The celebration around a new year has faded away, and the reality of the nonprofit world still holds true. We continue to operate in a struggling economy. For nonprofits, this means the need for services to continue to increase while many agencies experience decreased or stagnate giving from donors. Patrick Rooney from the Center on Philanthropy at Indiana University recently said, “If the economy continues at the slow rate of growth in 2010 and 2011, total giving will take over a decade to reach pre-recession levels.”
With the impact of the new fiscal cliff deal, donors may continue to be wary and cautious in their philanthropic efforts, whether it is withholding a planned gift or keeping the same giving levels as years past. Other donors have become weary in carrying the giving load for several years. In our work with over 80 nonprofits in the past four years, PMA has observed three ways to engage wary and weary donors in uncertain economic times.
Provide transparency. It seems simple enough, but the reality doesn’t always come so easily. Just look at the news coming from the sports world this week with Lance Armstrong. More than ever, donors require a transparency in leadership and finances. PMA encourages you to be courageous and share what’s really happening in your organization. Transparency for nonprofits includes consistent reporting, availability to answer questions, openness to feedback and other models and strong communication with the board. Providing transparency communicates confidence and integrity for your organization.
Create conversation. We live in the information age, and more donors are educated about causes and efforts than ever before. It is an incredible opportunity for nonprofits to tap into the potential of their donor knowledge and engage new people in an agency’s overall conversation. When staff members are the only ones evaluating an agency, things may always look the same. Why not ask donors to join brainstorming sessions on strategy? Invite donors to spend a day in your office and provide feedback on day’s end about his or her observations of the office atmosphere or client situations. Creating conversation with donors changes an organization for the better, while engaging new people with fresh perspectives.
Communicate impact. While most fundraising budgets are based on 80% acquisition of new donors and 20% retention of donors, the post-recession era of giving demands a significant change in these budgets. With the increased education of donors, the expectation to see results has also increased for organizations. In the past, major gifts could be acquired for individual clients and needs. While some major gifts are still designated for those purposes, more major gifts are being directed to community-level impact initiatives. The real impact of the fiscal cliff deal is that investments require a greater deal of engagement now. This not only relates to a person’s IRA, 401(k), etc., but also his or her charitable investments over a longer period of time. Communicating the impact of your organization’s efforts on the community will become critical in 2013.
Wary and weary donors will always be part of the nonprofit landscape, yet this post-recession era builds even more cautiousness and fatigue into donors. Providing transparency, creating conversation and communicating impact are three ways to engage these donors and potentially create long-term relationships for your organization and your community.