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Rhea Wong
Welcome to Nonprofit Lowdown. I'm your host, Rhea Wong. Hey, folks, Rhea Wong here with Nonprofit Lowdown. I wanted to do a solo episode today because I just feel like I need to respond to the general state of the world and everything that's happening. I'm not trying to make this political, but I think we can all agree that it has been interesting times here in the United States. Between all of the fluctuating tariffs on federal funding, on federal funding, off federal funding, on. I think all of us just feel completely whipsawn and crazy. And I know that there's a lot of anxiety that comes from uncertainty and feeling that maybe your funding is going to be in jeopardy. So I want to acknowledge that. I hear you, I feel you. And I will say, after 20 plus years of fundraising, I say to you, this too shall pass. If it's not one thing, it's going to be another. However, and I know we say this a lot, we are in unprecedented times. And what I want to offer you as a thought is in these moments that feel hard, it is much better for us to be the thermostat and not the thermometer. What I mean by that is it's so easy for us to be reactive to everything that's happening around us, and yet we have no actual control over any of it. All we can control is our reaction to it. And so what I want to offer you today is a recession playbook. Because no matter what, you will still have to fundraise because the people that you help still need your services and need you to be around. And as a leader, as a fundraiser, I'm going to offer you some step by step suggestions in order to help you weather this storm. And as they say, stormy weather makes strong sailors. Here are a couple of suggestions that I have for you to help weather this storm of economic turmoil right now. So number one, you know, I'm going to talk about retention. I talk about retention all of the time. But I'm going to say this is a time for you to double down. Because the truth of the matter is that generosity in times of economic does not go away. But it looks like perhaps less generous gifts. It looks like perhaps longer lead times on gift. It looks like people who are on the bubble may not repeat their gift. Here are a couple things to do. Number one, hold tight to the donors you already have. I've done lots and lots of discussion on this, but we know that retaining a donor costs less than acquiring a new donor. So if you can focus on simply a 10% lift in retention, you can double your revenue. Here are a couple quick things to try to try a 90 day gratitude sprint. What that means is handwrite notes, make thank you calls and text quick impact photos to your top quartile of donors. For many of you that won't take a huge amount of time, but certainly it is time worth doing. So carve it out in your calendar to do it. Early warning signs so let your CRM flag any lapsed opens or skipped gifts. There are things like donorperfect and even simple mail merge reports that work and what you can do is intervene when you notice that these donations have lapse or engagement has declined. Consider a monthly giving upgrade. So what you might do is invite one time donors to a modest monthly gift, maybe $15 to $25. And so what we know is that recurring donors stick around twice as long as one time donors. Then think about a matching pool. So you might ask a little a loyal major donor or a board member to set a one to one match. What we know about matching gifts is that response rates jump up 20 to 40% in shaky markets. Okay, step two widen and steady your revenue mix. So what that looks like is once you have shored up what you have, which is that you have the donors and they're giving again and you have a pretty good retention rate, you now want to think about widening and studying the mix of revenue because diversification is the thing that's going to steady you during this period. So what that could look like would be maybe adding a new line of income. So if you're thinking about maybe a corporate sponsorship, a fee for service training, e courses, low cost merchandise, something that will help you to diversify your revenue away from simply that one strand of revenue that exposes you to vulnerability. If it goes away, this might help you write off the recession with fewer bruises. Now typically when you're thinking about a new line of revenue, it's not going to be a huge moneymaker at the beginning. It tends to be a slow build. But start today. Remember you can tap your donor advised fund. So what we know already is that there's 250 billion. So what you might be able to do is send out a list to your major donors or anybody that you've identified who actually has a donor advised fund and remind them that they can recommend a grant today that will cost them nothing because they have already set aside that money. For some people it may just be the trigger that they need to remember you can get into plan giving and legacy options. I know many of you are not yet at a point where you have very complicated, complex legacy planned giving operations. But it could be as simple as hosting a free estate planning seminar with a lawyer and you can post bequest language and they host a write your will webinar with your donors. And then finally pitch skills based volunteering. Now we know a lot of corporations and foundations are pausing funding at this point because in this time of economic uncertainty, no one is looking to make new moves. But even when they slash cash, companies still need CSR wins. So you can ask for it legal or marketing sprints that save real dollars for you and also engages employees for the long term. Okay, step three Communicate for confidence, not crisis. Remember, desperation is a stinky perfume and nobody likes it. So a couple things here first. First I recommend radical transparency. So drop a one page dashboard each quarter that shows the dollars in, dollars out and the lives change. What this will do is to help people understand what their money is actually doing. Because when I give to a charity, I am looking for a sense of impact in exchange. And if you're unable to tell me what my dollars did or the difference that it made, I'm unlikely to repeat the gift mission First Storytelling. So remember short videos, quotes, concrete wins, beats abstract needs every time. So instead of saying your gift makes a difference to hundreds of students in New York City, instead maybe you focus it on little Bobby. Because people give to people. And I think small, short and more consistent touch points beat longer and more inconsistent touch points. And remember, communication should not feel like throwing a tennis ball into a vacuum cleaner. Which is to say that you want to encourage a two way channel of communication. So what that could look like might be a virtual town hall or a WhatsApp group so supporters can speak up and trade ideas. Engagement often outruns dollars in a downturn. Step 4 Build internal shock absorbers. What you want to do is think about scenario budgets. Let's think about a green, yellow and red revenue with preset expense triggers. For example, you might say at a 10% budget cut, we are going to freeze hiring. You might try to cut back on some variable costs like materials, et cetera. So know in advance what moves you're going to make before you get to a situation that you had not planned for. If you fail to plan, you plan to fail. Operating reserve. I know, easier said than done. But I think if you really try to get at least three months of cash on hand, at a bare minimum, it might help you sleep better at night. And on top of it, it shows funders that you're stable, think about how you can also share services with other organizations. So maybe that looks like splitting back office costs or co hosting events with peer organizations and then finally automate the low value work. We live in this golden age of AI. So things like receipts, calendaring, schedule, basic outreach should go to software so that the humans can be freed up to steward. So let's put it all into play. 1. Audit so map every revenue stream and retention metric. Flag your single point of failure 2. Prioritize. Pick one retention move and one diversification move to execute in the next 90 days and three measure and share track results in public. Your small wins calm nerves and build momentum. So here's some quick wins you can launch this month. Coffee with the CEO Plan A 30 minute zoom Q& A for mid level donors. It's free. The only cost there is staff time. Send out a monthly gift emails $10 starting ask plus an impact per month graphic that you can send to new and low dollar donors to ask for a monthly gift. Corporate Micro Project Reach out to any of your corporate partners to see if they would be open to a small skills based volunteer opportunity in order to put put your organization on their map and board referral challenges. For example, can you ask each trustee to introduce two prospects and you host a VIP site visit for each of them. So remember, economic headwinds filter generosity. They don't kill it. If you stay donor centric, focused on diversifying your income and share your impact with radical clarity, you'll exit the downturn stronger than you entered. If you want a free copy of the playbook that we just discussed, go to the Show Notes and download it for free. I will see you next week. Let me know how it goes. And if any of this is resonating for you and you want to talk about a specific plan for your nonprofit, feel free to book a free Strategy call@riawong.com I'll see you next time.