September 2, 2014


Stewarding donors in tough economic times

David Lamb

David Lamb

[Publisher's note: This article was provided by Blackbaud, a maker of fundraising software. Blackbaud is a PJ business partner.]

Throughout the hardest economic times in recent history, like the OPEC oil embargo of the early 1970s and the terrorist attacks of 2001, philanthropy remained robust.

The average annual increase in overall giving over the past 40 years is 2.8 percent.

To be sure, giving tends to dip during recessions.

But even in recessions, giving remains above the periods that preceded them by three or four years. The trend has been steadily upward, and there's every reason to believe that trend will continue.

The following strategies will help to see you through the recession:

First, keep communicating with your best prospects.

It's true that some major donors are somewhat less prosperous today than they were two years ago. However, if you stop asking them to give, they may come to believe that you don't need their support.

Be tactful, be restrained, but keep asking. And let them know you're using their dollars wisely.

They're pinching their pennies. They'll appreciate it if you do the same.

Second, focus on your mission.

Your mission is more relevant now than ever before. Remind donors of the consequences of not meeting your mission. Who will suffer, go without, or be worse off now than they were before?

Third, know your constituency.

Efficient fundraising means asking those who are most likely to give, and not asking those who are unlikely to give.

Analyze your database to learn the characteristics of your best donors, and focus your fundraising activities on people who have the same statistical profile.

If you don't have the in-house expertise to do that, Target Analytics is one of the companies ready to help.

Fourth, prospect wisely.

For the most part, your major gift prospects in the future are your best prospects from the past. However, in the present, you should seek major gifts from those in recession-proof businesses.

Look for industries that are prospering even in recession, such as healthcare, alterna­tive energy, grocery, and Software as a Service (SaaS).

Fifth, market planned gifts, especially annuities.

During recessions, interest rates tend to drop. However, the payout on annuities is based on actuary tables rather than market rates, so older prospects may see these as good investments.

Sixth, stewardship is more than just a "stage.

Recruiting a new donor is much more expensive than retaining an existing one.
When the economy improves, donors are more likely to resume giving to organizations that have stewarded their gifts - of any size - well.

Finally, remember why donors give.

The best time to raise money is not when the economy is cooking at full boil - it's when you need it.

The reasons people make charitable contributions don't change during a recession: They believe in the mission, they trust the leadership, and they are personally involved.

David Lamb is senior consultant at Target Analytics, a Blackbaud Company.


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