When the going gets tough, the leaders step up. Here’s how to lead your nonprofit through a recession or other “bad times.”
Many nonprofit leaders remember the 2008 recession with undesirable clarity. I know I do. I was new to fundraising with only a few years of experience. It was a nerve-racking experience and difficult to navigate. Our leadership heroically took pay cuts larger and earlier than other staff, and we came out of the recession stronger than ever—and poised to grow.
Bad times are difficult. But that doesn’t mean they have to be bad for your future. Many organizations and companies even grow during difficult times. How? They do this by being prepared for difficulty and by making wise choices.
Managers should start preparing for bad times before they arrive. Here are a few ways that you can help lead your organization through the difficult times that (may) lie ahead.
LEADING THROUGH BAD TIMES
First, leaders should begin strategic planning for how their organizational priorities and services may change during a recession. You can’t stop fundraising and you can’t stop running programs, so having a plan will allow you to strengthen the case you share with donors. You’ll be able to tell them why their support matters more than ever. If you find yourself behind the eight-ball, so to speak, it’s never too late to put together a plan.
Second, leaders should increase their knowledge of their donors. In 2008 donors didn’t cut their giving equally across the board. Most continued to support the causes they were closest to and cut their giving to their “fifth favorite” charity. Now is the time to survey your donors and ask them where you fall in their giving priorities and how your mission might move up to their top tier. Remember the old adage: stay near, dear, and clear with your donors.
Third, at the start of difficult times, leaders should look to where they can conserve cash. However, many make the error of cutting entire programs—or worse, shutting down the fundraising department. As Mal Warwick says, it is better to use a scalpel than an axe. Can you cut back on the least productive segments of your direct mail? Can you use two-color mailings rather than four-color? Can major gift officers stay in less expensive lodging? When cash is tight—or even uncertain—you need to be cautious, to be sure; but don’t wield an axe when a scalpel will do.
Fourth, and most importantly, invest in relationships. During the 2008 crisis, a donor to another charity publicly lost a significant amount of her wealth. The charity didn’t visit her for 18 months because they didn’t want her to feel pressure to give or “make things awkward for her.” After the recession, the donor made back her fortune and more, and she said that those organizations that didn’t visit with her when she didn’t have money didn’t need to bother visiting her now that she had it. She would invest her philanthropic dollars with organizations who cared for her.
LOOKING TO THE FUTURE
Communicating in visits and the mail should be the most protected areas of your budget. Without them, you may limp through bad times, but you will come out weaker than ever. On the flip side, those who communicate more and grow closer to their donors can come out with a greater market share and a greater portion of their donors’ hearts.
Finally, difficult times could be the ideal time to implement new efforts you’ve been desiring but couldn’t get the drive to implement. Start real moves-management. Track major donor activity. Create reports that analyze the most important segments of your database. Many changes don’t cost money, but they do need a catalyst. Let difficult times be the catalyst you need to drive the change you know you need. With them you may find that you come out of bad times stronger than ever.