Raising Money in the Downturn

By Nell Edgington

I attended the Greenlights for Nonprofit Success Town Hall Meeting today about the economic downturn and what it means for Austin’s nonprofit community.  It was very interesting.

Economist John Hockenyos gave a great overview of where we are currently with the financial markets and what the implications for the nonprofit sector are.  Basically, he said our economy has been dealt a significant blow, and the good news is that we’re still standing, but the bad news is it’s going to be rough for the next 18 months or so.  James Landrum of Comerica Bank talked about the importance of communicating with your financial institutions during this time and exploring your options.  Jackie Mata of the KDK-Harman Foundation gave a great explanation of how the downturn in the markets might affect foundations’ ability to maintain their giving level over the next couple of years. However, the good news is that her informal survey of Central Texas foundations found that the majority are planning to maintain their dollars or even increase them over the next year, regardless of the market downturn.  Finally, PeopleFund executive director Margo Weisz talked about creative ways of tapping into your donor base and further engaging and investing them.  She gave a great example of how she has brought together a small group of funders and potential funders who have an expertise in a new financial vehicle they want to introduce.  By getting this group engaged and invested in a new project, she hopes to get them financially invested as well.

There were many implications for the nonprofit sector, chief among them for me, and what I strongly believe, is that you can’t stop investing in your organization even if the economy is bleak.  Yes, you need to tighten expenses, yes raises might have to be lower or nonexistent, and yes open positions may have to stay open for awhile, but don’t cut back on your revenue-generating activities.  In fact, there is a great short article in the Stanford Social Innovation Review that makes the very same point, “Warren Buffett’s Fundraising Advice,” which argues that we need to use Warren Buffett’s approach to investing in our fundraising activity.  Now is the time to strengthen our relationships with our closest donors, get to know them and their interests, make our case for support even more strongly.  In fact, recessions can sometimes be very good for  business.  There is less competition, fewer distractions and the businesses that survive come out leaner and meaner on the other side.

Always the optimist, I really believe that the downturn can hold great opportunity for the social sector.  Not just for fundraisers, but for organizations and the sector overall.  I’ve written about this here and here.

Out of adversity comes innovation.  These are exciting times.

Related posts:

1. Discussing the Downturn
2. Raising Money to Grow On: Putting the Strategic Plan in Place
3. A Case Study in Raising Money to Grow On
4. Raising Money to Grow On: Creating The Plan
5. In the Trenches Raising Growth Capital: An Interview with Anna Land

Tags: Fundraising, Nonprofits

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