Donors Are More Important than Your Clients, Issue or Cause!
Donors Are More Important than Your Clients, Issue or Cause is fundraising veteran Joanne Oppelt’s take on how to engage donors when combating the loss of government funding. Here’s what she has to share:
There is nothing new under the sun. That axiom is certainly true regarding the current cuts in government funding. While we may not have seen such radical change in government programs over such a short period of time before, the funding disruption it has heralded is nothing new. We have been here before. It behooves us to learn from history.
Nonprofits have been dealing with government funding uncertainly for a long time. This year’s federal budget cuts are not the largest we’ve ever seen. They are rivaled by those in 1990 and 2011. We’ve dealt with recessions every five to ten years or so for fifty years. (Recessions happened in 1973-1975, 1980, 1981-1982, 1990-1991, 2001, 2007-2009, and 2020.) No money was available during the twenty-one-day government shutdown in 1995-1996, the sixteen-day one in 2013, and the thirty-five-day one in 2018-2019.
So, what have we learned?
Donors Are More Important than Clients
We have learned that the nonprofits that survive crises and thrive afterward prioritize financial capacity building, that is, fundraising. They have a clear purpose and can articulate their value to not their client communities, but their donor communities. They invest in resource acquisition amidst program cuts. They continue to serve their donors even when they must cut their client loads. They know that without money, there is no mission.
Donors are paramount. You may be thinking that people are more important than money. They are. Money is a tool to acquire the resources you need to serve people. It is necessary. Without money, you serve no one. Where does that leave your mission?
Ted fought to keep his youth and family counseling agency going when his governmental funding was cut. The effect was devastating. Employees were laid off. The remaining staff became overwhelmed, and the quality of their work suffered. Some, daunted by the workload, left, resulting in an even smaller staff. Because of a lack of staff, appointments were harder to get and inconvenient for families to schedule. Soon, clients went elsewhere for services, and earned income declined.
With government contracts and earned income decreasing, Ted worked hard to keep his nonprofit alive. The organization’s services were needed now more than ever. Families were hurting. He put as many resources as he could into serving his clients and laid off staff not directly involved with programs, including his development director.
Ted was frustrated with the reduced income streams. However, he was proud that his agency still offered the most troubled youth in his community the mental health support they needed. He was serving those who had nowhere else to go.
Over time, the government funding cuts were partially rescinded but never returned to their previous levels. Earned income continued to decrease. Philanthropic dollars trickled in at a fraction of what they had been before. The board called an emergency meeting to discuss the viability of the organization.
Sound familiar? That happened in 2015, ten years ago. Like I said, we’ve been here before.
Donors Are More Important than Mission
Ted did what most nonprofit leaders do—invest in continued client services. He built program capacity instead of fundraising capacity. He ended up not having the finances to continue his important mission. In fact, Ted was eventually fired. Today, the organization is an inkling of what it was then.
What would have happened if Ted had invested in his donors instead? Government funding would have still decreased. Service cuts would still be necessary. Staff layoffs would still occur. Earned income would still diminish.
However, a core development staff would remain. Philanthropic dollars would not have dried up. The nonprofit would have money to rebuild once the funding crisis ended. The counseling agency would be serving far more youths and families than they currently are.
If you want to survive a funding crisis like the one you face right now, you must prioritize meeting the needs of your donors above meeting the needs of your clients. You need money to maintain even a small cadre of services and restore your organization after the emergency runs its course.
Yes, you may downsize. Yes, it may be drastic. Yes, it will be painful. Yes, people will go without services. Yes, it won’t feel good. Yes, you will lament what’s going on and advocate for better times. Don’t get stuck there, though. Be pragmatic. Do something about it.
Donors Invest in Great Dreams Backed by Sound Plans
Funding downturns are a predictable part of life. Don’t expect donors to give to you because you have a good cause and need money. All nonprofits have good causes and need money. Donors will invest in your efforts only if they believe they can impact a problem they care about through your organization and have the means to do so. They also want to see the results of their donations.
So, what can you do?
– Plan for difficult times. Build up reserves. Save for a rainy day. Prepare to weather the storms that inevitably come. Ensure you can continue your important work and grow.
– Invest in fundraising. Prioritize money over mission.
– Raise money as efficiently as you can. Eighty percent of the U.S. charitable dollar is from individuals. About 10 percent of your donors make up 90 percent of your donors. Strengthen your relationships with them. The return on investment for major gifts is far higher than any other fundraising method.
– Determine how much it costs to completely solve the issue you address, not just service it. Back it up with realistic action steps. Memorialize it in an attractive document. Share it with your donors. Compel them to give.
– Know where every dollar in your community resides. Identify the people who can fund your great dream and invite them to be part of your nonprofit family. Treat them like the heroes that are.
– People give significant gifts in the context of trusting relationships. Build those relationships with forethought and intention. When you meet with a donor, deepen your bond and always confirm next steps.
– Ask for everything you need all at once: money for operations, expansion, equipment, facilities, and endowment. Ask people with the means to make a significant gift to make a significant impact. Move away from nickel and diming your donors.
– Tell the world what your donors made possible. Celebrate your success. Invest in the growth of your programs while building up more financial capacity. Make a substantial impact. Then start the process all over again.
The strategy I just described is encapsulated in the Major Gifts Ramp-Up book and two-day conferences. I invite you to explore in more detail what you must do to survive a funding crisis. For more information, go to https://majorgiftsrampup.com
Take heart, government funding disruptions are nothing new. As an industry, we have been here before and will be again. Learn from history. Do what you must do to survive. Prioritize your donors. Invest in fundraising above maintaining client levels. Build up financial capacity. Rebuild when the crisis ends. End up serving your community like never before.
Joanne Oppelt is a member of the National Association of Nonprofit Organizations and Executives (NANOE), a faculty member at the National Development Institute, and a Major Gifts Ramp-Up counselor with Development Systems International. She also the author of the new book MAJOR GIFTS RAMP-UP. She’s spent over thirty years in the nonprofit sector, helping nonprofits of all sizes. She has worked across multiple areas, including affordable housing, the arts, child welfare, disabilities, early childhood education, maternal and child health, mental health, at-risk youth, and more. She has trained thousands of fundraisers and authored, co-authored, or edited more than twenty books on fundraising and nonprofit development. Joanne’s extensive background with a wide variety of 501(c)(3)s has given her a specialized insight into understanding the challenges nonprofits face. Her years of working in the nonprofit sector have given her the gift of knowing exactly what it takes to run successful fundraising campaigns completed on time, under budget, and over goal. Joanne holds a B.A. in education from Bethany University and a master’s in health administration from Wilkes University. She is privileged to help charitable organizations significantly impact the world.
