The burdens of nonprofit stewardship became heavier during this era of financial austerity. Revenue streams are threatened. Demand for service is increasing. Nonprofit boards and executives face greater competition for resources, for volunteers and for market position.
Just as happens in the for-profit sector, the nation’s economic distress will cause some nonprofit managers and organizations to fail. In time we will see that others flourished because they instinctively bit the bullet, tightened-up their operation and abandoned soft practices that evolved during good times. They will do more than evaluate standard practices – they will declare the nonprofit equivalent of Total War. Understanding the stakes, astute nonprofit managers will aggressively focus on financial stability, on mission relevance, on enhanced marketing and on energized fundraising.
Here are some of the steps I believe they will take:
Confront Dysfunction: Many of this blog’s readers have at least one employee, one board member or one volunteer whose performance is inconsistent or even substandard.
In good times a nonprofit manager can choose to live with moderate dysfunction. No longer! In these stressful times, when teamwork and results are more important than ever, no one can be allowed to undermine morale and undercut productivity.
Start the year by sitting down with those who don’t meet your expectations. Have that conversation you have been avoiding. This step is an obligation of stewardship – an ethical responsibility of the nonprofit executive.
Update Marketing Messages: your organization, your supporters and your market inhabit the same societal and economic environment – an environment that has changed greatly in the last couple years. Perhaps you need a communications tune-up to make your messaging better reflect society’s current values and concerns.
Take an hour to review your standard marketing messages, positioning statement and perhaps even your mission statement. Tighten your messaging practices – frequency, content and delivery format. By updating your communications cornerstones you can clarify your mission, reassert your brand and protect your niche in the increasingly competitive nonprofit marketplace. (An aside: If you don’t have a graphic standards policy in place, better get on it. This is so important I posted about it earlier under this heading: Some Comments About Your Job Security.)
Tighten Focus: an organization’s activities can be ranked by priority. To relieve budget stress, examine the cost and benefits of those with lower relevance to your core mission. You may find some cost-centers to eliminate and others to downsize. That will access cash to reinvest in more critical activities or to cover an impending deficit.
Then it might be wise to further tighten your organization’s focus by establishing a process by which you can continually measure those higher priority activities that survive. Not only will that lead to better management, if another round of cuts becomes necessary you will have the data to guide future decisions.
Avoid the Down-Market Slide: during economic downturns wise managers cut back on many expenses. The trick is to decide where to cut. My advice – avoid cuts that might diminish your brand.
The traditional mistake is to think “We are a nonprofit, so we can’t afford to paint the office.” The better approach is to say to yourself “Specifically because we are a nonprofit, we must protect our mission by maintaining all aspects of our brand – including the condition of our office.”
Remember that nonprofits operate in a highly competitive marketplace. In that marketplace revenue is driven by affinity and credibility. Your supporters are motivated by an emotional connection. They want to be associated with and provide support to a winning organization.
So, don’t let your offices get scruffy, don’t cut back on your outreach programs, don’t let your colleagues publicly adopt a poor-mouth attitude. Avoid talking about how your organization suffers because of the economy. Many people and organizations are now suffering, so your own pain won’t sell nearly as well as your results will. The path to marketing and fundraising success is to keep your messaging realistically upbeat, focused on how much you accomplish despite the economic downturn.
Protect Credit: if you won’t be able to pay on time – postpone buying. Credit terms are a privilege. That privilege is granted to your organization by people and organizations that face the same financial climate and obligations that your nonprofit faces. Credit becomes precious and fragile in a down economy, and overdue payments lead to its termination. That puts a heavy burden on cashflow.
Upgrade Communications: you can probably expect a drop in contributions from the marginally committed and from those with serious economic difficulties. Increase your communication frequency. Do this to offset that expected income loss. To build greater constituent affinity. To increase donor retention. To encourage gift upgrades from those who can help pick up the revenue slack. No matter how tight the budget, you now must communicate more and communicate better.
Jocelyn Harmon’s excellent blog – Marketing for Nonprofits – recently ran a post titled “5 Ways to Keep Fundraising Results Up in a Down Economy.” Suggestion #5 really caught my eye. So, with acknowledgement to Ms. Harmon, here it is…..
5. Say thank you
According to Penelope Burk, author of “Donor-Centered Fundraising,” “46 percent of donors decide to stop giving for reasons that are tied to lack of meaningful information or to a feeling that their giving is not appreciated.” Saying thank you in a fast, friendly and fun way might be the single most important tool you have in your fundraising toolbox. Create a thank-you video from your clients and staff. Send handwritten cards. Write a thank-you song and link to it from a thank-you e-mail. There is no shortage of ways to show gratitude to your donors.
Jocelyn ends her blog post this way:
“Fundraising in a recession is no joke. Donors are stressed, and chances are that your nonprofit is stressed too. We’re all hoping for the bad times to end.
The good news is we have the tools to succeed. It’s our job to use our ingenuity and resources to create a sound strategy to keep fundraising results up in a down economy.”
COMING UP: Reality IS calling. You must respond. As Joyce points out, you have the tools to succeed. The next post will spotlight one of the most productive tools of all – a tool I used constantly when I was managing nonprofits, but forgot about in the intervening years. Fortunately, blogger Sarah Mackey brought this forgotten tool to my attention. I will happily share her insights with you. The next post will also introduce new services on this blog – current and future. (And then, the week after that, comes a discussion of the single most important response to the economic downturn – the best way to protect your revenue stream.)
Watch for the next edition of the Nonprofit Branding Blog – available Tuesday, January 10. (Subscribe to the blog and you’ll get 2-sentence email announcements when we post. Check the upper right corner for the subscription thingy.)