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.