Success During a Recession

I heard from DonorPerfect that their clients have seen a 6% increase in donations during this economic downturn. I thought it would be great to hear why they have experienced success while other nonprofits are having a hard time. Jon Biedermann, Vice President at DonorPerfect offered to share some tips as to why they have been so successful.

What has your organization done to create such great success in spite of a down economy?

I think our clients are more successful because we work closely with them to:

  • Raise more money by uniquely targeting donors with the right message
  • Build donor loyalty through better communications and acknowledgments that increases overall giving
  • Analyze trends and patterns within their database to identify missed opportunities
  • Track all information in one data source so that “no donor goes untouched”.

Another reason why our clients are more successful has everything to do with technology. For example, most nonprofits don’t use professional fundraising software- they muddle along on spreadsheets or cobbled-together Access databases. These solutions really aren’t solutions at all, and in many ways hurt an organization’s chances to grow.

What can nonprofits do to increase their giving during this time?

There are many ways nonprofits can continue to grow their giving, even during times such as these. Here is a recap from a recent blog post of mine:

  1. Be honest. Mention the economy in your appeal. One of the reasons people give is to help others not so fortunate.
  2. Offer an upgrade path. Encourage people to give more than in the past (while still offering their same support level).
  3. Offer a monthly giving program or pledge option. Donors usually contribute more when they have the ability to spread out payments over time.
  4. Offer a credit card option. Average donations for credit card gifts are up to 20% higher than other forms of payment.
  5. Be persistent. The number one reason people give is because they are asked. In fact, it usually takes 3 to 4 ‘impressions’ before people make a donation.

One of the greatest mistakes that organizations can make during times like these is to stop certain fundraising activities, such as acquisition campaigns. Though it is expensive to acquire new donors, the cost savings that they may realize today pales in comparison to the future revenue that is lost. Therefore, now more than ever it is important to keep fundraising to ensure your future income flow.

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5 Responses to Success During a Recession

  1. Scott Rooks says:

    This is a well put together post that all nonprofits should consider. We need to forge ahead with fundraising during these times to help those in our community that need us. Sure the big donors are fewer right now but your suggestions about credit cards and spreading out payments helps everyone.

    Thanks for the encouraging word!

  2. Janice Chan says:

    Jason, you’ve mentioned some really great points. Something else that is important to keep in mind (may be more salient for major gift donors and sponsors more so than people who donate via direct mail/the internet) is to keep treating people as well as you’ve always treated them. I know you’re a proponent of every donor a major donor, and especially now, I think it means a lot more. For example, even though some companies weren’t able to sponsor our events at the same level, for the ones who have been with us since the start, we treated them as if they had sponsored at the previous level (e.g. color ad in the program instead of black and white, other forms of recognition, etc.). Talking to someone else who works in marketing at a for-profit company, he mentioned that for one of their major sponsors (or whatever you call people who buy ad space) had to cut back a bit this year, but they gave them extra ad space that hadn’t sold when they could, etc. It was minimal effort for my friend’s company and the sponsoring company really appreciated all these little things since they were having a really tough year. I guess this is just another flavor of “every donor a major donor.”

    With regards to #4, however, I wonder if it’s purely a mental thing that people are willing to donate more via credit card rather than cash. While on one hand, I’m sure most people wouldn’t donate money if they had to worry about making ends meet, I also wonder if it’s responsible to encourage people to donate more than perhaps they had budgeted for, etc. Sometimes people make large pledges and don’t want to admit that circumstances have changed and they can no longer afford to donate as much per year etc. Again, probably not an issue for the people who still have extra room in their budgets to donate, but just something I wonder about sometimes.

  3. […] Biedermann, Vice President at DonorPerfect shared his thoughts about success during a recession on A Small Change […]

  4. Seth Bloom says:

    While I agree the economy has presented challenges for nonprofit organizations, I think it has become a convenient “excuse” for some nonprofit organizations as well as donors. The donors are easy so I’ll start with them.

    For many people, their income is the same as it was one year ago, even if their savings/investments have declined, which for many people is money they’ll recover between now and the time they intend to use the money. For most donors, contribution decisions are based on current income, at least for annual campaigns which are typically the lifeline for an organization’s operating budget. Let’s also keep in mind there are people whose financial lives have improved because of our down economy. Certain businesses by virtue of the services they provide or the products they sell are poised to make more money when others are hurting. We also know there are some donors who are most likely to step up and stretch their giving when the chips are down … becoming a “hero” in a down economy can be quite compelling for certain donors.

    For some nonprofit organizations, I think too many of their challenges are being attributed to the tough economy. Perhaps our tough economy should be considered a “wake up call” for many nonprofit organizations about their operations which donors may be scrutinizing now more than ever.

    I was disturbed to read an article recently in The Jewish Daily Forward an article titled “The Perfect Storm’ for Day Schools” (http://www.forward.com/articles/112003/) in which I frankly feel the economy was used as a scapegoat to avoid perhaps some of the more difficult realities. While I’m not arguing the economy is not a factor. I can’t help but wonder if the school has done any kind of self-evaluation of their program to determine the perception of it among potential families shopping around. Perhaps their facility isn’t well maintained, perhaps their leaders aren’t equipped to be effective good will ambassadors, perhaps their marketing efforts are misdirected, etc. If donations are down, it could also be a reflection of weak relationships maintained by the school with their donors who are directing their support to the organizations that have done a better job of stewarding the relationship and ensuring ongoing support.

    My personal feeling is that one reason why the economy is “so bad” is because the perception of the economy is “so bad.” I believe leaders in nonprofit organizations have an opportunity – and responsibility – to ensure vital services continue and one thing we can all do to help is to stop talking doom and gloom and commit ourselves to “going the distance.” This may include challenging ourselves to take an honest assessment of our organizations and do what we know we’re supposed to do or what we say we do. Perhaps now, better than ever.

    I welcome your opinion.

    Seth Bloom, President
    Bloom Metz Consulting
    http://www.bloommetz.com

    Specialists in nonprofit fundraising, strategic planning, marketing and leadership development

  5. Jason Dick says:

    Seth, thanks for your comment. Have you heard the country song, “Sounds Like Life to Me”? Basically two people are out having a drink and one is talking about how hard his life is. The other person tells him that his problem sounds like life to me. I think you’re point is a good one. Sometimes fundraising is just hard work. Whether the economy is good or bad people still have wealth and a desire to make a difference. I agree that we have probably blamed too much on the economy. If we focus on the economy we are not focusing on the areas of our organizations that we could change and improve that could make a significant difference.

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