Nonprofit Success in Uncertain Times

The events of September 11, 2001, met with a troubled U.S. economy, set in motion dire consequences that continue to distress nonprofit operations today. Slashed budgets and staff reductions are now commonplace in the philanthropic community. Money concerns lead to organizational stress and a focus away from the mission to the work of surviving. Foundations have seen their endowments dwindle since the terrorist attacks. Fundraising events are attracting fewer attendees and cash-strapped agencies are dropping programs. The bottom line is donors—corporate, foundation and individual—have emptied their pockets and cannot make as many commitments as they have in the past.

“There are so many charities, some 750,000 now competing for a smaller pool of money,” says Michael Nielsen, public affairs director of the Alexandria, Virginia-based Association of Fundraising Professionals. “We are seeing a great deal of donor fatigue.”

It is during uncertain economic times, however, when fundraisers have a prime opportunity to reevaluate strategies, think outside the box, and build relationships that lead to a steady stream of giving. All is not lost, says Nielsen, even with economic uncertainty. Donors may not give as much, but they do give. The key is to be innovative and prepared on the fundraising front. Many local CASA programs, for example, have fared well by maintaining their solid connections before and after the stock market plunged and by fostering friendship with potential donors who currently are unable to give financially.

“When we now approach potential corporate donors, we make sure they understand that we are not just looking for financial support,” says National CASA’s Chief Development Officer Bill Corwin. “We try to offer them low or no-cost ways to work with us. We’d like to have some benefit, financial or otherwise, as opposed to no benefit. The approach is, let’s build a relationship now and when the economy improves, we’ve got a base established. At that point, they will know what we do and will be more inclined to support us financially when they can.”

With fundraising, the challenge is the same for organizations large and small: prove your value and your ability to use a gift efficiently. Though larger organizations have dedicated fundraising professionals on staff to recruit donations, there are a number of equalizers for smaller organizations like local CASA programs. Fundraising professionals recommend several strategies including building alliances, leveraging computer technology and considering less conventional forms of nonprofit operations.

Strength in numbers

Because of the growing number of charities with similar missions, it makes sense for organizations, particularly smaller ones, to join forces to minimize program costs and maximize resources. Whether for a one-time campaign or for a long-term arrangement, coalitions provide great shelter during tough economic times. They can boost fundraising efforts, reduce marketing material costs, or provide greater reach of services in a given region. There are several models to follow including joint ventures (equal partnerships), umbrella organizations or mergers.

Experts suggest weighing the pros and cons. “Alliances are a real hot topic,” says Nielsen. “People are sharing central offices and making good use of each other’s resources. Never underestimate the power of the ego. Others have run into turf problems and questions of their autonomous survival.”

Fundraising Tech Talk

A Chronicle of Philanthropy survey shows that 126 charities raised more than $96 million online during the 2001 fiscal year. Although electronic giving more than doubled from 2000 to 2001 for nearly 40 percent of those surveyed, only 11 charities raised a mere 1 percent or more total revenue online. Nonprofit charities share both confidence and uncertainty as they look to online fundraising.

Although forecasts predicted Web-based donations would revolutionize fundraising, the crash of tech stocks cast doubt on its efficacy. While experts say Web-based giving is not ingrained in the donor psyche yet, technology may offer another avenue toward giving. For example, many organizations use donor e-mail lists to send organization notices. Focused and well written messages can share organization needs and direct users to online donation sites.

“Accepting donations online is great and I advise people to do it,” says Kim Klein, publisher of the Grassroots Fundraising Journal. “It sometimes takes a while for a website to be really used, and a lot depends on keeping the site interesting and driving traffic to it.”

As organizations consider the future, younger donors will likely donate online. Internet technology works to spur activism and cost-efficiently spread an organization’s message. The American Center for Law and Justice of Virginia Beach often sends e-mail alerts asking recipients to sign online petitions, contact their legislators or attend events. Few other methods can contend with the low overhead of Internet technology.

Outside the Box

Today’s economy demands creative fundraising plans, though not to the exclusion of the conventional methods. New Light Leadership Coalition, Inc., a Baltimore-based organization dedicated to empowering youths, for example, has experienced a drop in new membership and falling attendance at workshops; however, they have maintained a $50,000 annual budget by “continually applying for grants and foundation funds and embarking on a campaign for individual donations,” says Chief Financial Officer LaTashia C. Satterfield.

Similarly, the Alexandria, Virginia-based National Center for Missing and Exploited Children finds that despite name recognition, the organization must work harder to raise funds as it moves away from dependence on federal funds.

“We get 78 percent of our funding through government funding,” says Mary Vanderstelt, vice president of development. “We would like the ratio to be about 50-50, federal and independent grants, so we need to begin to do special events and work on our grassroots support to raise our visibility as a true nonprofit.”

Special events, networking opportunities, collaborative meetings engaging and using volunteers can also be used to engage prospective donors as they learn more about CASA’s mission. Many types of events can become fundraising opportunities. CASA program staff is often pleasantly surprised when events that are not necessarily intended for fundraising yield significant donations.

Nielsen says that development officers need to engage and inform their audience in new ways. Even if financially unable to donate, friends of the organization may feel they are contributing; when attuned to the organization and later the economy turns, this knowledge may lead to giving.

Some nonprofits develop business models to weather the economic storm. Increasingly, charities are building revenue streams to bring stability to their finances by developing, buying or selling products. The Children’s Art Project at the University of Texas MD Anderson Cancer Center in Houston, for example, is a nonprofit that operates like a business; the profits, however, are used to support children’s programming for young patients. Satterfield’s New Light Leadership Coalition develops workbooks and low-cost manuals for professional use and develops additional programs with the profits.

A volunteer base can be an asset as well because the funding source wants to be sure money is used efficiently. Corwin also notes, “A common feeling is that volunteers are doing enough and are giving of themselves, and you don’t want to put more on their shoulders. But nobody believes in the mission more than the volunteers. If they have confidence in your agency, more often than not they will give.”

In times of economic uncertainty, fundraisers may find resources right under their noses. During a bear market, creative fundraising efforts such as considering nonfinancial relationships and utilizing inexpensive technologies are key to keeping donors engaged. Fundraising efforts such as these enable nonprofits to focus their energy on the business at hand: their missions. After all, in times of economic hardships, the work of nonprofits is needed more than ever.

DeQuendre Bertrand is an award-winning journalist and freelance writer living in Mitchellville, MD. She is the former Managing Editor of Child Welfare Journal and holds a Master's Degree in Sociology from George Washington University.