Recessionary Fundraising – Some Practical Steps

This is part 3 of a series on the impact of the worldwide recession on fundraising. Written by Mal Warwick and Dan Doyle, you can find both analysis and suggestions from these seasoned professionals.

Nine practical steps you can take now

1) Don’t panic. You may even find opportunities opening up in these difficult times. Other fundraisers (and, more often, their bosses) are panicking. They’re eliminating donor acquisition, canceling fundraising projects right and left, and cutting mailing quantities. If you make decisions carefully and stick to business, you’ll do better both in the short run and in the long.

2) Strengthen your case for giving. Your donors don’t want to hear how the economic crisis is affecting your organization. What they want to know is how economic troubles are impacting your beneficiaries. If you can accurately argue that their needs are greater than ever, recast your case to emphasize how much more urgently your donors’ gifts are now needed. Above all, don’t apologize for asking. Never forget that a request for funds for your cause is an opportunity for your donors to validate their cherished values and beliefs.

3) Cut costs the smart way. Don’t necessarily reduce direct mail donor acquisition quantities; focus on lists that yield donors with higher long-term value, emphasize list exchanges, and reduce or eliminate package and copy testing. Mail lapsed donors. Gang print your materials—perhaps even with other, non-competing nonprofits. Reduce your postage expenses by co-mingling and learning more about postal discounts. In telemarketing, focus on calling phone-responsive names, and raise the minimum Highest Previous Contribution level of the names you’ll call. Use email notifications to boost response both by mail and by  phone. Convert online donors to monthly sustainers.

4) Segment your donor file using the most sophisticated tools within your reach. Mail your donors more selectively, dropping long-lapsed donors from current appeals and focusing more on those at the top of your organization’s giving pyramid. If you’re now sending generic appeals to all your donors, carve out, say, the top 10 percent or top 200 individuals and invest in truly personalized appeals to them, embedding multiple data points from your database in each individual letter. Refer to such matters as the number of years a donor has been contributing to your organization, whether she has pledged to leave a legacy gift, whether she is a volunteer, an event-attendee, a monthly donor, a retiree—in short, any significant matter that helps set one donor apart from others.

5) Stick with what has worked in the past. Do less testing. Despite what you may be hearing from experts, this is not the time for innovation. Creativity can be costly.

6) Stick close to your donors—especially your most generous and responsive donors. If you’re not using the telephone to stay in touch, now’s the time to begin judiciously. The interactivity of telephone contact offers an ideal opportunity to craft your case for giving in terms that respond directly to the values and priorities of individual donors. This is also the time to step up cultivation, not cut back. Don’t even think about economizing by eliminating or cheapening your donor acknowledgments.

7) Learn more about your donors. Survey them at low cost with donated services from a university or business school faculty member in marketing or social science; a donor or member survey for your organization might make an ideal class project, the result of which will be statistically valid data about the attitudes, beliefs, and preferences of your donors as a whole. Use a “confidential donor survey” to acquire information specific to individual donors—and apply what you learn in carefully crafted, personalized appeals. For example, if you’re working for a cancer research charity and you know that a donor’s connection to your cause was the death of a loved one, you can write far more powerful copy. If you’re promoting after-school programs for young children and a donor is either a parent or an elementary-school teacher, that connection can allow you to address her in a far more personal way. And if you know that a donor regards your organization as one of his top three charities, you can assume there is a strong likelihood that he’ll give serious thought to an upgrade request.

8) Step up your online fundraising and communications efforts. If you’re contacting your supporters once a month by email, increase the frequency to twice monthly, or weekly. Optimize online giving opportunities on your Web site by making the process as easy as possible for donors, including a prominent “Donate” button on every page, and building a specific landing page for each electronic appeal to reinforce the specific case for giving. Make sure you are utilizing the capability of your online fundraising tools to track donor interests and behaviors, and be sure to use that information to personalize email offers.

9) Break down the silos, and integrate your fundraising efforts. Combine direct mail, online, and telephone fundraising efforts in carefully sequenced campaigns that will allow each effort to reinforce the others. Be sure that your direct marketing or membership staff works closely with major gifts and legacy giving staff members to avoid letting any donors fall through the cracks. Set overall fundraising goals, not department by department objectives, and if possible develop incentives for everyone engaged in fundraising, marketing, and communications to attain those goals.

Taking these steps as your response to the current financial crisis will guarantee nothing. However, as best we can tell, these actions, taken together, constitute the likeliest path to surviving the short term and flourishing in the long run. Based on our current knowledge and our exploration of the three scenarios we’ve laid out above, the selective approach is the best way to ensure that your organization will maintain its footing and emerge from the current crisis in a strong position. But keep your eyes open all the while: benchmark actively and widely, and be nimble in revising tactics to take advantage of the changing environment.

Above all, remember that if your cause is meaningful and necessary, you will be able find people who will offer their support, no matter the economic situation.

In case you missed the previous posts, here are the links:

1. Fundraising in Tough Times

2. Three Possible Fundraising Strategies