not sensationalism

Present the facts with clarity and honesty, emphasizing the real-world consequences of inaction. Show your donors the tangible impact their support can have. For instance, illustrate how their contributions directly address immediate needs and create a brighter future for those you serve. Equally important is explaining the repercussions of inaction – what will happen if support is not forthcoming?

Paint a vivid picture of change

Help your donors visualize the positive outcomes that their generosity can achieve. Use storytelling to connect emotionally, allowing them to see themselves as vital players in the transformation process. By depicting the concrete benefits of their support, you reinforce the notion that their contributions are crucial in driving positive change.

By highlighting this urgency, you create a sense of responsibility that makes it less likely for donors to reduce their funding.In times of economic uncertainty, they are more inclined to view cutting support as a last resort because they understand the direct implications for your mission. 

This proactive approach transforms donors from passive supporters to active participants in your mission. When they feel invested in the outcomes, they recognize that their contributions are essential to achieving shared goals. This sense of ownership fosters deeper loyalty and strengthens their commitment to your organization, even during challenging times.

E. Refine your donor development strategies

Think of your donor development strategy as a journey, guiding individuals from initial awareness to long-term commitment. Each step should be carefully designed to nurture relationships and inspire deeper engagement.

“Donor development strategies are one of the most important tasks of any nonprofit leader.

But for many, it’s one of the most fear-provoking activities they can think of.

This is why many not-for-profits don’t grow.”

(For a deeper dive, check out our full resource on Donor Development Strategies.)

By implementing a well-structured donor development plan, you can transform casual supporters into committed advocates for your organization. This journey not only enriches your fundraising efforts but also creates a community of loyal donors who are genuinely invested in your mission’s success.

F. Bring in help

There is nothing wrong with bringing in help!  In fact, outside perspectives are very helpful in preparing for a recession.  But the type of help you need is not always easy to find.  It is always good to get a fundraising tune up.  Here is our guide: Choosing A Fundraising Consultant: When its time and how to pick.

3. Ruthlessly protect your team, and execute your plan 

Your team is the backbone of your organization, especially in challenging times. Preparing for a recession and leading through it is not a solo endeavor – it requires a cohesive, motivated team committed to your mission and to hard work.  If you need help thinking through how to lead your fundraising team we’ve got you covered.  Here is our full expose on how to lead a high performance fundraising team.  

A. Maintain regular check-ins

Regular check-ins with your team members are vital, particularly during uncertainty. These conversations don’t have to be formal; even casual discussions can significantly boost morale, address concerns, and provide essential encouragement. Building trust and camaraderie within your team during difficult seasons is crucial for maintaining motivation and resilience.

B. Clearly articulate goals

Ambiguity breeds confusion. Clarity is essential for effective teamwork. Ensure every member of your team understands their role in achieving your fundraising objectives. Clearly articulate your goals and break them down into measurable milestones. This not only provides direction but also allows for accurate tracking of progress and accountability. Avoid setting overly ambitious targets that lead to discouragement; instead, focus on smaller, more achievable steps. This approach fosters a sense of accomplishment and motivates your team to strive for continuous improvement.

C. Communicate with donors often

Communication with your donors is more crucial than ever during times of economic instability.. Consistent and transparent communication reassures donors that their investments are being used wisely and that your organization remains steadfast in its mission. Your transparency builds trust, and frequent communication reinforces the value of continued support.

Share stories of resilience and impact, demonstrating the positive difference your organization is making in the community. Regular updates – whether through email newsletters, social media, or personalized touch points – help maintain an open dialogue with donors, keeping them informed and engaged even during downturns.

D. Create space for reflection and realignment

Creating space for reflection and realignment is essential for navigating through a recession. Regularly assess your progress, analyze fundraising data, and solicit feedback from your team and donors. Are your strategies delivering results?  Identify areas for improvement and address challenges head-on. This intentional pause not only helps you stay aligned to your mission but also allows you to celebrate successes and acknowledge your team’s hard work..

By fostering a culture of continuous learning and agility, you ensure that your organization is well-equipped to respond to economic uncertainties. Protecting your team and executing a solid plan is not just a strategy; it’s a commitment to resilience and excellence, empowering your organization to thrive despite any challenges that lie ahead.

Don’t wait! Let’s transform your fundraising together

In today’s rapidly changing landscape, the ability to adapt and thrive is more critical than ever. By implementing these strategies, you will position your organization not just to survive potential economic downturns but to flourish in the face of adversity. 

Remember, your team is your greatest asset, and by protecting and empowering them, you can create a culture of resilience that drives your mission forward.

“I wish we had started sooner!” That’s a common refrain from our clients after experiencing the transformative power of our Strategic Fundraising Accelerator. 

Are you ready to accelerate your fundraising growth?  Are you ready to:

• Increase your fundraising potential and raise more money
• Defy the odds and thrive
• Successfully navigate any economic downturn and emerge stronger than ever!

Don’t wait!  Preparation is your best ally! By proactively gearing up for potential challenges, you not only safeguard your organization during tough times but also strengthen it during prosperous ones. 

Our Strategic Fundraising Accelerator can help you!  Clients who go through it often grow by 10% or more!

Schedule a Discovery Call