10 Ways to Raise Money in a Recession
October, 2011It’s a topic that’s on every nonprofit Executive Director, board, and staff member’s mind these days. How can we possibly raise money when the economy is in such turmoil? Well, there are ways. Here are a few:
These times are tough, but there are solutions. It’s simply a matter of taking a step back and being strategic about find new answers.
- Harness Your Board. Your board of directors ideally is a group of people who are committed to and invested in your organization. They also, we hope, bring to the table relationships and connections that could help your organization. Tap into that. Educate them on what your organization needs and brainstorm with them about who they know and how they can help. Ask those who have the capacity to give at greater levels to do so. Now is not the time to be shy. Be strategic about what your board can do to help and then ask them to do it.
- Take Good Care of Your Donors. Make sure you keep, and even upgrade, the donors you already have. Thank them for every gift they make in 24-48 hours with a thoughtful, results-focused letter demonstrating real appreciation and connecting them back to the mission and work of your organization. Reconnect with those donors who made a gift 3-6 months ago thanking them again and asking them why they invested and what you can do to continue to invest them. Begin renewing donors who gave 9-12 months ago. Customize your renewal as much as possible. Donors like to know that the organizations they give to know them, their interests and why they give. Gather and use that knowledge to reinvest (and even upgrade) your donors.
- Plan. If your organization doesn’t have a strategic plan and a development plan, create them. You raise money by being strategic, first about what your organization is and does, and second about how you are going to create sustainable revenue streams. People give to organizations and causes that they care about, and they give even more money to organizations that are smart about what they are doing and how they are doing it. A good strategic plan is an invaluable tool around which a fundraiser can build investment. And a good development plan gives a fundraiser a step-by-step way to generate revenue.
- Reallocate Resources. As a nonprofit organization you have limited resources (money, staff, technology, time) with which to raise money. You want to make sure that the effort you put into fundraising has the highest return on investment. Are you sure that the event that just raised you $30,000 was the best use of your staff time and effort? Calculate the direct and indirect costs of that event and determine the real net income you generated. Are there better, more effective ways to raise more money for less cost and effort? Take a hard look at how you are raising money and reallocate your limited resources to fundraising efforts that will net more money.
- Use the Internet. Move some of your communications with donors and prospects online. You’ll save money and have a better chance of getting more and bigger gifts. I’m not just talking about your direct mail letters, but also event invitations, surveys, newsletters, online communities, blogs, etc. Send email invitations for your events. Survey your donors about how best to communicate with them or what they think of your organization. Launch a blog that gives donors and prospects a behind-the-scenes view of your organization and its work. Harness online technology to more effectively personalize your communication with your donors for a much lower cost. They will become more interested in your work and more invested in the organization.
- Build Your Infrastructure. Because you have limited resources it is important that you spend your money on the very best infrastructure you can afford. Don’t skimp on your donor database or online email marketing software. There are many options out there, do your research and make sure you are purchasing something that will decrease staff time while increasing productivity. When you are hiring staff make sure you are getting the best and the brightest. Spend the time crafting a thoughtful job description and position posting, create resume review criteria and interview questions that will uncover candidates’ skills, experience, working style, and past results. A top notch Development Director can completely turn a fundraising operation around. Take your time and find the best person for the job.
- Keep Learning. Don’t cut professional development and best practices research during these difficult times. Now is the time to learn from others, get a fresh perspective, find a mentor for your fundraiser. By getting out and hearing what others have done, how to improve skills, how to do things differently and more effectively they will continue to grow revenue and the sustainability of your organization.
- Strengthen Your Case. Money is raised around a case for support. It can be tempting when times are tough and budgets are shrinking to fall back on a fundraising message based on need. “We need to raise $50,000.” But the best way to raise money is to clearly and articulately connect donors with what you are doing to impact the community. Your case for support makes this connection. If you don’t have a case for support, write one. If you have one, revisit it and make sure that it is compelling, clear, concise, inspiring. Once it is, use it throughout all of your collateral and fundraising materials, letters, emails, etc. You want to invest donors in the change you are creating. Fundraise around that and you will see increased investment.
- Clone Your Best Donors. When you are struggling to find new donors, go back to the source. Dig into your database to find out the characteristics (demographics and psychographics) of your best (most years of giving, biggest dollar, greatest upgrade) donors. Then survey them (formally or informally) to find out why they give, what messages resonate with them, what they read, where they get their information and so on. You want to understand how they tick so that you can find others like them.
- Diversify Your Funds. When one revenue stream (or several) is down, you want to be able to draw on other streams. Are there other revenue streams you could launch or strengthen? If you’ve never gotten foundation dollars, do some research on foundations that give to organizations in your program area. What about corporate money, do you have a program or event that a corporation might like to sponsor because it hits their target audience? Have you looked at earned income? Do you have an asset that might be saleable? How is your individual donor base? Do you have on-going annual givers? If not, could you launch an annual fund program? There are many ways to raise money and always potential for new avenues. Explore whether some of these make sense for your organization.
About the AuthorNell Edgington is President of Social Velocity (www.socialvelocity.net) a social innovation company that helps nonprofits use new tools to expand their impact and find new resources. As part of this, Social Velocity connects Texas and the Southwest region to the national movement for social innovation (social entrepreneurship, social enterprise, social investing). The goal is to move the social sector to the next level where we are addressing root causes of social problems while creating sustainable nonprofit organizations. She can be reached at firstname.lastname@example.org or via the Social Velocity blog at www.socialvelocity.net/blog.
Your TXNP Weekly E-Newsletter is made possible by the generosity of: