The COVID-19 pandemic has added a new twist to an age-old question in fundraising: How to raise money during a recession.
Though attempting to raise funds in an era of social distancing creates unique challenges, recessions are nothing new and many organizations and political campaigns are able to bring in donations through smarter and more strategic decision making.
History Is On Your Side
Let’s start by getting one very important thing out of the way first: it is possible to fundraise during a recession and recent history proves it. In the year 2000, political campaigns nationwide raised roughly $700 million in donations, in 2002, despite the 9/11 attacks the previous year, donations were just shy of $800 million. Similarly, in 2008, political campaigns nationwide brought in over $1.1 trillion; when the Great Recession hit in 2009, donations did drop to just above $1 trillion but quickly rebounded in 2012 to $1.2 trillion.
The one critical thing to note is that recessions don’t always hit all people equally. This is especially true in the COVID-19 crisis. We know that young people, those on fixed incomes, and already vulnerable populations are likely to bear the brunt of this recession. While your likely mid-and high dollar donors will feel some impact, they are often still in a financial position to donate, but it’s going to be more competitive for their dollars.
What does all of this mean? It means that donor funds are still out there. Now, we aren’t going to lie and say it is going to be a cakewalk, but this fact means there is no reason to just throw up your hands and assume that you won’t be able to raise funds.
Fundraise Smarter (and Harder)
We have talked about the importance of understanding the donor triangle and the 80/20 principle before. To summarize, these two ideas say that roughly 80 percent of your donations are going to come from 20 percent of all people that donate to your campaign.
Well, there is a reason why we call it a principal and not a rule or law of fundraising. The 80/20 principle is what you can expect during average to good times. Now it may be a bold statement to make, but recessions are not “good times.” In fact, history suggests that most campaigns and non-profits will see an increase in their average donation size during recessions. This doesn’t mean people are giving more. In fact, just the opposite is true. During recessions, small and one-time donations are less frequent meaning you will need your mid-level and large dollar donors even more.
So, how do you adjust? Well, you are going to need to invest more time and energy into a few high-dollar donors to shore up your coffers compared to more stable times because, frankly, individuals who might consider giving $20-$100 during good times might cut those donations in half (if they give at all). Your ratio might need to change to a 90/10 model based on what your budgetary needs are and your ability to gain access to high-dollar donors.
Social Distancing Doesn’t Mean Being Socially Distant
Though the 2020 recession means many never-before-seen adjustments to our economic and social lives, one thing that is uniquely different in 2020 compared to 2001 or even 2009 is just how available technology is and how easy it is to connect with one another.
In 2001 the most popular phone was the Nokia 3210, which featured a monochrome screen, T9 keypad, a text-based web browser, oh, and Snake! In 2009 high-speed internet was a new technology for most American households (if they had it at all) and applications like FaceTime were still a year away. In 2020 the landscape has completely changed. We are all familiar with applications such as Zoom and Skype that allow us to have quality audio/visual web-based meetings.
Social distancing will become a part of our collective history, however, it is creating a new awareness around the ease of teleconferencing. Though physical face-to-face interactions will always be a preferred option, it is not hard to imagine a post-COVID world where digital face-to-face interactions will become socially acceptable for current taboos such as asking for donations.
It is also important that you continue to engage and touch your supporters. While social distancing makes it harder to meet people for coffee or lunch, many campaigns have found it easier to get in touch with donors while we are all cooped up in our homes - in general, people are available and looking for social contact, but it will be up to you to reach out and engage them.
Take advantage of this fact. During the time of social distancing, ask your potential donor if they are willing to hop on a video chat. Odds are good that they just want to see a new face and interact with someone new anyway. Once we can once again return to normalcy, still explore this option with a donor if they just can’t seem to find time to get a cup of coffee.
Lean Into Your Network and Do What Works
In the past we have talked about the importance of donor circles, and during recessions, these groups become more important than ever.
Now is not the time to be timid. If you don’t have a finance committee, create one; if you do, lean into them and make sure that they are leveraging every connection they have to help bring in extra donors.
During this same time, you are going to want to make sure that you are using outreach tactics that work.
As we said above, face-to-face is best but is very time-consuming; balance this with call time, mail and email, and social media to create a smart donor outreach program. Events are always a high risk and time consuming tactic, so right now is probably the time to focus on other areas. The extra effort you expend ensuring that you are using resources wisely at the start of your drive will pay for itself ten-fold as your donor campaign progresses.
Gratitude and Acknowledgement are More Important than Ever
Though expressing gratitude is always important, saying “thank you” during rough economic times is a necessity. During good times choosing to donate may be the difference between supporting your cause and a fancy dinner. During tough economic times, it can mean that people are sacrificing something as simple as a nice sandwich for a day because they believe in you. Always be sure you are making those thank-you calls and sending those personalized letters.
Prioritize Donor-centric Messaging (What You Say is as Important as How You Say It)
Don’t back off fundraising. Recognize you still need to fundraise and you still need resources to continue operating. However, don’t be cold and just ask for money. Be honest, offer hope, acknowledge that things are hard right now, provide a path, and make sure to always convey how an individual’s donation will help you or your organization be uniquely positioned to make things better. You may still have a hard time raising funds, but if your message pretends that a problem simply isn’t there, you will find that support and donations will be meager.
Message Impact: Leadership Matters
During times of economic and social crisis, people will instinctively gravitate towards certain characteristics and personalities in search for reassurance. As the saying goes “some leaders are born while others are made,” but, regardless of how leaders emerge, they will be found during troubled times. Yes, there are multiple paths to leadership, but one thing is for certain: people won’t follow you unless you give them a reason to.
So why all this grand talk about leadership in an article about raising money? Because your message to potential donors must reflect the fact that you are ready and willing to help guide people through rough waters.
Frame in terms of what you need
Be honest and straightforward in what you need and why you need it so people understand what you are going through and why you still need their support.
The coronavirus has demonstrated that more than ever, leadership matters. When there is a crisis -- and even when there is not -- it’s our elected officials who set policy and determine the fate of millions of people in the country.
We know that things may be a bit tighter for you right now, but whether it’s $5 or $500, your generous support will help us hit our end of quarter financial goals at this critical time for our community and country.
This spring and the global health crisis has stretched our budget and challenged our staff even further. We are rising to the occasion, but I know we’re going to need the help of our longest and most committed donors to make it through what’s next to come.
What can you do today?
You still may be unsure of where to start. Or maybe you are still hesitant to fundraise. Here are some things you can start doing right now to get yourself on track and keep moving forward.
Build your List
Sit down with your finance committee, board of directors, etc… and build your fundraising list. Think about current donors and other people you can reach out to. Need ideas? Check out this list here.
Fill in Missing Data
Find missing phone numbers, emails, update addresses, and make sure your information is current while you may have some down time or you are more hesitant to fundraise. Now is the time to get yourself organized.
Set up your infrastructure and get a CRM
This may be a little self serving, but at FundHero, we know the importance of a good CRM and maintaining communication and relationships with donors. Finding a CRM and getting set up in one will help you accept donations online and stay up to date with all your contacts. Ultimately it will help you maintain relationships, stay organized, and stay up to donate. (Why do you need a CRM? Learn Here.)
Leverage Digital Tools and Unique Engagement Opportunities
- Set up one-on-one Zoom meetings. People still want social interactions and want to connect. Focus on your top 20% of donors and reach out.
- Organize group calls. People want to hear what’s going on and they want information. Share what’s going on in your organization and how you are responding to the current situation.
- Conduct campaign events on social media “Ask me Anything” or set up Facebook live events. Ask your community how people are responding, how they are working to move forward, and how they are handling everything that is going on.
- Send regular email updates and information - don’t go dark. Keep communicating and let people know what you’re doing, even if they aren’t direct fundraising asks. Once you stop communicating people begin forgetting about you.
Set Goals. Stay Optimistic. Keep Going.
- Set daily and weekly outreach goals.
- Remember life will return to normal.
- For political candidates, elections are still happening in November. For nonprofits, your cause still matters and communities still need your impact.
This post was written at a time when there were still a great many unknowns about the long-term ramifications of the COVID-19 pandemic and the predicted economic downturn to come. It is with that in mind that we say that elected officials and organizations are in a unique position to shape the future before and after the world stabilizes. The work you do now can have a great impact on what that newly stabilized world looks like - and you need to act like you know this fact when trying to gain support.