Fundraising in a recession

Having experienced at least two recessions as Director of Fundraising of national charities I would caution against over-reaction. Your supporters will tend to keep right on supporting you, unless they actually lose their jobs, and their generosity in a downturn or crisis can be awesome. Many of the effects of a recession are delayed by six to twelve months, which will give you breathing space to build your counter measures.

Recessions present, however, a varied picture. In previous recessions, I have seen individual responses to appeals at least hold up, but not increase. Traditional recruitment techniques may struggle, but these days that is nothing new and we must also maintain our development of online activity; from email news-letters to social networking, in preparation for the days when generations X and Y are affluent and benevolent.

Trust income in 2009 is likely to be kept around 2008 levels. Grant-making organisations which rely on interest payments from stocks and shares often run a year behind the recession, as we saw after the dot-com bubble burst. Then they were able to maintain their initial payments, but these rapidly fell away as their shares lost value and interest dropped. Fortunately government is not cutting back and may indeed be increasing its funds to the Third Sector as a way of stimulating economic activity.

Certain companies are going to be hard hit and most will tighten their belts until the exact course and depth of the recession is known. Sponsorship in particular is likely to suffer as marketing budgets are stripped out, and the continuing move to online advertising picks up pace. Public events may suffer if entertainment budgets are cut, but nearly everyone will retain their salaries, and with fuel and food prices falling back disposable income should increase steadily. 

Personally I am quite sanguine about legacies. The actual fall in house prices has been less overall than the headlines would have us believe - at least according to a survey of surveys by Kirsty and Phil. They put the drop at about 6% or 7%, which for many organisations will be made up by the increase in the number of legacies coming in. If you are not in this position, with steadily increasingly legacy income, do move fast as there is a huge untapped market in legacies because so many people are yet to be convinced they should make out a will. Dust off that legacy marketing strategy and set those fundraisers to work.

This brings me to my key point: the best way to overcome a recession is to re-budget and invest heavily in any fundraising techniques you are not yet really engaged with e.g. in cultivating those neglected major donors - you can always make the 'ask' later. If you are not sure about entering new waters, seek advice from those who have been there and then do it right according to the book. This is no time for half measures, particularly in budgeting. I know of one large fundraising charity which has cut its expenditure on fundraising instead of increasing it. This will merely drive down their income even further, impacting on future years and taking them longer than others to climb out of any recession induced financial quagmire.

In my view, budget setting has always had a disproportionate influence on fundraising. It is a time when the fundraisers often have to compete with programme activity for funds, instead of being seen as the provider of income for those programmes, and given adequate funds to invest in developing our income streams and helping us to meet our beneficiaries needs. In a recession, above all we do have to argue the case for serious investment, but in a measured way; with clear figures, benchmarking against other organisations and being as passionate and inspiring about fundraising as we are about the programme work.          

Yes we can!

John Baguley
Director
International Fundraising Consultancy
www.ifc.tc

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