Fundraising Strategies in a Pandemic
11th June, 2020
The article below was written in March, 2020.
Since then, events have largely played out as predicted. The Covid-19 situation in Australia appears under control, although there remains the possibility of a second wave, and a third wave, etc.
The USA is still struggling to contain Covid-19 transmission, and many feel that the country is opening up too soon, especially in states where transmission rates are high or even increasing. Europe also remains vulnerable, although the situation overall is improving. Other parts of the world are still going through accelerated rates of transmission, and WHO statistics show the spread of the virus is growing at a faster rate in the global population.
The BLM movement has had an immediate global impact, and in the USA we have seen a breakdown in law and order on various occasions in the past few months. It is not surprising that in a period of dramatic social disruption and time for reflection forced upon us by a pandemic, that other social issues have become a trigger for mass demonstrations – and the BLM movement will hopefully lead to lasting positive societal change in the way people value and respect each other.
In terms of fundraising advice, we maintain our recommendations as described in our article below. We note that our optimistic prediction that after the pandemic is over that philanthropy will increase may take a long time because of current predictions about the state of the world economy, and there may be more severe shocks on the way. We also note with horror that right-wing governments are using the pandemic as an excuse to relax environmental protection laws to free up what they view as constraints on industry. We predict there will be a backlash!
20th March, 2020
Photo by Anna Shevets from Pexels
At the time of writing this article Covid-19 has been declared a pandemic and many countries are under virtual lock down.
There are various scenarios being suggested, some better or worse than others, but it seems inevitable we will be facing an extended period of uncertainty in the financial markets, massive strain on our healthcare systems, and many more thousands likely to die early because of lack of available and effective medical intervention.
At this time, fundraising might appear to be a superficial exercise, except that many non-profits need extra funding now more than ever to provide essential support services to vulnerable communities.
The following observations/predictions are subjective but may be useful to consider when distilling a fundraising strategy over the next 6-12 months:
- Approaches for philanthropic support are not going to achieve normal levels of cut through at a time when people are consumed by worry and uncertainty and have a focus on their immediate families and loved ones. This is likely to last at least for several months until a 'new normal' is established.
- Our optimistic guess is it will be at least June/July 2020 in Australia before people adapt to new working conditions and are more receptive to receiving messages seeking funding from not-for-profits, and this is contingent on the Coronavirus being contained and there is a decrease in transmission.
- It will take much longer for the situation to stabilise in Europe and the USA, and this will produce continuing shocks to the global financial system as more and more people become unemployed and their health systems fail to cope with the crisis. The situation in America is particularly troubling and there is a real prospect of massive social upheaval and a breakdown in law in order.
- Face-to-face and event related fundraising is not going to be supported as people socially isolate.
- With increased time spent on the computer as people socially isolate, there are opportunities to introduce innovative ways to engage with supporters and in some cases to help beneficiaries.
- Not-for-profits will need to halt programs and possibly lay off staff involved in non-viable fundraising activities (special events, direct mail, regular giving, door-knocks, etc).
- The Internet is going to be inundated by online advertising campaigns from not-for-profits and commercial enterprises trying to reach a captured audience confined to their homes. Likewise, telemarketing will intensify. However, these efforts are unlikely to produce positive results and in fact may create negative perceptions about these organisations as being out of touch with reality.
- Facing an uncertain future, many smaller donors will cancel their regular monthly donations and response to appeals will also be much lower than normal, and this will only increase as unemployment rates increase over time.
- Many not-for-profits were heavily invested in the share market because interest rates were very low pre-Coronavirus, so negative impact on their balance sheets will be severe.
- Many high-net-worth individuals and trusts and foundations were also invested in the share market for the same reasons, and they are likely to be going through a re-evaluation of their funding priorities.
- Many smaller not-for-profits will not remain viable and are likely to wind up, while larger not-for-profits with healthy balance sheets will stay the course and have an opportunity to acquire new supporters and increase market share post-Coronavirus.
- Governments and banks are likely to offer short-term loans and other financial support to not-for-profits on favourable terms.
- The ultra-wealthy, let’s say those with more than $50 million, will remain in a strong position to be philanthropic if they choose to be so. Some will actually increase their wealth in a bear market.
- Many people will reassess their world-view and belief systems in a time when bushfires, floods, droughts and the coronavirus all point to humankind's mismanagement of the environment. Alternative belief systems such as Indigenous views about living in harmony with nature and custodianship of the land will become more widely respected.
- The area of impact investing will accelerate in importance as people more actively decide to invest in causes that make our world a better place.
- More people will take the time to update their Wills and consider making a bequest to their favourite causes.
- Post-Coronavirus, once the world economy stabilises and people's finances make some recovery, there will be a significant increase in philanthropy.
- The market share of philanthropic support will increase for environmental, indigenous, wildlife and clean energy related causes - again because of growing social awareness about protecting nature and our planet. Medical research, especially related to contagious disease and health related services, and mental health related services are also likely to be higher on the philanthropic radar.
- Other non-profit sectors such as international aid and the arts etc may emerge with a lower market share of the philanthropic dollar than before.
The above observations and predictions rely on a set of largely optimistic assumptions, for example that our financial system and society will recover from the Coronavirus and we will emerge from this catastrophe relatively intact. You may agree or disagree with our thinking and you will certainly have other suggestions about important factors to take into consideration in shaping fundraising strategies. Based on the above thinking we suggest:
1. If not already done, it is worth investing time to update your risk register and mitigation strategies.
2. The financial circumstances will be different for every not-for-profit:
2.1. For those with a healthy balance sheet and reserves, this is a good time to consolidate and invest in donor cultivation, retention and stewardship, prospect research, upgrading CRMs and cleaning donor records, updating fundraising policies and procedures, etc. The budgets and resources allocated for special events and appeals over the next 3-6 months should be redirected to consolidation activities, retaining staff and keeping essential programs running. Your overall strategy is to be in a position to hit the ground running once the economy stabilises and to increase market share.
2.2. For those with a weak balance sheet and low reserves, now is not a good time to try and launch broad appeals for philanthropic support. Instead, an effort to reach out to loyal supporters for emergency assistance is recommended, but only in a few months’ time if the economy appears to be stabilising and the Coronavirus spread is under control. In the meantime, all avenues to secure government/bank assistance to remain viable should be explored quickly. Cost-cutting measures will have to be considered. Your overall strategy is survival.
3. The ROI on emergency and regular appeals will be much lower than usual for an unknown period of time. If the ROI for your appeals has been marginal historically, then it may be better not to implement them at all for the next six months or so, especially if the financial status of your not-for-profit isn't healthy. If you do have a strong balance sheet, then activating appeals should go ahead with revised KPIs (e.g. more emphasis on non-financial KPIs).
4. If your not-for-profit has a healthy balance sheet and operates in the environmental, medical research or Indigenous areas, then planning to invest in donor acquisition strategies is worthwhile so you can quickly implement once society and the world's economy begins to stabilise.
5. Internet advertising, unless coupled with innovative ways to educate and entertain, is very unlikely to achieve a healthy ROI and potential negative impacts on perception need to be carefully considered. The exceptions to this will be medical research institutes and enterprises directly involved in combatting the Coronavirus, supporting the health care system or developing effective treatments.
6. Whatever is your not-for-profit's cause, the narrative of your organisation and its relevance will need review and, if necessary, reframing. Key messages should be designed to appeal to different audiences, align with your original vision and mission and the predicted shift in social awareness about the importance of living in harmony with nature.
7. An increased focus on major donors and bequest fundraising programs is probably a sensible strategy if your fundraising model includes these activities, and if not then it may be time to introduce them.
8. This is a good time to get to know your donors better. Plan reach-out programs using technology such as Zoom and Skype to deepen relationships, gain advice from donors, understand their commitment, future intention and satisfaction levels. Regular communication to supporters via email, etc should be designed to offer them helpful advice, tell them what you are doing, and invite two-way communication. Explore what supporters think is important now and in the future, and build richer profiles. When asking for donations, do so with a narrative that recognises they may not be in a financially strong position at the present time.
9. If relevant, e.g. you have beneficiaries that can be supported online or perhaps benefit from receiving regular telephone calls or being part of online communities, then invest in these areas. There are also opportunities to create innovative programs to educate and entertain people and their families who are socially isolated.