In last week’s Burk’sBlog on fundraising in economic turmoil, I said: “Now is the time to reassure them [your donors] that your organization has a bottom line – that regardless of where the economy goes, your not for profit will still be out there, fulfilling your mandate as energetically as possible.”
I was reminded of the depth of fundraisers’ concern when a colleague commented, “What if giving falls so far that not for profits can’t actually give donors this assurance?”
I quickly responded, “This is the conversation you need to have with your CEO.” As the words were coming out of my mouth I realized that this unprecedented economy has handed fundraisers an opening to finally get real action on donors’ biggest concern.
The current economy is merely exacerbating a fundraising problem that has been around for a long time. On one side are Boards and CEOs insisting that they have to have the money now and that as much of it as possible must be raised unrestricted. On the other side are donors who have become increasingly frustrated with the organizations they support which either cannot or will not tell them, in measurable terms, how their gifts are being used. (“Lack of measurable results on their gifts at work” is the number one cause of donor attrition.¹) Caught in the middle are fundraisers who have not been very successful at getting their bosses to understand that only through restricted giving — ie, by assigning gifts, whatever their value, to specific programs and services — can the evidence be generated that will satisfy donors and ensure their ongoing loyalty.
Currently, giving is down and no one knows when or where it will bottom out.² The seriousness of this situation may finally make not for profit leaders open to considering alternative approaches for minimizing loss of revenue. Fundraisers, therefore, have an unprecedented opportunity to put their donors’ simple and utterly justified requirements for continuing loyalty back on the table. Your donors’ bottom line is:
- being acknowledged promptly and in a meaningful way whenever they give (see previous blog – Reach out to your donors)
- receiving measurable results on their gifts at work before being asked to give again
Not for profits can’t provide donors with evidence of measurable results unless their gifts have been assigned to specific programs or services. Unrestricted giving leaves fundraisers with nothing to say to their donors except, “We’re still here and I hope you’ll give again.” This simply won’t cut it right now.
Giving trends over the last five years were already showing a decline in acquisition, renewal, and the reactivation of lapsed donors before the economy went south. You may be worrying that donors will use economic uncertainty as the reason to drop certain charities for good. Don’t make it easy for them to put your not for profit on their “optional” list.
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¹ As supported by national research by Cygnus on the causes of donor attrition which discovered that “failing to receive measurable results before being asked for another gift” (46%) and over-solicitation (41%) are the top two reasons why donors stop giving to specific causes. [published in Donor-Centered Fundraising, 2003]
² Though Cygnus will be conducting a national survey in January to elicit donors’ views on their philanthropy during this economic turmoil.
It is understandable that donors would change their giving patterns due to COVID-19 in favor of causes that are related to the pandemic. With the sudden rise in unemployment, food insecurity in the U.S. is said to be historically high. I know in my own family we have shifted our giving from international causes to local food banks because we want to help people who have been directly affected by the pandemic. It is also understandable that donors would want to know the impact of their gifts. It does not seem that it would be prohibitively difficult to explain the organization’s monthly or quarterly mission accomplishments when asking for repeat donations. Is it not a routine management function to measure the organization’s mission accomplishment? in the absence of restricted giving, does it suffice to simply explain the impact of donations on the organizational mission since the last time they were asked to give? What proportion of donations should be restricted vs unrestricted?
In a preliminary inquiry with our test group of donors, we found that the majority who were continuing to give were sticking to their pre-COVID giving strategy. But your own experience of adjusting giving in order to direct contributions to organizations on the front lines, such as food banks, is also reflected in a portion of the test donor group. In reference to your inquiry about restricted versus unrestricted giving, I only wish that more not-for-profits measured the impact of their programs and services and, consequently, donors’ contributions that make delivering those programs possible. The overall mission of a cause is not, in itself, a measurable thing, but the programs and services that bring that mission to life can and should be measured. Over our 20+ years of research, donors have become increasingly unwilling to remain loyal and give generously to causes that are non-specific about how funds are used and what is achieved. For more information on the important topic of restricted versus unrestricted fundraising, please see Chapter 8 of Donor-Centered Fundraising, second edition.