Recessions generally mean more tough questions being asked by our boards. There can be a switch from long-term thinking to short-term budget management. Questions come up like, ‘what is a recession going to mean for our organisation’s fundraising revenue?’, ‘Should we cut commitments to fundraising activities?’, ‘How do we balance our immediate requirements for our service at the same time as thinking about the future?’
The best way to support boards in making the right decisions and protecting your fundraising is to focus conversations on the return on investment (ROI) that the fundraising program promises and will continue to deliver to the organisation. ROI is a requirement and a language that they would be familiar with in their mostly corporate roles.
As an example, the conversation could be,
‘For every dollar we invest in our upgrade program over the next three years, it will deliver xx back to support xx beneficiaries. So, a dollar invested in an upgrade today will translate to xx dollars in program investment and xx more people helped.’
Equally important is the opposite perspective that each dollar we don’t invest in our upgrade program this year will mean a knock-on of xx dollars next year, xx dollars the following year etc. Acquisition is always a tricky conversation as this is quite often the largest budget in a fundraising program and cuts this year will result in a net saving/benefits to the bottom line. Nonetheless, ceasing or slowing investments in acquisition will have dramatic impacts on the fundraising revenue in 12-18 months’ time, where gaps will start showing. The gaps become more and more evident as time goes on, as new supporters can take 1.5-2 years to pay back their investment, but by years 3-5, their ROI would be substantial.
A best practice approach would be to have a fundraising strategy with a mix of activities delivering to both short and medium-term ROIs to keep the organisational commitments to program activities as healthy as possible in both the short and longer-term.
What we do know from previous recessions is that organisations that kept investing in their fundraising programs saw their income grow and that those that reduce their fundraising expenditure saw declines in income pretty quickly.
Need help with communicating your regular giving return on investment? Download this free guide on ‘How to get your board on board with RG’.