As we look ahead to the second half of 2020, the world is a more uncertain place than most people alive today can remember. The course of the global pandemic is unclear. As is the ultimate impact of the protests against systemic racism now sweeping the nation. As are the outcomes of upcoming national elections. As is the outlook for the economy. At this moment, the United States has technically entered a recession, but we have no idea what will be its depth and duration.
For all of us in fundraising, the sheer number of important unanswerable questions we now face presents a real challenge. The reason is that uncertainty—even more than bad news—troubles donors, creates anxiety, and makes for a difficult environment for philanthropy.
In this article, we hope to share some solid advice for nonprofits and their fundraisers on how best to meet the challenge of the uncertain times we face. This advice reflects our experiences with past crises, especially major recessions, because in some ways lessons from those events apply today. But we will also share our thinking on some of the ways that the present situation may be truly unprecedented and the implications of that.
Learning from History
Let’s start with lessons that seasoned fundraisers learned from the crash of 2008-09, the aftermath of 9-11, and the bursting of the tech bubble in the early 1990’s.
The first of these is that however panic-inducing present headlines may be, the long-term outlook remains reassuring. A graph of any major stock index that spans these recession events shows dips and crashes, but also rebounds. More to the point, it shows striking gains over the course of decades that make the crashes look like blips in retrospect. Yes, the market has lost significant value in the last few months, but as of this writing, the Dow stands at about 25,000. When president Obama took office in 2009, amid a financial collapse traumatizing businesses, the public sector, and households nationwide, it was just under 8,000. This is a good fact to keep in mind when a dose of perspective feels helpful.
Even more important, given that we are all in the business of fundraising, total philanthropic giving has traced the same path as the markets. In each major recession it dipped, yet going into the current pandemic, it stood at well over $400 billion annually, an all-time high and up 33% from 2008.
In the coming months, many organizations may see diminished annual giving. It’s unlikely that such a steep rise in unemployment and such a steep drop in consumer confidence would not affect this form of philanthropy, essentially fueled by take-home pay. In many cases, however, major donors—those, remember, who are funding their gifts through highly appreciated assets—will still be in a position to make significant commitments. Yes, some may feel less rich and less willing to step forward. Others, though, will be more eager than ever to help, to respond to the needs that the organizations they believe in are facing and the needs they are addressing.
It’s also useful to remember that older donors are more likely to view current events through the long lens of experience and to stay confident. We saw this in the 1990’s. Newly minted millionaires in their 50’s thought the world had ended with the popping of the tech bubble. Donors who were 70 at the time had seen it before, knew better, and kept giving.
So where does this leave us in terms of actionable advice?
First, be out there, communicating with donors and making asks. We saw clearly in 2008-09, that organizations who followed this advice rebounded faster than those that went into hibernation. It is important to keep asking for support. Do so thoughtfully and sensitively, but do so. You will likely need to revise your expectations about the dollars you’ll bring in, especially through annual giving, but your steady efforts will help maintain front-of-mind awareness for your organization.
And when you are not asking, engage in stewardship with greater intensity than ever. Stay connected to your donors and prospects and use this time to deepen their understanding of your organization and their alignment with your mission. That work now will mean you will be poised for growth when the tide turns.
Second, be adaptable. Are your gift processing people sitting on their hands? Re-task them with writing notes to donors. Start at the top of the file and work down. When a $100 donor who’s never gotten a hand-written note in her life receives one, she’ll remember. Use downtime to clean your database. And get creative with your communications and virtual events. That effort will pay off as well.
Third, get busy planning. We hope that this advice seems obvious, that your Board and senior leadership are already focused on mapping your path to recovery. What may be less apparent is how essential this work is to your fundraising. The news that you’ve pivoted to operating virtually is already old. Now, donors want to know that you are planning and they want to know what you are planning. By laying out a smart, solid course of action for the months ahead, you can gain their confidence—and you can ask them to help fund the steps you need to take.
So Many Futures
Now let’s explore some of the ways the current crisis feels different from those we’ve weathered before. First, the financial hit that so many organizations have sustained was remarkably sudden and it was multilateral. Past recessions have threatened gift income. This one started by instantly slicing deep into almost every form of earned income too—from ticket sales to summer camps and gift shops. Colleges and schools, with spring tuition in pocket, seemed momentarily spared, but they have lost significant ancillary income and now face a frightening fall.
The second unique aspect of this crisis is that as we all try to plan for the next three, six, and twelve months, the dimensions of uncertainty we have to navigate eclipse anything since World War II. Will campuses open in the fall? Will elective surgeries resume? Will the virus resurge? Will job losses abate? What will happen in the November elections?
A recent white paper from Deloitte, “Economic Cases for Resilient Leaders,” paints three possible pictures for the near future: a “mild” economic case (real U.S. GPD ‘growth’ of -5% in 2020), a “harsh” case (growth of -8%), and a “severe” case (growth of -10%). All are discouraging, but the “mild” case more or less resembles a traditional recession, whereas the “severe” case, looks more like a trauma that will go down in the history books. The societal impacts of these numbers on the people our organizations serve and the people they rely upon will clearly be enormous.
In this environment, the answer is not to make a plan, but to make plans—to anticipate multiple scenarios going forward. This is something our strategic planning team at Schultz & Williams has now built into their approach. It’s a process that entails its own methodology, and it has to be an ongoing effort. As events develop, you need to keep revisiting your scenarios and updating your planned actions.
All this means that our earlier advice about sharing “your plan” with donors, is not as simple as it might have sounded. But we stand by it. We believe this unprecedented time calls for unprecedented transparency, particularly with your most important and loyal supporters. Organizations need to keep these individuals in the loop, and to make that happen, they need to give their development people a seat at the table as the big decisions are made. This is how they can be equipped to speak persuasively and with authority to the audiences essential to your organization’s future.
Our Time To Shine
Our last piece of advice is actually a word of encouragement. We all know the coming months are going to stress and threaten nonprofits in extraordinary ways. It is our job as fundraisers to help lead the response. This is not the time for business as usual. It is a time when our efforts as development professionals can make all the difference.
In some situations we’ll face, the answer will be to fall back on knowledge acquired over the years that’s always served us well. At other times, we’ll need to go off-script in creative ways. In either case, we are entering a period when the unsung and unseen teams in development are going to be more important to their organizations than ever before, and in some cases, more important than anyone else.
