Competing successfully for charitable dollars in the recession will require nonprofits to step up their focus on the cultivation and stewardship of donors, a leading fundraising professional says.
"This is the time to invest an even greater amount of time, energy and resources in continuing to cultivate relationships with donors and prospective donors," says Robbe Healey, senior member of Farr Healey Consulting in West Chester, Pa., and chair of the Association of Fundraising Professionals in Arlington, Va.
That focus on donors should be part of a larger effort that integrates philanthropy into an organization's business plan, connecting giving to the specific programs it supports and to their outcomes, Healey says.
"Organizations that are the most effectively positioned to manage philanthropy as a revenue stream in a struggling economy," she says, "have linked each revenue stream to the programs they will fund."
Unlike revenue from government contracts that must be spent on the programs for which it is designated, for example, unrestricted philanthropic revenue gives a nonprofit's board and staff the opportunity to be flexible in spending that money, she says.
"And as you link funding to programs, and your donors know what they can do to support you, you have a key link between your donors' giving and your program outcome," she says.
Boards that take the time to examine their nonprofit's individual programs, and think about what those programs will do and how the organization will pay for them "are in the best position to have a case for support clearly defined and well understood," Healey says.
Just as it helps board members make the case for support, she says, connecting giving with the programs charitable dollars support helps donors understand the need for support.
Donors also want to know the difference their giving will make, Healey says.
"Donors don't make gifts to organizations because they have needs," she says. "Donors make gifts to organizations because the organizations have the programs the donor wants to fund, and through those programs, more importantly, that have successful outcomes."
So by showing the impact of those programs, she says, "you are proving to the donor you are making the change in the world the donor wants to pay for."
That is particularly important in the current recession, she says.
"In any economy, we have to be able to tell donors what we're doing with their money," she says. "But in a challenging environment, we have to tell donors consistently, compassionately, creatively and continuously, and keep them very well informed."
If nonprofits do not do a good job telling donors "how we've used their philanthropic gifts to fulfill their missions, they will give to someone who is telling them that regularly and completely," she says.
Nonprofits also must be realistic about the impact of the economy on their fundraising, and open with donors about it.
"The organizations that have stayed close to their donors and close to their prospects, and have given them dignified attention, even if they can't give or can't give as generously, those are the organizations that will have a distinct competitive advantage when the economy strengthens again," Healey says.
While nonprofits of course should continue to ask for contributions, she says, cultivation and stewardship will be key in working with donors who cannot give or give at previous levels.
Cultivation and stewardship, she says, help donors "know they're valued, and when the economy turns around again, that they were valued even when they couldn't be as helpful as they might have liked to have been."
Nonprofits should keep donors informed about their mission and make sure "they know what you're doing with their gifts, and how successful you're being and the outcomes," fundamental tactics that are part of "brand awareness," Healey says.
"The whole idea is that you are positioning yourself in a competitive environment, making sure donors know who you are and what you do," she says. "So it's cultivation and stewardship of donors and safeguarding and interpreting your brand for the public."
And while fundraisers tend to be optimistic, she says, they also must be realistic about the impact of the recession, an approach that requires "open communication, regular conversation with donors, being just direct and honest when you have conversations with people, not ignoring that we know it's a challenging economy."
Nonprofits also should "telegraph the fact your organization is taking appropriate steps to survive and even thrive in a difficult time, rather than pull back," she says. "There's a difference between panic and taking appropriate steps in a challenging environment and communicating, communicating, communicating."