Economic slump can aid non-profits
By Michelle Bonoan and Naree Viner© Pasadena Star-News, May 3, 2009
We've all heard the news. Since the stock market began its downward spiral last fall, it has attempted to drag endowments, private donations, and government funding down with it.
However there is never a bad season, or year, or day, or economic climate for soliciting donations for a worthy cause. Despite uncertain times and lagging confidence, savvy nonprofit must not let the doom and gloom paralyze them, or use the recession as an excuse to retreat.
First of all, downturns are cyclical, and by no means permanent. If we look at economic history, we have endured five recessions since 1973. In past years minor scares have gone somewhat unnoticed and people have simply kept their heads down in the belief that things will change or go away. And for the most part, that has worked.
Downturns have not had as catastrophic an effect on charitable giving as one might think. In 2007, U.S. donors gave a total of more than $306 billion to charity, the largest amount in history. In fact, with the exception of 1987, total giving has increased every year for more than 50 years according to the Giving USA Foundation. Recession giving continues to grow from year to year, even though it grows much more slowly than during economic booms.
However the current climate is very different, as is the reaction and impact on fund-raising. Yes, major gift officers are reporting the wealthy saying "not right now, wait a bit." This is not surprising. But now is the time for nonprofits to view the economic slump as a golden opportunity to fortify themselves by building relationships with their donors.
"It's much more expensive to recruit a new donor than to keep or win back a past donor, and the necessity for a good professional to accomplish this is critical," said Jane Haderlein, vice president of development and public affairs at Huntington Hospital in Pasadena.
In the nonprofit world, it's "survival of the fittest" during times of economic recession. But that doesn't necessarily mean nonprofits have to be the largest, best-funded organizations to survive. More importantly, it's how they react to the economic environment that makes all the difference. What is needed is strong management with a solid plan, along with lots of good, old-fashioned hard work.
Fund-raising management is an exacting process, especially in today's highly charged, fast-paced and competitive philanthropic environment. nonprofit organizations must create a targeted focus on attracting, hiring and retaining the most exceptional fund-raising talent possible to ensure long-term success.
When deciding whom to give to, donors give to people they trust. "The organization and its reputation and adherence to its mission are the starting points. However, in a competitive marketplace, the person (fundraiser) representing the institution closes the gift because he/she has built the trust and the special relationship with the donor," said John Baker, vice president of development at Loyola High School of Los Angeles.
What makes a fund-raiser successful? There are key qualities, skills, and abilities that need special attention when identifying top fund-raising talent. Candidates need to be experienced professionals with proven track records in building and implementing a comprehensive fund-raising plan. They must be creative and diplomatic with strong leadership skills and the ability to motivate and inspire others in the organization as well as their own staff to become involved in fund-raising.
Also extremely important is having a significant history of bringing in gifts of more than $25,000 and a comfort level in working with board members. They should have strong communications skills and the personal presence to represent their institutions at every level of interaction, both inside and outside the organization.
This requires a combination of technical ability and personal know-how that allows the person to discern what interests and motivates the donor to give to a particular cause or organization. These are fund-raisers who are able to set aside their own egos in favor of the organization's goals as well as understanding that establishing long-term relationships between donors and organizations is the ultimate objective.
As long as nonprofits, educational institutions and health care organizations have a strong need to raise dollars, the opportunities for fund-raising professionals who can deliver excellent results will remain plentiful.
"Given the current economic climate, the need for fund-raising executives has never been greater," said Gary Kaplan, president of Gary Kaplan & Associates. "From where we sit as recruiters, we can tell you that no employment segment within the nonprofit sector currently offers more opportunity and job security right now than that of fund-raising."
A recession can be the worst of times but also the best. nonprofits cannot sit back and let a recession act upon their efforts. Rather, it will be their hard work, dedication, and adaptability channeled through decisive planning that will ensure they emerge from the recession with the strength ready to continue the supporter growth their cause demands.
Michelle Bonoan and Naree Viner are education and nonprofit practice leaders with Gary Kaplan & Associates, a Pasadena-based executive search firm (www.gkasearch.com).
