Five Reasons Not to Panic
The looming recession might not be as bad for nonprofit fundraising as you think.
April 2008 By Willis Turner
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Recession is looming. Direct mail is dying. E-mail has fallen short of its bright promise. Donors are cynical. Contributions are drying up faster than the ice caps are melting. It seems like everywhere you turn these days, prophets of doom are predicting dark times ahead for fundraising.
If you’re not careful, you might almost start to believe that things aren’t going so well.
Maybe it’s time to take a deep breath. Yes, there is cause for concern. But there also are plenty of good reasons to hold on to your seat and ride out the storm. Here are five truths to help you keep your perspective, stay active, remain focused and even feel hopeful.
1. We’ve heard this story before.
Change is inevitable. So, apparently, is the doomsday prophesying that always seems to accompany it. Radio, it was once darkly predicted, was going to stop people from going to the movies. Television, said others, would be the death of radio.
Only a few years ago, people said the low cost of e-mail would put the final kibosh on direct mail. Others said TiVo would be the death of DRTV.
But in every case, the new technologies turn out — just like the old technologies — to each have their shares of strengths and weaknesses. And ultimately they find their places as valuable parts of an increasingly diverse fundraising process.
Today, for example, study after study is showing that direct mail still is a vital part of the fundraising mix. Those who thought e-mail was the new shining city on the hill are finding that direct-mail donors continue to respond and renew at higher rates.
Maybe more importantly, direct-mail donors are more likely to be “institutional supporters,” i.e., they’re more likely to support your cause and mission, rather than a single issue.
2. Bad times can bring good donors.
Investment advisers often encourage clients to keep investing during economic downturns by reminding them of the benefits of “dollar cost averaging.” In other words, if you regularly invest a consistent amount, your dollar is going to buy more shares when prices are down. Then when prices go up again, you have more shares, as well as shares that are more valuable.
Perhaps nonprofits can benefit from a similar “donor cost averaging.” After all, it’s only logical to assume that the donors you acquire in lean economic times are more likely to be: a) wealthier and more “recession proof,” and b) more emotionally wedded to your mission than impulse givers who make casual gifts to many organizations during good times. Either way, those donors who give in an uncertain economy seem considerably more likely to be long-term supporters with higher lifetime value.
If you’re not careful, you might almost start to believe that things aren’t going so well.
Maybe it’s time to take a deep breath. Yes, there is cause for concern. But there also are plenty of good reasons to hold on to your seat and ride out the storm. Here are five truths to help you keep your perspective, stay active, remain focused and even feel hopeful.
1. We’ve heard this story before.
Change is inevitable. So, apparently, is the doomsday prophesying that always seems to accompany it. Radio, it was once darkly predicted, was going to stop people from going to the movies. Television, said others, would be the death of radio.
Only a few years ago, people said the low cost of e-mail would put the final kibosh on direct mail. Others said TiVo would be the death of DRTV.
But in every case, the new technologies turn out — just like the old technologies — to each have their shares of strengths and weaknesses. And ultimately they find their places as valuable parts of an increasingly diverse fundraising process.
Today, for example, study after study is showing that direct mail still is a vital part of the fundraising mix. Those who thought e-mail was the new shining city on the hill are finding that direct-mail donors continue to respond and renew at higher rates.
Maybe more importantly, direct-mail donors are more likely to be “institutional supporters,” i.e., they’re more likely to support your cause and mission, rather than a single issue.
2. Bad times can bring good donors.
Investment advisers often encourage clients to keep investing during economic downturns by reminding them of the benefits of “dollar cost averaging.” In other words, if you regularly invest a consistent amount, your dollar is going to buy more shares when prices are down. Then when prices go up again, you have more shares, as well as shares that are more valuable.
Perhaps nonprofits can benefit from a similar “donor cost averaging.” After all, it’s only logical to assume that the donors you acquire in lean economic times are more likely to be: a) wealthier and more “recession proof,” and b) more emotionally wedded to your mission than impulse givers who make casual gifts to many organizations during good times. Either way, those donors who give in an uncertain economy seem considerably more likely to be long-term supporters with higher lifetime value.
Companies Mentioned:
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