Recession and Charities and Opinion and Fundraising and Viewpoint and Philanthropy

Not-for-profits can grow in tough times

December 1, 2008
Everyone can agree: The economy is bad, with no relief in sight. From slow retail sales to stock market declines, it's a scary time — not only for individuals, but also for not-for-profit organizations.

All around the country, not-for-profits are asking the same questions: Will donors give less? Will some donors suspend giving altogether?

Certainly, those are reasonable questions. But the more pressing question not-for-profits should be asking is, "How will we respond to this economy?" Because the way an organization responds will have a much greater impact on its stability than the mind-set of its donors.

First and foremost, not-for-profits must defend against crisis-related paralysis by avoiding the following pitfalls:

Blame: Assigning blame for any problem that arises-financial or otherwise-on the economy, rather than focusing on root causes.

Status quo: Seeking to "ride out" the problems, choosing not to launch anything new or exciting until things gets better.

Rash decisions: Making emotional judgments regarding fund raising, programs and cost-cutting.

Lost direction: Halting strategy execution or changing plans without solid rationale.

Donor abandonment: Stopping the practices of stewarding, cultivating and soliciting donors, assuming they should be left alone in difficult times. This can be the worst mistake.

Less communication: Communicating less with constituents, donors and the public out of fear of "bothering" them.

To combat these reactions, leaders must be proactive with fund-raising strategies and management techniques. A few simple actions can help your organization withstand the economic uncertainty and, perhaps, even allow you to grow.

Perform a financial review: Assess what is truly important. Assemble your best fiscal experts from your volunteer base, not solely to cut expenses, but to test your fundamental business model.

Be proactive: Address constituents' fears directly and openly. Say, "Here is how we plan to address this crisis." Don't wait to be affected; look ahead and anticipate what you can do to be stronger and more efficient. Some donors might even make a gift to help you strengthen the organization.

Refine your message: More than ever, you must make sure the community, donors and prospective donors understand your role and value.

Cultivate: Bring potential supporters into your organization's circle. Focus on the one resource they can afford to give: time. Provide opportunities for constituents to see the work you do and meet the people involved so you can build relationships that yield long-term support.

Communicate: Tell people about your changes or adjustments and they'll be much more likely to get involved or make a gift.

Keep fund raising: Visit your donors. Then, visit them again. In fact, you might want to see them more often during times like these. Experience tells us people might give less, or they might defer a decision, but they will give.

Find answers: If you see decreases in program participation or fees for services, don't automatically shrug it off as a product of the economy. Analyze the problem and see what is happening and how long it's been happening.

Define a work plan: Make sure the organization has a strategy for the next six to 12 months. If it doesn't, develop one that helps the organization stay on track to meet objectives defined by the board.

An old saying counsels that you decide what your attitude is going to be in life. You can choose to be happy or sad, productive or nonproductive. The same applies to organizations. Your demeanor or attitude about these tough times will be observed by many and adopted.

So, why not make the best of these times? Look beyond simple survival. Choose to stay strong and grow stronger. You might be amazed by the outcome.

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  Feldmann is CEO of Achieve, an Indianapolis consulting firm for not-for-profits.
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