MWD BLOG

Since March 2020, we’ve all faced tough times in our personal and professional lives. While we did experience a positive trend of growth in fundraising in the first 18 months of the pandemic, COVID created supply chain and staffing challenges that affected our industry. In 2022, adding on to those complications is inflation—the highest it’s been in 40 years. The war in Ukraine has sparked substantial increases in food and energy costs across the globe and rattled American confidence in global stability. Ongoing political and social debates are not only increasing in intensity but having a real impact on people’s lives. And as if that wasn’t enough, the U.S. stock market has just suffered its worst six-month start of a new year in more than 50 years. So naturally, donors, just like us, are concerned right now.

Some nonprofit organizations began seeing declines in their direct response returns in the last few months of 2021 and, according to industry benchmarking, most saw declines in the first quarter of 2022. If your program is experiencing reduced revenue in 2022, you are not alone.

We don’t fully know where this turbulent global economy will lead us in the coming months or what it will mean for fundraising programs. But we do know that any one of the issues we’re facing can affect fundraising returns and donor behavior.

Based on our analysis and experience, we have outlined some thoughts and recommendations that we hope you’ll find helpful as you work to keep your program strong and effective.

But before getting into our ‘forward-looking’ recommendations, it may be instructive to take a step back and remember the lessons learned during and after the last recession of 2007-2009.

That recession created large and small fundraising challenges for almost every nonprofit organization. Our founder, Mal Warwick, even wrote a book about it: Fundraising When Money is Tight: A Strategic and Practical Guide to Surviving Tough Times and Thriving in the Future. And although he wrote it 13 years ago, Mal’s strategic and practical advice still rings true.

Among Mal’s recommendations were:

• Stay the course, but fine-tune your messaging and your case for giving
• Segment more carefully, and get more personal with your best donors
• Step up your multichannel efforts, and focus on monthly giving programs
• Break down the silos in your fundraising, marketing, and communications teams

Both our analysis and other outside studies showed us that the organizations that performed best during (and after) the last recession were those that:

• Did not panic and took a long view;
• Maintained their new member acquisition program and resolicitation schedule;
• Paid extra attention to mid-level and major donors;
• Focused on increasing the number of monthly donors; and
• Remained flexible and nimble enough to respond to changing times, timely issues, and opportunities.

We understand it’s difficult to stay the course when revenue is down, costs are up, and when issues like war, abortion rights, gun violence, climate change, the mid-term elections, and the Insurrection Hearings are weighing on you and your donors. It’s clear that we’re in the midst of tumultuous times—and in the months, maybe even in the year ahead—we will likely experience financial pressures and organizational stress. To ensure your program remains on track, and to emerge stronger at the end of this economic period, we recommend the following:

• Prepare your team, organizational leadership, and even your Board of Directors for anticipated changes in fundraising revenue and Key Performance Indicators—and provide regular updates on the program’s health. And be prepared to reforecast more frequently than you may be used to.
• Prepare your donors, too! Use emotional language and simple, forthright messaging. During times of natural and humanitarian crises, we often harness the emotion that we’re all feeling in that moment. But with so many crises over the last couple years, feeding that anger isn’t enough. Acknowledge this is a challenging moment in history for all of us, that your organization knows it’s tough, that the answers to our most difficult problems can be found within our communities, and that the best way to provide hope for the future and to overcome the challenges we’re facing is to work together. Trust your donors’ intelligence. Link arms with your supporters and remind them that—through it all—you are partners creating a better world.
• Protect, maintain, and possibly even expand acquisition levels across all channels. Acquisition returns may decline, which may lead to shrinking donor files, but the mid-range and long-term effects on fundraising programs will be even worse if you cut the acquisition of new donors to save on costs during this time.

 In addition, focus on the following as you work to navigate these challenging times:

• Staying nimble. There may be times that fundraising communications will need to change schedule or messaging based on current events. While you may be locked into certain efforts due to production schedules or staffing shortages, other programs can quickly adapt. Collaborate with your teams to take advantage of new tools or tactics that may reach new audiences or cultivate current ones.
• Expanding the multichannel approach for your programs by utilizing each channel for its most effective purpose and reinforcing messaging across channels. That includes digital, mobile, direct mail, and telemarketing.
• Continuing to test regularly but judiciously, including tactics for cost savings, while understanding the potential negative impact if we attempt riskier, outside-the-box concepts. It may be worth it to break through the clutter, but it could also fail in the short term.
• Staying in front of your best donors, especially the mid-level group, by using tried and true techniques that honor their involvement and keep the relationship strong.
• Focusing on sustainer recruitment and conversion to grow your number of monthly donors. There may be different and low-cost techniques you haven’t tried yet, like EFT payment and text solicitations. These donors will help you through hard fundraising times.
• Utilizing sophisticated segmentation models to ensure you’re sending the right messages to the right donors, providing the maximum amount of net income, and keeping the file active.
• Conducting scenario-planning exercises to project investment options and executing benchmark studies to provide information on industry trends.
• Testing ask strings. Some donors may not be able to give what they used to, but we need to let them know any gift they give today still makes a difference. Many donors will give more—and we can try smart upgrading tactics through targeted solicitations and ask string adjustments.
• Keeping stewardship front and center by ensuring acknowledgments are warm and timely and introducing more loyalty messaging in appeals.
• Continuing to communicate about legacy and planned giving options. We’ve observed that organizations with the most consistent programs are the ones that maintained a consistent drip of legacy messages over time. During previous economic downturns, organizations that maintained or even grew their investment in fundraising—including legacy giving— were better positioned for future growth.

We hope these recommendations will be helpful to you, your staff, and your organization’s leadership —as Mal reassured us on the last page of his Fundraising When Money is Tight book several years ago, “It will get better.”

 - Mal Warwick Donordigital Leadership Team