2022 has shaped up to be a challenging year for many nonprofits. The jump in inflation has taken a toll on many organizations as they have seen reliable income from traditional donors drop off year over year. This is not the first time unforeseen economic circumstances has had a negative effect on philanthropy and it certainly won’t be the last. The question is, however, how many nonprofits will learn from the past so that they can weather these unexpected challenges and possibly be in an even stronger position when things recover. The best way to build for the future while being prepared for unexpected challenges in the economy or the culture is to have a fully developed and integrated development program in place.
Donors come in all shapes and sizes and make gifts at different times and for different reasons. If your organization becomes too dependent on one type of donor or fundraising stream, you may find yourself struggling when the environment unexpectedly changes. To take a recent example, organizations that were heavily dependent on fundraising events were caught completely off guard when COVID forced people to be isolated and unable to gather. Another example is facing a number of organizations right now who are heavily dependent on direct mail. The current record inflation is affecting lower level donors who have to decide whether they will make their typical $50 gift to a charity or save those dollars to fill up their gas tank.
The organizations that most effectively grow their fundraising income year over year, while also being prepared for the unexpected, are those who understand the life cycle of donors and have developed an integrated program that meets the donors where they are. They have created multiple buckets of income that they can depend on for the times when one of those buckets has a few holes in it. The traditional ways to raise funds fall into a few categories: Direct or digital mail, events, major gifts and planned gifts. These are all part of the life cycle of a donor and provide the best way to create a sustainable fundraising community. In the coming weeks I will touch on the life cycle of the donor and ways organizations can integrate these different sources of funding to bring your donors closer to your mission in order to create impact in good times and in more difficult times. Stay tuned!