Recession suicide and the ten point plan to avoid it

Much is being written, and speculated about the potential impact of the economic downturn on fundraising. But what is going to happen?

Well, the most dangerous thing about this time is the decisions made by charities. Whatever happens, us fundraisers need to help our boards and management making the possibly fatal mistake of cutting fundraising expenditure.

I just wrote down a collection of thoughts and information from researching our data sources and what other ‘experts’ are saying about the recession. By the time I finished it was 9,000 words long, with a ton of data and proof but basically it boiled down to one thing:

Don’t commit recession suicide.

Whether donations (responses and/or average gifts) go up, down or stay the same the tactical decisions taken by charities will have more influence on the fortunes of the charity than a recession.

If things get worse, you need to spend more to make the same net and net is the key to delivering services. If things get better because of a recession (which is unlikely) it is a great time to spend more money and get great results.

If things stay the same, then keep things the same. Here is my ten point plan for coping with the recession:

The board and management need to understand the data and stop unrealistic expectations

1. Stop using cost of fundraising (COF) as a key measure and concentrate on net income
2. Work like a business, accept reduced short-term growth in service expenditure to gain increased long-term growth. Don’t commit recession suicide.
3. Stop putting off bequest (legacy) marketing every year – it won’t make any difference to your income next year, but the charities who invested in bequest marketing during or after the last recession are in a lot healthier situation than those who didn’t
4. Accept that donors are not cheap

Apply the Pareto principle internally and externally
5. Look at where your money really comes from now, and concentrate efforts on high yield activities like bequests and major donors
6. Look at where growth is coming from for successful charities, and ensure you are getting your slice Look after your donors
7. Implement proper, well thought out and planned ‘supporter relationship management’ – just think if you had implemented Relationship Fundraising back when the book was written, your donors would be much more likely to stay with you now.
8. Ensure you are using the right tactics for fundraising – number of mailings, personalisation, length of letters, actually asking for money in your appeals, telephoning to upgrade regular givers; any of these things not done right will cost you much, much more than any impact of a recession.

Get more donors
9. Regular givers are still the best bet in most countries right now; they are expensive and it may take you two years to recover costs but, guess what; that is life in fundraising
10. Understand the implied life time value of such donors – plan long term

Oh, if you are a glutton for punishment and want all the 9,000 words, charts and tables which you can nick stuff from to impress your board then just sign up here and we will get it to you this week.