The following articles, written by Sean Triner, Co-founder and Director of Pareto Fundraising and Pareto Phone were originally published in The Agitator column of Fundraising and Philanthropy Magazine’s e-newsletter.
Surviving and even thriving in tough times is not impossible provided you’re armed with the right insights and strategy. In an extract from a white paper entitled “Ten steps to managing fundraising in a recession,” Sean Triner reviews some of the tactics that charities can implement.
Bequests
Bequest income fluctuates a lot across the sector and is heavily influenced by many factors. Many charities receive bequests in shares, but often the most valuable asset in an estate is property. Shares are being hammered – so the value of bequests will take somewhat of a blow, but house prices in Australia have not decreased as dramatically, possibly cushioning the effect for charities.
In terms of planning your future income, keep an eye on your local house prices. Also, try to encourage bequestors to nominate a percentage of their estate, as opposed to a fixed amount. This way you stand to benefit more in the likely event that the estate will appreciate in value by the time the bequest is redeemed.
Those charities that invested in bequests over the past five years or so will see continued growth in their bequest income.
Major gifts
The group least likely to be affected by a recession is also the group least effectively targeted by most charities.
If you have no major gift program, or your program has not generated any income for the last six months, or your major gift fundraiser has not made a direct ask in the past six months, then it is time to ask your best donors for help, right now.
Regular giving
A review of the charities involved in our benchmarking project shows that so far, the recent harder economic times have not had an impact on regular giving donations.
A good place to look at historical indicators is the British experience. They have been market leaders in regular giving for nearly two decades now and have lived through a couple of recessions already.
The British experience during previous recessions was a slight decline in growth rather than a decline in real income. This is promising but we must not be complacent – those recessions also coincided with massive investment, growth and creativity in the area of regular giving, making it impossible to tell whether the underlying trend was negative. If it was, it proves that charities can “pay” their way out of trouble – i.e. recruit more donors to negate the impact of those that are lost through increased attrition.
Events
Corporate fundraising is an area that has already declined over the past few months. If you are one of the rare charities that makes considerable net income from events, then be prepared to spend a little more to protect them – your cost per acquisition may well increase but don’t drop your successful events in fear of the recession.
Corporate giving
Decreasing giving to charity is high on the list of cost cutting measures for companies feeling the squeeze – and this is borne out in our research, which shows a decline in corporate giving this year for the 23 Australian/ New Zealand charities in the benchmarking program.
10 tips to recession-proof your fundraising
- Concentrate on net income rather than cost of fundraising (COF) or return on investment (ROI) as a key measure.
- Work like a commercial organisation; accept reduced short-term growth in service expenditure to gain increased long-term growth.
- Don’t put off bequest marketing – it won’t make any difference to your income next year, but the charities that invested in bequest marketing during or after the last recession are in a lot healthier situation than those that didn’t.
- Accept that donors are not cheap.
- Look at where your money really comes from now, and concentrate efforts on high yield activities like regular giving, bequests and major donors.
- Look at where growth is coming from for successful charities, and ensure you are getting your slice.
- Implement proper, well thought-out and planned “supporter relationship management”.
- Ensure you are using the right tactics for fundraising – number of mailings, rigorous targeting, personalisation, length of letters, actually asking for money in your appeals, telephoning to upgrade regular givers.
- Regular givers are still the best bet in most countries right now.
- Understand the implied lifetime value of regular givers – plan long term.
