Those of us who have been in fundraising for a while have lived through a number of economic downturns and seen their effects on fundraising.

While nobody wants to tempt fate by uttering the “R” word, there is a high possibility we will be in a recession in 2023. Even if that’s avoided, we know that the significant increases in interest rates and food prices are taking a real toll on people’s wallets, and emotions.

At the beginning of 2020 – when Covid first hit –fundraisers were nervous about whether donors would keep giving. But those charities that heeded the advice to continue fundraising discovered that donors were more generous than ever. Those who didn’t, of course, are still feeling the repercussions; smaller donor bases, and reduced financial stability.

But for almost 100% of our clients, the individual giving programs and direct mail / digital programs have performed better in 2020-2022 than ever before.

Based on our “recession” experience, we don’t think this will be the case this time. 

While many donor databases are made up of retired seniors who have likely paid off their mortgages, the spike in groceries and other living costs will hurt those living on a fixed income, no matter how asset-rich they may be and folks aren’t staying home and saving money like they did during the worst of Covid. You’re competing with travel budgets, a new car, gifts to kids’ families to help them purchase a house, etc.

Since we are fundraising in difficult times, here’s what we found to be true: a charity’s loyal, active donors became even more supportive than before. These are the people for whom your organization is a priority – they have wholly bought into your cause and the work you do. The places where results declined significantly were higher-value donors (mid-level + major) and prospecting.

Here is what we have seen in the past, and where you may see a negative impact in the months or year ahead:

Prospecting

In the last two recessions, we found that response rates to prospect appeals declined. Net cost on acquisition went up. Existing donors stayed loyal, but people tended not to begin supporting new causes (with the exception of food banks and missions and homelessness charities – those very visibly serving the people struggling the most).

What you can do: The decision to stop prospecting for new donors altogether has created a long-term disaster for charities that ceased acquisition, since there are no new donors to offset natural donor attrition. We recommend you continue prospect campaigns, but budget for lower results and trim the lower-performing segments and lists if necessary. Or, reduce the number of prospect campaigns each year, but don’t stop them altogether. You can reduce costs by including prospect lists in house appeals, with variable copy.

Many charities have databases with tens of thousands of people who once gave but haven’t in 3, 5, or 10, years. Make sure you test those segments in prospect appeals instead of relying solely on trades and rental lists. Test those deep lapsed and dormant names in prospect packs as well as house packs, as well as with targeted lapsed mailings/telephone/digital campaigns. Be upfront. Rather than simply one varied paragraph or Johnson box, carry a “why have you forsaken us” message on your OE or subject line.

Test a lower gift array on prospecting.

For hospitals and children’s hospitals, in particular

While our health system is in crisis, and our hospitals have unprecedented numbers of patients, staff shortages, and wait times, we strongly recommend considering the marketplace and “emotional context” in which your appeals and communications are landing.

Be honest with donors – in Canada, donors’ gifts can’t be directed towards doctors, nurses and beds, but they can help purchase the new equipment that will let medical teams see more people more quickly. If the current crisis of Covid + flu + RSV continues, consider sending urgent appeals via email, telephone, even mail. Or adding an insert to a mailing pack that’s already underway.

It’s also worth reconsidering marketing messages that might jar with people who have just waited 11 hours with their sick child. Or who have watched repeatedly on the news about wait times and GP shortages and what keeps being presented as a crumbling health care system.

Legacies

It’s always a great time to talk to your donors about legacies. Those charities with a healthy legacy program withstand many storms. Craft your legacy messages so donors see what a great opportunity it is to make a much more significant impact than they ever dreamed possible. Keep in mind the five main concerns that legacy donors have and how to address them upfront. 

In a nutshell

What we already know to be true still stands: treating donors with respect and honesty is essential to fundraising. Take it back to what grandmothers around the world have always taught us: ask politely; thank genuinely; show them what you’ve done with their gift.

In Part 2: Mid-Level and Major donors, and your Active Donor Base

Lynne Boardman has spent over 20 years creating successful individual giving programs for charities in both Canada and the UK. Her work has spanned health care, international development, human rights, education and environmental causes. She is currently the Managing Director of HMA, working with clients like Amnesty, Oxfam, Indspire, Covenant House, and many children's hospitals across the country. She speaks, strategizes and writes about legacy fundraising whenever there is someone nearby to listen. You can reach her at lynne@harveymckinnon.com