Prepare Now for the Impact the Coronavirus will have on Charity Fundraising 

It is unlikely to be business as usual for Canadian charities in the upcoming year. The spread of the novel coronavirus could significantly affect operations. It is best to start preparing now, particularly as it pertains to fundraising. 

There has been much talk about how the novel coronavirus will affect the economy. The jury is still out as to whether or not it will trigger a recession, but this seems likely. At this point, it is mostly travel-related businesses that are being impacted, but as the threat grows, it is likely to affect other economic sectors as well. Stock markets are plummetting today, and many private investors will see their assets hit hard. 

Many of these investors are, of course, generous donors. it is very possible that their giving will be curtailed as a result of their financial losses. 

As a general rule, giving fluctuates in proportion to the GDP. In the US, giving has been 2% of the GDP for decades. Giving diminishes in proportion to economic downturns. Charities need to be mindful of this. 

In hard times, it is charities that ramp up their fundraising activities the most that best weather economic storms. Those who cut their fundraising staff or reduce fundraising efforts do more poorly. Now is an essential time to strategize about how your charity can adjust and increase its fundraising efforts. 

Many charities, especially small ones, rely on fundraising events such as galas for a large proportion of their fundraising revenue. This could pose particular problems. These events may need to be postponed or canceled in the coming months if the community spread of the virus occurs locally. What would the impact of a canceled fundraising event be for your charity? 

Seniors (over 65) represented 30% of all donors in Canada in 2017, and they give more substantial average donations as well. They are usually over-represented at fundraising events. It is this aging population that is most at risk of COVID-19. If your fundraising events are canceled, how will your charity make up for the potential loss of such fundraising dollars? This may be a challenge for your charity whether or not a recession hits. 

Recessionary times are a double-edged sword. During such times the need for services increases at precisely the time that resources dwindle. Health-related charities are likely to see an increased demand for their services. Imagine if there are wide-spread school closures and single-parents in already poor households are required to stay home to provide childcare. Food banks are likely to come under even more pressure. This is just one possible scenario. 

Charities would be wise to reach out to all their donors now. Let them know that you anticipate disruption, especially in fundraising. Tell them that you may need to conduct additional mail or email campaigns this year. Perhaps ask for an immediate donation at the same time. 

Remember to educate your donors on the different ways to give. Include mention of legacy giving. Many donors are interested in willing parts of their estate to charities. They just do not know how to do it. Provide them with information resources. Consider providing online workshops in this area. 

Have internal meetings and review your fundraising plan. Plan for the worst-case scenario.

Fundraising and the Annual Giving Campaign

By and large fundraising is about identifying your fundraising assets and building on these. For example, an organization that has a history of successful fundraising events, is likely to have a significant database of attendees, who may also be willing to donate to an annual gift giving campaign. I have come across struggling organizations that have no idea what their assets are. Some were sitting on the pot of gold on the end of the rainbow while contemplating where to find it. One of the greatest assets any organization can have is an extensive mailing list, contact list or donor database.

A national organization I was contracted to help had 16,000 names in their database. All of these people had made a donation at some time, whether big or small. My starting point (after writing a Case for Support) was to develop a list of the 100 single, largest donations received by donor name and the top 100 lifetime donors. After eliminating duplications, I was left with 160 names. This was my annual gift campaign prospect list.

I set out trying to get as much information as I could about my top prospects. Management had only had direct contact with 5 or so of these individuals. There was little other information available in the database. I began searching the internet. I found no information on some, a few appeared to be deceased (after cross checking their last donation with obituaries, I considered this verified), but I learned a great deal about many. I learned, for instance, of their other donations and causes that interested them. Some, for example, gave very major gifts to their local United Ways. The giving capacity of some of these individuals was beyond expectation. It was also obvious from their other favorite charities that many had a deep interest in our mission. Furthermore, they were already linked to us by their own giving, no matter how sporadic.

The important lesson here is that this charity had fundraising assets and capacity that they were totally unaware of. A related lesson: even a small charity should know who their top donors are. Reaching out to my client’s donors resulted in gifts of $25,000, a couple at $10,000, several at $5,000 and many more in the four figure range. It returned this organization to financial health.

One does not need to have 16,000 names in a database to have success with an annual individual giving campaign. I have made impressive gains with a list of 1600.

I have also uncovered lost opportunities of spectacular proportions. The lead donor of another organization had given at least a $1,000 annually to my client. In some years it was double that amount. No one in the organization could tell me anything about her. So I started to research. I found that she sat on the Board of one of Canada’s largest private foundations (founded by her father), that she recently gave away a huge tract of land to an environmental group, and that she anonymously deposited money into people’s bank accounts because she though they may need it. This latter propensity came to light only after she passed away a few months earlier. A confidant cleared up many a mystery. I could not help but feel sad that my client had not inquired about their top donor and reached out to her personally, because I think she would have embraced them even more. There was a great fit, but an even larger flop.

Again: it is crucial to know your top donors, especially if you are a small organization. It is important to build relationships with them.

Many charities, even small ones in terms of budget and staff, have untapped fundraising assets. To a large degree this is because they have no fundraising expertise. Sometimes they just don’t have the staff time to do their homework. A consultant could help identify assets and strategies for building on them. Businesses may be interested in the demographics of your members, or your reach through social media. But first some one needs to examine your database, calculate your reach, ….

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Thomas Allgoewer
Allgoewer Consulting
Ottawa

Oct. 16, 2016
 

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