Donovan's Donor Diary

If you are trying to raise money for your favorite charity/cause, Donovan's Donor Diary provides you with facts, tips and best practices on how to raise millions of dollars for people, pets and the planet.

Thursday, March 06, 2008

Raising Money in Tough Times

The three toughest periods for fund raising in the last century and in the first part of the new century were the great depression, the 70’s oil embargo and September 11, 2001. I wasn’t around for the depression, but I do remember the last two. Is it time to panic? I think not. Here are 5 Tips on how to ride this slump out.

Tip # 1 It is not about the MONEY your organization needs, it’s about the MISSION and how philanthropic gifts enable you to meet the mission!

In tough times donors and prospects want to be assured their money is getting to those that need help the most. Donors want to “fix” what is broken, mend that which needs mending and solve problems with solutions. Emphasize how your organization does that better than any other NPO. Peter F. Drucker said it best: “The nonprofit organization exists to bring about change in individuals and in society.”
  • Is your organization headed in the right direction to bring about such change?
  • Do you emphasize money over mission?
As for the money, there is plenty of it available to be given – in good times and bad. Some portfolios are down, others rise in markets like this. Private foundations and grant making foundations are still required to give a percentage of their assets each year to charity regardless of the economy. Florida is one of the top three wealthiest states in the nation. The money is here for the asking. Just consider how many uninvited millions of dollars are out there for the asking.

Tip # 2 It is not about your organization, it’s about those who enable you to meet your mission -- the DONORS!

Without donors, you can’t exist. No money, no mission. Donors need to know they ARE special and not taken for granted. Donors have hundreds of NPO’s they can give their hard earned money to. The better you treat them, the more you respect and appreciate them, the higher they value your organization.
  • Are your communications donor focused?
  • Do you provide recognition/appreciation EVERY issue of your newsletter or just in your annual report and honor roll of donors?
  • Do you have a monthly “Donor Spotlight” at your website?
  • Do you take the time to write handwritten notes?
Tip # 3 Fund raising in tough times is not about money, it’s about communication!

Growing up in Central New York, we had one choice for the nightly news, NBC. When I graduated from high school, ABC was added. After college, we got cable. My dad was thrilled. Being an elected official, he was thrilled to have access to the news 24/7. Today we have dozens of around the clock cable news channels, not to mention news on the Internet. Does anyone read the daily newspaper anymore over morning coffee? We humans have become a giant message absorbing sponge. Given the bombardment of messages--
  • How do you get your organization’s message out in such a cluttered marketplace today?
  • What creative methods are you using to cut through the clutter? How do you drive traffic to your website? Has it been updated?
  • Has there been a communications audit of your organization in the past five years?
  • Do you monitor the communications of your competitors? What does your constituency think about your organization?
  • Have you done a constituency survey?
  • Have you drilled down to the most common denominator to discover, from the end user’s point of view, the true value of what your organization is?
  • Do you use the end user’s words to describe what you do or those of a clever copywriter?
  • Do those words instill an “AHA” moment?

Tip # 4 In tough times you must position your organization as your turn in the barrel!

As consultants we interview hundreds of people each year in fund raising feasibility studies. One bit of advice given by wealthy individuals, executives of grant making foundations and government officials is this: “Tell your client to position their organization as its turn in the barrel.”

There is no shortage of news about budget cuts, hard times at the state and local level. This creates an atmosphere in which many nonprofit executives say, “Why try, there’s no money.” Given that attitude, I see an opportunity to get recognized in a small crowd of nonprofit executives making the case for giving. As the former Mayor of a Central Florida city said to me recently, “There are pots of money in government everywhere. You just have to know where to look and not accept the premise the well is dry.”

Decision makers have to make hard choices between your organization and other equally deserving ones. Your job is to provide the tie breaking rationale for your turn in the barrel.

Tip # 5 In tough times, remember the economic drivers of your region.

At one time the main economic driver of Florida was the Henry Flagler's railroad. Citrus, turpentine, lumber and cattle played a significant role in Florida’s early economy. What drove these commodities to markets north was Flagler’s railroad. More than any other entrepreneur, Flagler extended Florida commerce from the top of the peninsula to the remotest island of the Keys.

To learn about the economic drivers of Florida, check out Florida Trend Magazine. It covers Florida by region. Three helpful special issues are: Economic Forecast, Florida’s Top 100 Public Companies and Florida’s Top 100 Private Companies. They all provide insight into what is driving the economy of Florida overall but also by region.

One trend that is encouraging is the enormous creation of wealth in the last few years and the number of new personal/family foundations being established in Florida. Also, diversify your target donor base. Remember, 85% of all giving in the U.S. comes from individuals, put more effort and resources into cultivating and reaching them. Corporate and foundation giving slow down in an economic downturn for sure. However, there are thousands of individuals out there who have never been invited to give to your organization.

Check out the Foundation Center for names of newly established foundations in Florida. Get a volunteer to do prospect research on the Internet. Find out who is giving to organizations similar to your own across town or across the street.

Finally, don’t panic. Tough times make us all work harder. If this economy forces you to do take new and different approaches to your fund raising, GREAT! Your organization will be stronger for it in the future.

Let me hear from you. Comment here or drop me a note at:

Jim Donovan