For all of you who follow Do Good Better Consulting, you were clearly waiting for our hot takes on current economic signals right? Well here it is:
Full disclosure, I have zero experience when it comes to forecasting economic outlooks, but there are some pretty glaring signs that your fundraising may be impacted by factors out of your control, and your organization needs to stay on top of your communication with supporters, both big and small, in order to not be caught off guard.
There are seemingly daily reports of doom and gloom in our newsfeeds, but some of the more dire data may shape the donation decisions of our biggest fiscal backers in the early part of this year.
Our friends at the Chronical of Philanthropy have listed a few of the concerns that may pause donations, inhibit some slowing in the decisions to give across the board, and point to some long term issues that your nonprofit needs to acknowledge in order to build a plan that insulates your organization from a dramatic decrease in support.
Luckily, my brain spits out a 3rd grade level of what’s going on and how you can prep tangible responses to each of them!
1. Inflation is up over 7%.
Have you noticed your grocery, electricity and gasoline prices are up significantly? It’s not your imagination. Supply chain issues (along with a bunch of free market hiccups) have sharply increased the cost of stuff. All sorts of stuff. That means, your average donor has less money left over to consider giving to nonprofits.
In order to counteract the natural reaction to pull pack giving, your organization has to do a better job of taking the time to reach out and make sure they know the impact you make to those you serve matters. Every person gives to multiple nonprofits or groups throughout the year. Not having as much won’t eliminate their generosity entirely, but they might stop giving to ALL of their previous organizations and pick fewer to support.
You want to make the cut for them to support. Do that by going the extra mile to communicate and build rapport with so your nonprofit is one of the entities that means enough to them that regardless of economic issues, they still want to be a part of the mission.
2. Stock Market is Down 6%
It’s best not to look at what your 401K or investments are doing over the past few weeks. In fact, just make a pledge to yourself that you don’t peek at it until 2025. It’s not good, and this major correction in the market (while probably needed) isn’t fun to watch in real time. Don’t even get me started on what my crypto holdings are down. To the moon!?!? What moon!?
Your major donors however, are paying attention. A lot. And the uncertainty in the market will make for less in-the-heat-of-the-moment giving happen for some donors. When the stock market is humming, there is comfort in a larger donor to give more freely, as they “feel” as if they are doing well financially. However, when all the numbers are red, donors may first give pause to account for the slide and gifts might be held on to for longer than expected.
Your job is to give them alternative opportunities to help move the mission forward. Because downward slides don’t last forever in the economy. But downward slides of engagement sure might. Keep your supporters in the loop, make sure they resonate with your mission and are constantly reminded of the good your nonprofit is doing. You get to ride out the economic storm together, and when things get back to the boom…well, then….BOOM. You’re back in business!
3. Wages Are on the Rise!
What? That’s a bad thing?
No. Its great – for businesses and organizations who can afford to pay more and give more aggressive benefits to attract talent leaving for better and more stable financial situations.
However, this makes for two issues: Your business donors may spend more time spending money on recruiting and retention than philanthropy and your OWN organization may need to concentrate on HR and hiring issues more than fundraising priorities.
It’s awesome that being paid a living wage for work individuals do is a conversation that is occurring on a national level. But that means people, not philanthropy, is the topic discussed by entrepreneurs and business leaders rather than what nonprofits need support. Any distraction that jolts the confidence in how the business is doing or will do in the future affects the swagger in which individual business owners choose to give back. The less confident they are about their own bottom line, the confident you can be of their support.
Is there a way you can communicate about partnerships with your supporters or find common ground in the struggle to hire and keep employees? Not only will that create a deeper bond between your donors and your nonprofit (conversations about things different than just “give us money!” does that) but you may position your organization as less of a “charity” and more of a driver of economic good. And in the long run, that type of relationships can help bolter your status with business leaders. No longer will you be the “cute” nonprofit, but a player at the table with other big decision makers in the community.
Yes, this bubble might be popping, but don’t think of it as a solely negative situation. How can you involve your donor base, communicate with them about the impact you continue to make, and that your sustainability is critical to making your region a better place?
Figure that out, and no matter what the economy does, you’ll be insulated from radical disruption in funding, and in the long term – like my brother promised me when I invested $50 in Ethereum* – you’ll come out of this smelling like a million bucks.
You got this!
*I will totally never get that $50 Ethereum investment back will I?