Crisis? What Crisis?
Phone call after phone call, text after text, I am compelled to write a blog post in response to the impact of the COVID19 virus on the world of philanthropy. As a professional fundraising consultant, I’m drawn to thinking about philanthropy at large in order to deduce solutions to the situation.
National Philanthropic Homeostasis: The ratio of philanthropic dollars as a percentage of gross domestic product (GDP) has not moved since it was first recorded in 1971; come feast or famine, donations account for 2% of GDP in the USA. It’s stubborn, says the Chronicle of Philanthropy, check out the charts, facts and figures here. The good news: we are consistent with our giving, at large, and seem to be *relatively* untethered to any financial climb or crisis.
Today’s Anxiety: Like the Economic Great Recession that began in 2008, nonprofits are in panic mode as a moratorium has been mandated on meetings in major metropolises. Two reasons:
- The spring is a major fundraising event season where many nonprofits count on charitable contributions to meet their budget; and
- Regardless of events, donors are spooked about their liquidity due to their losses in the stock market.
Quick Tangent: Nonprofit organizations play a vital role in building healthy communities by providing critical services that contribute to economic stability and mobility. They are recognized as such by the government because they are doing the work the government would otherwise do, but is not able/willing to; therefore, they receive tax exemptions, employee protection, and 501(c)3 status. Nonprofit organizations work for the public good rather than financial gain like a private business. There are no fat-cats benefiting in the form of profits or dividends from the sidelines for this work. In other words: anyone who is benefitting financially is gainfully employed through the nonprofit rather than sitting as a shareholder.
That doesn’t mean they should be operating with the scarcity model that many donors (and third party “overhead” evaluators) perpetuate!!! What happens with funding suddenly slows? The nonprofit beneficiaries are at major risk. This is neither sustainable nor prudent. IMHO, nonprofits should have high enough overhead to recruit and retain talent and tech, as any other business would. They should develop funds for iterative innovation and discovery. And they should accumulate reserves for times of financial downturn. Watch this iconic Ted Talk by Dan Pallotta: The way we think about charity is dead wrong.
My Curiosity: I wonder if now is the time to turn philanthropy on its head. Insert feel good adage about how hard times bring positive growth… Perhaps we can find some alternative ways of fundraising as a response to the changing times.
The Problem with Charity Events: One friend called today and told me her clients are concerned because events have been canceled and that is a place where many fundraisers connect with their donors to provide “moves management” like stewardship and cultivation – not to mention ask for money. Another organization said their program is showcased at their gala and now donors won’t see it or feel inspired to give. What I hear in these stories, among many others, is that nonprofits are counting on events to do the two most important elements of their fundraising job: fortify relationships and demonstrate impact. My training is largely centered on Major / Transformational Giving and Capital Campaigns and with thanks to nearly a decade of accounts across the country with the powerhouse of CCS Fundraising. Although I love events, they serve the purpose of building community, delighting the donor, and acquiring new potential supporters. They should not be the primary source of donor engagement or impact demonstration.
The Solution: The challenge is to get less dependent on big, one-time, annual events. That means building long term relationships with philanthropists but also with foundations and corporations who support your organization with reserve funding, endowments, and discretionary funds. The focus of fundraising should be on integrating major gifts, multi-year, funding partnership strategies. Until then, below are actions you can take right away to stay afloat.
Actionable Recommendations for Today:
- Get on the phone: Everyone is home… so let’s talk to them! Travel excuses don’t fly! (Pun intended.) Call your donors and either talk on the phone or ask for a video conference call if they are a major donor you hope to steward/cultivate/solicit. If you don’t have time, rally your volunteers to help you. Say these types of things:
- Thank you for your support of ____ (program) at ____ (organization)! (Use specific and meaningful language.)
- In this time of uncertainty, I want to tell you what we are doing to keep our beneficiaries protected and our program intact. (Share 1-3 relevant and real strategies in your plan.)
- Is there anything we can do at our organization to help you at this time? (This should be genuine. Be prepared.)
- Please keep an eye out for further communication from us in the coming days as we all double down to ______ (insert your organization’s mission. This way, you are letting the donor know that you may come back with an ask at another time, but for now, this is solid stewardship.)
- Thank you and goodbye!
- Find a HERO (or many HEROES!): Identify philanthropic leaders and celebrate the heck out of them! If you have an event that was postponed, ask your sponsors and donors to maintain their support rather than refunding their donation. Any sponsor who stays in should be celebrated publicly as a Hero for helping you keep the programmatic funds in the hands of your beneficiaries rather than being withdrawn. This will create peer pressure for other sponsors to stay in the game as well. And it’s a great way for your sponsors to be recognized for doing the right thing in this time of change. A bonus tip, secure funding to cover the rest of the event costs from a company benefitting from this health crisis like Chlorox, Kleenex, Purrell, etc.
- Don’t cancel your fundraiser, but move it online: If your event was cancelled/postponed and you’re counting on your event-based live auction for your budget, move it online. You may reach more donors and raise more money, even though you’re not getting the benefit of natural peer to peer impulse competition in a room. A few platforms to consider include Neon (integrated with ClickBid), OneCause and Snowball, and others listed by DonorSearch.
- Inspire your donors: Remind your donors of the critical work you do. Enliven your donors with success stories and ways they can help. Insert levity and humor! Please try to steer clear of tugging on heartstrings with egregious pleas and pity. Instead, highlight what you do uniquely well and show donors why their investment in you in the past was valuable and why it will continue to do good work in the future, especially right now.
- Capitalize on the winners: Consider inviting new donors into the mix in this opportune moment. Brands who are benefitting now due to behavioral shifts might not only have unexpected cash flow, but they may want to pitch in marketing dollars to do the right thing, publicly. Do you (or your board members) know anyone managing a budget at one of those companies? If so, ask them to sponsor your organization! This is a win/win as they are primed for maximum target customer engagement. You can help. They are certainly going to be benefitting from this time of WFH. Figure out how you can celebrate their support in a big way. This just might inspire others.
Other ideas? Send them my way! Email me at firstname.lastname@example.org