Sunday, March 08, 2009

This Tough Economy Is Not Lost On Donors And A Real World Fundraising Boon In This Economy For Us All

In our previous post, Think About Applying For Grants From the Grant Donor's Perspective we recommended looking at the grant raising process from the grant donor's perspective to package a better grant proposal. In this post we recommend seeing the nonprofit philanthropic sector, as a whole, to help understand how donors are in the same boat as nonprofits that are fundraising. We are not so different from one another.

The number one factor in improving our economy is to increase Americans' confidence. Editorials, this week, pundits on news talk shows, and economists have repeated the word "confidence".

When the economy began to slow, more visibly in fall 2008, foundations began to answer questions (all of the country and in all kinds of media and press) about whether they will reduce their recent giving levels. Some foundations answered the question confidently then, stating something like 'we will fulfill our giving goals for 2009', but would answer it differently now for different reasons (e.g. investment scams such as Ponzi schemes, loss of assets in the market, a breakdown in its leadership's confidence, or worse). Then, there are the rest of grant donors, such as foundations...

Foundations, who choose to be involved in the community working on the issue that they care about (not as nonprofits serving or providing services but, rather) to be a part of the solution, as the donor. Philanthropy is a team of nonprofits and donors (of all kinds, including grant donors) and that team works together to serve the community.

Those foundations (or governments, or other grant donors) are often experts in the issues or causes that they donate to serve. They are in touch with the news, like you and I are, and are keenly aware that the economic downturn, and our federal government's difficulty in figuring out a recovery plan, is taking now, and will take later resources that could have gone into the federal budget to better fund basic services and programs that meet needs in our community. Foundations do not balk at these kinds of economic downturns out of spite or fear. In fact, keep in mind, the federal government requires that foundations (in order to retain their official nonprofit designation) must donate a minimum five percent of their total assets, each year. Foundations may choose to donate more than 5% of their total assets but the point is that leaves, 95% of their assets to be used as the foundation sees fit. Some of these organizations, who are in touch with their causes - the unprecedented current need, and the economy, will and already have increased their planned donating for 2009.

In the United States, since the 1940's, when reductions to the federal budget potentially lessened services and programs in American community, the donors in this country (including grant donors) remained sensitive to holes stepped up (especially after 9/11). Many foundations are, by choice, consciously getting into this position again. Donors (including grant donors) do not want the nonprofits who they believe are providing real solutions for pressing issues to disappear. Bottom line...foundations (and all donors) are concerned for our communities. No donor or nonprofit wants to leave any unmet need in our communities to their own devices.

As nonprofit volunteers, staff, and leadership - we are wise to be sensitive to the position that donors are in, in this economy. Donors and nonprofits are a team and if we can see from the donor's perspective where they are today, it can allow us nonprofits to strategize how to better approach potential donors, with our requests, now. It can help us nonprofits to research these potential donors given our economy, now (e.g. perhaps instead of prospecting potential grant donors, as we all have been for years, in order to anticipate their interest in your organization's grant application on last year's giving - but instead, call their offices today and ask their program manager where they are, what they are looking for today, and what they expect to give to, now).

I will finish this post with one last very recent nonprofit fundraising experience (that I posted in our new forum about last week) that is extremely insightful for any of us raising funds, today.

A colleague worked on a nice auction dinner event, two weeks ago, that this nonprofit held annually for years. It is usually a fancy evening out, and most auction items were higher priced. In years past, the event always sold out, and all auction items were always sold at much higher price points than their common value. She said that this year, the event sold out, but it was held at a less fancy restaurant; there were less auction items, but many more silent auction items; and auction items this year were not fancy and expensive items but rather they were nice but more accessible items (e.g. $20 gift certificates, $30 hair cuts, etc.). She said that because the entire event was held to be much more accessible (fiscally, socially, and in the end...psychologically) they made $20,000 more this year (in this event) than they have ever made on this event.

We can raise money this year, and more than we did last year - we must, as nonprofit leaders, think and do our work differently than we have been. Times are changed but we can change, and adapt, too.

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