The pundits are beginning to use the dreaded “R” word—recession. If you haven’t started thinking about how your organization will weather the next recession, now is the time.
The last recession, dubbed the Great Recession, officially began in December 2007 and ended in June 2009. But nonprofit organizations continued to feel the effects for years afterward. Here are three ways to begin preparing now:
1. Anticipate increased need for your services.
When people are struggling financially, they turn to our nonprofit sector for help.
In 2011, the Nonprofit Finance Fundsurveyed 1,935 U.S. nonprofits. Most of the organizations saw an increased demand for their services in 2008, 2009, and 2010—with 77% reporting an increased demand by 2010. Throughout the recession, organizations reported being unable to keep up with growing need.
Especially if you’re a direct service organization, your community is counting on you—and they’ll turn to you even more during a financial crisis. Begin planning now for a spike in demand. How will you increase your staff or volunteer capacity to accommodate more clients? What financial resources and reserves are available? Are there other organizations you can partner with to scale up during a crisis?
- Fight for continued investment in fundraising.
Having to cut budgets and reduce program expenses is always painful. During the last recession, many groups made across the board cuts to all parts of the budget—including fundraising expenses.
That’s the wrong approach. Spending less on fundraising precisely when fundraising just got a whole lot harder is misguided. It creates a downward spiral that ultimately creates even more of a crisis and further cuts to your programmatic work.
As our friend Mal Warwick said in an excellent piece in the Stanford Social Innovation Review, “If the choice arises between cutting back slightly on programs or slashing the fundraising budget, you may shoot yourself in the foot if you opt for the latter. It doesn’t take long to destroy an effective fundraising operation— and then where will your programs be?”
Fight for your fundraising dollars. As a development professional, you provide the fuel that makes your entire organization work. And an investment in your efforts pays dividends for everyone.
- Don’t lose sight of how generous your donors are.
We all know that philanthropic giving took a big hit during the last recession. According to a study out of Stanford:
“Total giving in 2008 fell by 7 percent in inflation-adjusted dollars, from $326.6 billion to $303.8 billion. In 2009, matters worsened, with charitable giving dropping another 6.2 percent to approximately $284.9 billion.”
Ouch. But here’s the other part of the story: when the recession hit, everyday donors saved the day. Even as Americans tightened their belts financially, most kept giving to help others and some gave more. That same Stanford study reported that giving to food banks in 40 cities rose by 31.9% from 2008 to 2009.”
So, when recession hits, remember how generous your donors are. Reach out to major donors with specific requests to help you close gaps; add an additional appeal and tell donors you need them to dig deep in hard times. This is the precisely the reason you have donors. They will be there for you when you need them. Don’t be afraid to ask them to do more.
We’d love to hear from you about how your organization weathered the last recession. Just drop us a line, or post in the comments below.
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