Tips for Nonprofits During a Recession

Navigating a recession poses unique challenges for nonprofits, particularly in the realm of funding. Companies like Lehman Brothers and Merrill Lynch are recognized for large philanthropic donations to various charities, which many organizations depend on for increased revenue.

Whether you are relying on corporate fundraising or a specific donor, it’s important to diversify your fundraising strategies to ensure the strength of your organization during a recession.  

Unfortunately, during a recession, many nonprofits’ programmatic needs increase. Since people and institutions have less disposable income, nonprofits receive fewer donations and struggle to keep their charity functioning. Each year most charities set new goals to raise more money than the previous year, but during a recessionary period, the goal should be to maintain at least the previous year’s funding, and at the same time cut expenses.

Why Is This Important?

Some charities make the mistake of relying on a single huge revenue source. Although large projected donations are wonderful, you never know when they could unexpectedly be cut short. It’s best to prepare for the worst-case scenario.

Making sure that one donor doesn’t represent more than 10% of your revenue provides more independence and financial security for an organization. Diversifying your funds and holding net reserves help to ensure that your nonprofit will survive regardless of the economy.

Although large corporate sponsorships and donations garner lots of publicity, it’s important to identify other means of receiving financial support.

Benefits of Connecting with Funders 

With thousands of foundations in the US, many charities receive grants for programming through trusts. The largest in the country, the Bill and Melinda Gates Foundation, gave away $2,011,675,000 in the fiscal year ending in 2007. Additionally, high net worth individuals, who are passionate about your cause, can provide pertinent funding.

It may surprise you, but according to Giving USA large donations, like the $2 million that Angelina Jolie and Brad Pitt donated to the Global Health Committee, make up just 1.3% of overall donations. This means that 98.7% of funding comes from donors who give smaller, yet vital gifts. If your organization doesn’t already, you should implement a direct mail campaign to your supporters asking for donations.

Benefits of SEO and Website

Another way to gather support is by allowing people to give through your website. 

The convenience of donating online often makes people more inclined to give. This is one of many reasons why bolstering SEO and your digital footprint is crucial for the success of your organization. The higher amount of media hits and media presence will attract more viewers to your website. 

Although, gaining traction on your website is half the battle. Organizations must prove their credibility in order to appeal to donors. Media coverage is one avenue to amplify your message and to build trust among potential supporters. By strategically leveraging media opportunities, such as press releases, interviews, and features, you can effectively communicate your organization's impact, achievements and ongoing initiatives to a wider audience. This heightened visibility enhances your reputation and encourages individuals to contribute to your cause.

Diversify and Strategize 

In essence, the guiding principle for nonprofits navigating recessions hinges on strategic financial planning.

By diversifying funding sources, safeguarding against overreliance, and fortifying reserves, organizations empower themselves to withstand the economic ebb and flow. Embracing these strategies not only secures immediate survival but also charts a course toward sustainability, enabling nonprofits to continue their vital missions despite the unpredictable economic landscape.To learn more about how TASC can craft a strategy to appeal to future donors and amplify your organization’s reputation, check out our PR and Communications services.