Fundraising and the Economic Meltdown

Dear Readers:

Needless to say the e-mailbox has been full of questions about this economic meltdown.  I am answering a specific question related to this topic, but I have also been reading a number of e-newsletters and talking with colleagues, and everyone is full of advice.  I agree with most of what is being advised, which essentially amounts to this:
1)    Hold the course.  Keep raising money—it is getting harder, but it is not impossible.
2)    Whatever weaknesses you have in your fundraising program are going to be magnified now and you need to fix them.
3)    Very similar to #2:  Don’t blame things on the economy that may have been a problem already, but were just made worse or more evident because of the economy.  If you are over-reliant on foundation funding, that is a situation that just got worse.  If your board of directors doesn’t do its job, then their lack of involvement will be even more evident.  If you are understaffed, you will feel even more burdened.  But these were all problems you had before and you need to fix them no matter what happens.
4)    People will continue to give away money.  Even if unemployment hits 10%, that means 90% of people are employed.  These people will give money to groups that ask properly, thank the donors for helping and keep the donors informed about how their money is being spent.

One thing that I haven’t seen others saying that much, but I think many of us know is true:  this particular time is NOT A CRISIS.  A crisis ends.  If you can’t pay your staff this month, that’s a crisis.  It will end.  Either you will pay them eventually or you will admit that you can never pay them and they will have to find other jobs.  Crises are hard and sometimes they end badly, but they do end.  This economic meltdown is one a in a series of developments over the last 20 years such as erosion of federal tax dollars for social programs; expensive, bloody and so far no-end-in-sight wars;  ever greater inequality between the richest and the poorest; corporate welfare; and ever expanding social problems such as hunger, homelessness, and lack of access to health care.  This economic rollercoaster is not going away or resolving any time soon, and we all must figure out how to operate in this environment.

It provides a lot of opportunities for grassroots nonprofits.  Organizations will need to turn to their donors—all their donors, not just their wealthiest ones.  They will have to expand a base of individuals as there is not enough foundation money to support nonprofits in the best of times, let alone now when foundation endowments have eroded by up to 50%.  We have an opportunity to practice the best kind of fundraising, which is fundraising linked to organizing and movement building.  Ironically, this may be one of best chances to raise the most important questions:  Do we want to continue to be the most militarized nation in the world?  Do we want to have one of the largest gaps between rich and poor of any nation in the world?  Do we really think that art and culture don’t matter?  Don’t we think our children deserve good public schools, clean air and water, and a future with hope?  This is not a crisis, but let’s commit ourselves to make it a turning point.  (For more tips and analysis about the effect of the economy on nonprofits, please click here