Uncertainty and bad economies, create unique challenges, but they also offer opportunities. In a bad economy, donors may initially pull back on spending and giving. In times of uncertainty, they may not want to make long-term commitments or they may request longer-than-usual pledge periods.
This doesn’t mean nonprofits should expect to receive less funding. It just means you need to make adjustments. Here are some strategies for navigating philanthropy during tough times:
Even if you have a strategic communication plan in place, become even more transparent with your donors. Provide information on your endowment’s performance. Pro-actively share annual reports, quarterly statements and other financial updates, so donors are reassured that you are approaching the future with your eyes wide open and both hands on the wheel.
Review Endowment Investments
Endowments are designed to provide long-term support. When times are tough, nonprofits with endowments look even better. It shows they were planning ahead for the inevitable. Ensure your endowment investments are diversified and well managed; then, share that information with your donors. Remind them that, even with short-term fluctuations in the market, your long-term position is secure.
Reevaluate the Budget
Don’t wait until there’s a gap between income and expenses to try to backfill the hole. Review both sides of the ledger in collaboration with your team: 1) What we anticipate coming in over the next six months to a year; and 2) What we have budgeted to spend over that same time period. Communicate with your team, listen and establish shared priorities to build trust and confidence among your staff, volunteers and donors.
When times are tough, demonstrate that you are strong and steady. Especially during uncertain and tough economic times, commit to increased transparency, communication and collaboration and make sure your constituency knows you planned ahead.