recession – The Healthy Non-Profit

Can we please stop talking about how bad the economy is?

March 4, 2014 erik Fundraising

That is it . . . I am fed up and can’t stop myself from saying something that has been on my mind for a little while now. Can non-profit organizations please stop running around and telling anyone who will listen that the economy is bad and the recession is hurting their agency?
I hear my non-profit friends (both staff and board volunteers) bemoaning how bad it is and how they’ve been impacted. I know that I’ve heard it at least once a month going back to the 2008 stock market meltdown, which by the way was FIVE YEARS ago.
I totally understand why people were talking about this 12 to 24 months removed from the epicenter, but as I just pointed out more than half-of-a-decade has passed since that time.
The fact of the matter is the recession officially ended in June 2009, according to Cycle Dating Committee of the National Bureau of Economic Research. Don’t believe me? Just go ask Google.
In fact, the Blackbaud Index just arrived in my email inbox, and they are estimating that charitable giving rose 4.9% in 2013. Additionally, online giving increased by approximately by 13.5%.
When I see numbers like these, it always stirs my emotions when juxtaposed against comments such as:

“The economy is bad and donors just aren’t giving.“
“We can’t ask people for money while the economy is still doing so poorly.“
“Our agency hasn’t recovered from the economic downturn.“
“Our board members are afraid to ask their friends for charitable contributions as long as the economy is doing so poorly.“

Believe it or not, I heard some variation of each of these comments just this last weekend!
At first, I found myself shaking my head and asking the obvious question, “WHY?” However, I quickly stopped that when I realized that I know the reasons why. Here is what I think drives those comments:

Fear is irrational and people believe what they believe in spite of facts.
Some parts of the country are taking more time to emerge from recession.
Some non-profit agencies never adjusted their revenue model and resource development plan to accommodate for what economists are calling “The New Normal“.
Some non-profit professionals are always looking for excuses to justify poor fundraising performance.
Some misguided fundraising professionals and volunteers think pleading poverty and pointing at the economy makes for a good “case for support” (which really works the opposite way on how donors perceive your case).

Regardless of whether or not you believe these reasons, the reality is that we need to shake ourselves out of this mindset. Our clients deserve better and whining has never been shown to solve problems.
So, what should you do to combat this mindset? I suggest the following:

Involve your volunteers in developing a new resource development plan and answering this simple question: “If how we raised money before the recession doesn’t work anymore, then what should we do to secure the resources we need to fund our mission today?“
Involve your volunteers in developing a new case for support document and build consensus to stop talking to donors about the economy.
Be the change you want to see in the world and stop talking about the economy.
Take your volunteers by the hand and go with them on cultivation and stewardship visits with prospects and donors.
Engage in benchmarking activities and compare your agency’s fundraising performance to other non-profit organizations (e.g. check out Blackbaud’s performance comparison tool by clicking here).

What are you doing to combat this insidious, self-defeating mindset that is still pervasive in many non-profit boardrooms? Please use the comment box below to share your thoughts and experiences. We can learn from each other.
On a side note, before you take me to task with comments about my insensitivity, please know that I know there are people out there who are still hurting. I have never said there weren’t. In fact, I know some of those people, and I am sure you do, too. However, the reality is that non-profits cannot wait until there is no more unemployment. Our agencies cannot wait until economic indicators are back to the ridiculous 1990s levels. Those who wait for that to occur won’t be in business for much longer. Let’s rediscover that often-celebrated “American spirit” of picking ourselves off the ground and doing the hard work to get our agencies moving again.
There! I’ve said it . . . now please feel free to excoriate me. 🙂
Here’s to your health!
Erik Anderson
Founder & President, The Healthy Non-Profit LLC
www.thehealthynonprofit.com
erik@thehealthynonprofit.com
http://twitter.com/#!/eanderson847
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http://www.linkedin.com/in/erikanderson847

Do your donors think the non-profit sky is falling?

December 12, 2012 erik Fundraising

chicken little2 When I hear one donor say something once, I chalk it up to something interesting. When I hear two donors say the same thing, I usually think it is an interesting occurence. However, when three or more donors express the same sentiment, I sit up . . . take notice . . . and treat it like a potential trend.

Since the Presidential election was decided more than a month ago, I’ve more than three donors say alarming things about the state of philanthropy in this country. Here is some of what I am hearing:

“Congress and the President won’t agree on the fiscal cliff negotiations. We’re going off the fiscal cliff, and charitable contributions will go down.”
“Obama wants to get rid of people’s charitable tax deductions, and this will result in a reduction in donations.”
“The Bush tax cuts on the wealthiest Americans will be allowed to expire, which means wealthy Americans will stop giving to charities.”
“Congress and the President will go off of the fiscal cliff. Everyone’s taxes will go up. Another recession will surely result, and charitable giving will dip as a result.”

I am not exaggerating. There are a number of donors and non-profit board members with whom I have spoken in the last month that think the sky is falling.

At first, I thought this talk was the result of Republican donors being unhappy about a Obama re-election. However, I’m beginning to re-think this original opinion. I honestly think people are getting scared.

There are multiple reasons for this hysteria and probably include a 24-hour media cycle, political rhetoric, etc. Regardless, the ‘WHY’ doesn’t matter . . . non-profit professionals need to focus on ‘WHAT’ they should be doing and saying.

chicken little1 While fear is irrational, it definitely impacts human behavior. I believe most students learn this in Psychology 101. So, if people “think” the sky is falling, it is falling regardless of the facts.

You can passively sit by and let your donors and board members whip themselves into a frenzy, or you can be a responsible non-profit professional and do something about it.

I have always believed that an “ounce of prevention is worth a pound of cure”. In this instance, I believe that good non-profit professionals will inject a calm and reassuring voice into any local discussion being had with board members or donors.

Of course, being calm and reassuring is easier said than done, and it requires a firm grasp of facts. Unfortunately, the facts shift and change and are subject to interpretation. However, I was very encouraged when I saw that BoardSource is hosting a webinar featuring Tim Delaney, CEO of the National Council of Nonprofits. He will speak to the issue of fiscal cliff, capping deductions, etc.

THIS WEBINAR IS SCHEDULED FOR TODAY (WEDNESDAY, DECEMBER 12, 2012) AT 2:30 PM CST, BUT IT LOOKS LIKE YOU CAN STILL REGISTER BY CLICKING HERE AND FOLLOWING THIS LINK.

Once you get some of the facts about the issues, you should feel more comfortable participating in these type of conversations when they come up with donors and volunteers.

chicken little3 Here are a few quick tips you may want to remember when jumping into these discussions:

Don’t express partisan opinions. Stick with the facts about what is being discussed. I encourage steering clear of expressing an opinion on what you think the impact will be. Put the crystal ball away!
Be reassuring and express confidence that these things always work themselves out in the end. History proves this to be true time-and-time-again.
Remind donors that tax considerations are rarely a motivating factor in most people’s charitable decisions. Donors give to good causes with good missions. Tax considerations (if they are even in the equation) are frequently a final factor and contribute to size of gift and rarely on whether or not to give.
No one can predict the future, and getting all worked up about something we can’t control is an exercise in futility. All we can control is our own actions .(e.g. who do we ask now, for how much as we asking, when are we asking, etc). Let’s remain focused so we don’t accidentally get swept up in something that doesn’t yet exist.

Are you hearing some of your donors and board members wring their hands over this policy debate in Washington D.C.? If so, what are you doing to make sure your year-end giving isn’t negatively impacts? Are you doing anything at all? Are you remaining silent?

If you end up attending the BoardSource webinar today, please circle back and share a few of the details in the comment box below. If you can’t attend, please weigh-in with your thoughts on the the questions I just posed or any of the ideas I just expressed.

Here’s to your health!

Erik Anderson
Founder & President, The Healthy Non-Profit LLC
www.thehealthynonprofit.com
erik@thehealthynonprofit.com
http://twitter.com/#!/eanderson847
http://www.facebook.com/eanderson847
http://www.linkedin.com/in/erikanderson847

Tips for surviving a double dip recession

August 26, 2011 DonorDreams Board development, Donor-centered fundraising, Fundraising

Yesterday I blogged about my neighbor Larry and how I see his handyman business as an economic indicator and proof the economy is dipping again into recession. I also cited recent survey data indicating that donors are planning to tighten their belts in the coming months. If you didn’t get a chance to read that post, click here and then come back for today’s follow-up post.

While there is nothing any of us can do to stop the economic tides from rising and falling, I submit that there are things we can do to prepare for such occurences and the following are a few tips you might want to consider:

Tip#1: Get closer to your donors and not farther away.
Donors are part of your non-profit family. During tough times, families pull together. They don’t ignore each other. Your instinct might be to give donors space, solicit them less, and be respectful of limited resources. Even though these are good intentions, the message you’re sending is that donors are only your friends during prosperous times when they have money. Don’t send the message that donors are only ATMs in your eyes. Find ways to engage them.

Tip #2: Tell donors what you are doing to help your clients get through tough economic times.
Donors like to see “return on investment” when they make a charitable contribution. When recession-thinking permeates our donors thoughts, lets embrace the moment and show them how their contributions are making a difference in the lives of others. Don’t use “guilt messaging” to solicit. Use “we’re all in this together” and “neighbors-helping-neighbors” as part of your stewardship messaging.

Tip #3: Invest in volunteer management and promote volunteerism like never before.
There will be people who want to support your mission, but cannot do so financially during tough times. Providing people an opportunity to support your mission by donating their time will: 1) help you pull them closer and not push them away (see first tip), 2) cultivate future donors (because the recession will end one day and they will be able to donate again), and 3) help your agency’s staffing budget as you might be considering budgetary cuts.

Tip #4: Invest a lot more time in re-building or manicuring your board of directors.
Your case for support will never be greater than now. As you approach board volunteer prospects, they won’t need any convincing that you need as many talented people around your board room table to help make difficult decisions and weather an economic storm. Find the time! Figure out how much time your organization spent on board development in 2010, then double or triple the amount of time you spend on it going forward. Doing so will help you survive and position you to be very strong on the other side of this recession.

Tip#5: Don’t stop soliciting individuals.
Individual giving is where it is at in charitable giving. Spend most of your time cultivating, soliciting, and stewarding individuals and less time on foundations, corporations and government. This is a great time to invest in building your annual campaign or annual fund drive and dial back a little bit on special events. Think about it for a moment . . . during tough times people eliminate “frills” like entertainment. Many of your donors probably see their special event contributions are “nights out on the town with a charitable angle”. I assure you that they look at their annual campaign pledge very differently. Don’t eliminate all of your events, but now might be the time to kill old and tired events.

There are literally two or three more handfuls of tips I would’ve provided, but I’m running out of space. So, I encourage you to use the comment box below to weigh-in with your thoughts, tips and current strategies. We can all learn from each other!

Here is to your health!

Erik Anderson

Owner, The Healthy Non-Profit LLC

eanderson847@gmail.com

http://twitter.com/#!/eanderson847

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http://www.linkedin.com/in/erikanderson847

It’s baaaack: Double dip recession

August 25, 2011 DonorDreams Fundraising

My neighbor is the owner of Larry’s Home Maintenance, a small handyman business. He has been in business for approximately five years after getting laid-off from his IT job at Motorola. While Larry (pictured on the right) is our friend and handyman (yes, his work is awesome), he is also my “canary in the coal mine”.

When Larry’s phone stops ringing (like it did in 2008), I know the economy is in bad shape and a recession is either around the corner or it is already here. For most of 2011, Larry’s phone has been ringing off the hook. This isn’t surprising because when the housing market is in the toilet people tend to start pouring money into home improvement projects. On average, he has been receiving 20 phone calls per day.

In the beginning of August, Standard & Poor’s downgraded the United States’ credit rating and the European Union entered into another round of debt crisis discussions involving Greece, Spain and Italy. The future of the eurozone was called into question. When this happened a few weeks ago, Larry’s call volume dropped from 20 calls per day to approximately five. When I saw Larry yesterday, he said that his phone has “stopped ringing”. And he means that literally . . . potential customers have stopped calling.

Larry’s call volume is a lagging economic indicator. It accurately forecasted 2008 and I suspect it is doing the same thing now.

Every non-profit organization has relationships with a “canary in the coal mine” like Larry. They are called “DONORS,” and staying in regular contact with them will help you kinda/sorta predict the immediate future and allow you to take corrective action that might permit you to glance off of the iceberg rather than hit it head-on.

So, if you think Larry is “off his rocker,” you might want to read this blog post from yesterday’s The Chronicle of Philanthropy titled “Two-Thirds of Donors Plan to Cut Back on Giving This Fall“.

If you already clicked the link, read the article and returned to finish this blog post, then you know that 68-percent of survey respondents recently said they plan on cutting back their charitable giving for the remainder of 2011. While I am usually suspicious of “survey data,” the combination of Larry’s situation and The Chronicle’s story has me saying “Uh-Oh”.

Of course, there isn’t anything a non-profit organization can do to change this situation. So, the better question we should all be asking is: “What should we be doing TODAY to position ourselves for a double dip recession that minimizes the impact on our clients?”

I will use tomorrow’s blog post to look at a few options you might want to consider implementing. In the meantime, please use the comment box below and share what you are thinking and possibly planning to do. What are your donors telling you? Share your canary in the coal mine stories. We can all learn from each other!