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.

Wednesday, September 03, 2008

Objections or Excuses to Fund Raising in Tough Times?

Every time the price of gas goes up, the economy takes a hit, consumers, business/industry and the government (at all levels) cut budgets, reduce spending and stop hiring. Florida's economy has taken a serious hit from the effects of higher gas prices and airfares to the tourist dependent Sunshine State. Add to this the fallout from the mortgage crisis and now the rising cost of home loans and it's a perfect prescription for passive fund raising. At present, the financial picture of Florida doesn't look like a Peninsula of Philanthropy.

This brief overview sums up the reason why so many board members of nonprofit organizations, local leaders and others are spending a lot of time raising objections rather than raising money to fix their nonprofit budgets. Are these real objections or excuses for not raising money in tough times?

Having received so many e-mails and phone calls of late about such objections, in this Blog I will share with you the top three objections my consulting colleagues and I have been asked to address and our responses. These are as follows:

Why try to fund raise? We all know, now is not the right time.

How can you not "try" to fund raise? What does not trying say about the importance of your organization's mission or the relevance of your case? Hasn't your message been that you are performing a vital function for the community? Isn't your mission even more relevant now?

This objection also strikes me as a sweeping generalization that most giving is done by corporations and businesses, when in fact we know that less than 15 percent of all giving is from this sector. Given the media coverage (hype), one would think the U.S. economy (the world's largest) is about to crash. Some would say -- the right time is when the nation's economy and the stock market are soaring.

Closer to home in Florida, one might say -- when the mortgage crisis is over, tourism and housing construction picks up. Keep in mind, even in the tightest market, many businesses flourish. It's the law of supply and demand. Some sectors are doing well; seek them out. Check what the experts say at the websites of Florida's public universities and community colleges. These economists provide valuable insights into what's ahead. It's not all gloom and doom. We still have 95 percent employment.

But, more to the point: The best time to raise money is when you need it. This isn't a fund raising issue, it's a communications challenge. You must convince your constituency that your mission is more relevant NOW than ever before. Remind them of the consequences of not meeting your mission. Who will suffer, go without, be worse off than they are today?

Money is tight, people won't give.

How do you know? Have you asked -- by mail, by phone or in person? Nine times out of ten when I ask that question the answer is, "Well, no we haven't, we just figured..." In tough economic times donors may not give as much as in the past, but they don't stop giving. Ask them to give what they can now and pledge more to be paid in the same year or future years. Pledges are not legally binding and 90 percent of the time donors do honor their pledges. When being interviewed for a new client account, I am always asked, "How much do you think we can raise?" My response is twofold -- "I can only estimate that if we do a feasibility study. But I can tell you how much you will raise if you don't get out and ask -- nothing." The history of giving shows that during economic slumps people continue to give, particularly to causes that are serving those most affected.

Some say right now is a really difficult time for the arts. Perhaps. On the other hand, the major donors to the arts -- financial service sector, stock brokers and individual philanthropists -- have seen the ups and downs before. Now is a good time to hug and hold on to them so when things improve they know you didn't abandon them or their passion for art, dance, music and theater.

Yes, money may be tight. Let the donor/prospect tell you that, don't assume you know. People who really care about your work and mission try to find a way to help. In the end, that's why people give -- they want to help.

We need to wait until there is a turnaround in the economy.

And when will that be? While your organization is waiting for this announcement from the business gurus on television, calculate how much money your organization left for the asking by nonprofit groups that kept asking while your organization sat on the sidelines. Even worse, imagine how croweded the starting line is going to be when television hosts Lou Dobbs, Jim Cramer and Larry Kudlow tell nonprofit leaders, "Ready, set, go."

I know, I know, you are just a staff person. You work for the board. It's your board that is dragging its feet. Well sure, they fear failure. Most board members, any given day, month or year, don't get out of bed in the morning and say, "I think I will launch a fund raising campaign today, that will be great fun." No, when it comes to fund raising, most boards do so reluctantly. Board members prefer to spend their time in examining budgets, scrutinizing expenses, developing policy and some, even micro-managing staff.

But what about the big picture? What about the organization's ultimate purpose -- which is called the mission?

Fear of failure is normal. In fact, it's healthy for board members to feel this way. However, with proper planning, the right message, a compelling case, good strategies and the right combination of outstanding staff and volunteers, nonprofits can not only survive in this economy, but flourish.

But, don't take my word for it. Ask your donors and prospects. You might be pleasantly surprised.

Please, let me hear from you.

All the best.

Jim Donovan

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  • At 5:49 PM, Anonymous Anonymous said…

    Jim, Thanks for the morale boost! My question lies more in the aspect of having a Gala. We are about to celebrate 25 years of service. Our plan was to have Title sponsors etc. Do we pursue this type of fundraiser or should we look at an alternative in celebrating this milestone?


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