Washington Philanthropy Update

IT'S THE ECONOMY!

It seems like only yesterday ... or at least only a few years ago ... that the economy endured one of the most severe recessions in history, undercutting fundraising and optimism, while increasing the demands for services from many nonprofit organizations.

Now the economy threatens again. Fear about European debt, a volatile stock market, and continuing unemployment are causing concern as we approach the most critical few months in most fundraising programs. To say the least, these are challenging times for nonprofit organizations and institutions depending on gifts to meet their annual budget needs or to achieve their long-term goals for stability and growth.

There is no way to get through an economic or market downturn except with endurance and patience. But it may help to keep in mind some practices that have proven themselves in past times like this:

Focus on retaining current donors. Step up stewardship and communication. This may be a tougher time to acquire new donors, but don't lose those who already have a commitment to your organization.

Do more and be creative. More and better events? More use of the Internet? Increased involvement of volunteers? Challenge gifts? Additional mailings? It is essential to keep an eye on the cost-benefit equation, but in general, more activity generates more revenue.

Sharpen your case. If people are finding it harder to give, they need stronger reasons. This is not a time for generic appeals to goodwill. Explain what you do, why it's important, how you measure results, and why gifts are essential to continuing your work.

Think creatively about how to package your needs. Some of your programs may be of interest to foundations or corporations with focused giving interests, if properly defined and communicated. For some nonprofits, corporate marketing budgets may be as promising a source of support as the corporate foundation or giving budget. When sales decline, companies may be looking for new opportunities to increase visibility and impact with targeted constituencies.

Maintain relationships with previous donors. It may be tempting to focus all efforts on donors who can give this year. But there are some who have been supportive in the past and may not be able to provide significant support now. Don't lose touch. The economy will turn and they will be back financially. And they will remember how you treated them while they were gone.

Go where the money is. This may be a tough period for people in some industries, but others may be prospering. Some parts of the country are faring better than others. Keep abreast of trends and how they may impact your donors and prospects in different ways.

Help donors think creatively about their assets. For example, older people who have lived in their homes for many years are likely to have significant equity in the house, even if its value has declined somewhat. Or they may have insurance policies that are no longer needed. With careful planning, such assets can be used to make major gifts. If you are already in a campaign, think creatively about how donors can fulfill their commitments and be sensitive in working with donors who may face unexpected financial pressures.

Emphasize planned giving. Despite current worries, individuals may be comfortable including your organization in their estate planning through a bequest. When the stock market is uncertain, the guarantee of income from charitable gift annuities may be attractive. If you do not offer them now, consider starting a program, perhaps in partnership with a local community foundation.

Do not reduce fundraising budgets or staff. There is a relationship between how much you spend and how much you raise. To believe otherwise is just wishful thinking. Cutting back in the midst of a downturn can only have a negative impact on giving, both now and over the long haul.

Use the time well. Maybe a campaign will be deferred -- or extended -- for another year. But, like on a rainy day at the beach, use the time to do things that you always said you would get around to doing if only time allowed. Strengthen prospect research, improve development office systems, refine planned giving materials, improve stewardship, undertake staff professional development, and cultivate deeper relationships with key donors and volunteers.