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Stern Bears and the effect on fundraising
Submitted by johnbaguley on 24 March, 2008 - 21:51.
Having survived more than one recession as an anxious director of fundraising and as a confident consultant, I was tempted to ignore the likely consequences of the recent financial shenanigans. Usually the professional classes keep their jobs and salaries, if anything they may even feel more like helping the less fortunate in times of need, and only those actually laid off really stop giving (yes, I’ve done the research). This time there are two scenarios in play out there that make me hesitate.
My apprehension was aroused by the absence of several ‘definites’ at a recent major donor reception for fat cats I helped organise. Unsurprisingly, the really rich now represent a much higher proportion of charities income, and expectations for 2008, than ever before. Reeling from the downturn in direct mail etc charities have moved heavily and successfully into major donor fundraising. Now enjoying the opening nights, receptions, drinks and canapés lifestyle we may not have noticed that our intended victims (sorry - friends to be) were glued to their screens as their bonuses liquefied before their eyes. Fundraising from those used to trousering huge wads of extra cash each year, is not that difficult; but when the pockets are empty, and uncertainty over their future contents stalks the land, fundraising may revert to being a tough call.
Secondly interest rates, that are we hope being held down, may rise and strip away a significant amount of the giving class’s disposable income. That could really begin to bite on our revenue income.
So, am I bothered? Well, just enough to check your thoughts on the matter…
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Weathering the Storms
I can't claim to have done Proper Research, like John, but if it comes, this will be my third recession as a fundraiser, and the experience has certainly been that, as the economy takes a dive, the Typical Donor digs deeper to support the causes s/he cares about.
Indeed, the time to be really watchful was at the end of previous recessions - there was a feeling of relief - we've helped you through the worst, so you'll be OK, now, won't you???
I think the successful charity which survives the next couple of years (if the doom-mongers are right, but that's another discussion!!!) will have a broad base to its fundraising. What is more, I think it will have maintained it's activity in the unfashionable but traditional areas of fundraising. F-2-F, DRTV and high-profile Big Gift campaigns are all very well, but we can't all do 'em, we shouldn't all do 'em, and lots of small donations are more sustainable than a few really big ones.
Coffee Mornings are like National Savings - they're not exciting, but they bring reliable returns in uncertain times.
Cheers
Gerry
Gerry Beldon FInstF
Director, 26-01 CIC
www.26-01.com
Bothered but not (yet) bewildered
I too have been wondering what charities should be doing to weather the possible recession. I'm sanguine enough to recall that most charities survived previous troughs in the economic cycle, however hard the competition for donors and repeat gifts got.
What should charities be doing now? Or is it too late to make any changes that will have any impact before the recession hits?
A few basic thoughts:
* hang on to your good fundraisers. Now is not the time to lose some of your organisation's most precious assets. You don't want to be recruiting and waiting six months or more for a fundraiser to get to grips with your organisation's fundraising.
* legacy income is unlikely to be affected by a recession insofar as legacies already pledged should continue to be received. House values might drop, reducing the value of many legacies, but the gifts will still be there.
* grantmaking trusts are likely to have poorer returns from their investments, meaning they'll have less to give away as grants. Now is not the time to be wholly reliant on grants.
* cutting costs in fundraising: apart from staff, where is the biggest expenditure in your organisation? Alternatively, what fundraising can achieve the biggest effect? Maybe now is the time to focus on improving your Gift Aid conversion rate with a reminder to any donors who have not signed a Gift Aid declaration to do so promptly. Equally, any appeal that asks for regular gifts should probably be made sooner rather than later this year.
Nothing novel there of course. Does anyone have anything more practical to suggest on weathering the possible recession?