Bad Luck or Bad Strategy?
Blaming the global financial crisis for your fundraising woes is a cop out, says David Pettigrew. Instead, nonprofits feeling the brunt should consider how their past strategy - or lack thereof - may be the real cause of their current complaints.
I was recently alerted to a story in the press about a charity that was in a spot of bother and was putting the blame fairly and squarely on the global financial crisis. I thought that a little digging around on this story might prove interesting, so I checked out the press release on their website. Sure enough, here was a director of this particular nonprofit explaining how the economic downturn was forcing them to make cuts to their services and how they are facing a multi-million dollar hole in their budget. Pretty strong stuff, and if true, a marker for the whole sector perhaps.
After reading the press release I thought a bit more about this problem. Sure, we might not have predicted that we would be in the middle of an economic downturn at this time, but a little judicious risk assessment of the fundraising program may have provided some long-term guidance on strategy.
For this particular organisation there may have been certain actions they could have taken over the last few years to mitigate the position they find themselves in now.
As an organisation, they have been very focused on corporate and event fundraising yet as business begins to cut back, the first casualty is, inevitably, corporate donations. We are seeing this trend right across the sector and we are seeing the downturn in this revenue stream affecting a number of nonprofits. A greater focus on individual giving with a particular emphasis on regular giving, for example, may have helped in this case.
I wonder too, how much of this situation has been caused by board members driving the fundraisers down the wrong road. How many of us have had to fight board opinions on fundraising in the full knowledge that to follow them would spell disaster? Yet how prepared are we to stand up for what we believe?
The most tragic part of this story is the impact on service delivery of having no strategy or a bad strategy.
So, bad luck or bad strategy? I think that the global financial crisis is undoubtedly having some impact on our sector. But I do not think that we can blame it for all our ills.
I think there is a bit of a problem when fundraisers blame the global financial crisis for poor results. There are nonprofits that are still showing positive growth and still turning in very good results despite the economic downturn, and the reason is pretty straightforward. These are nonprofits that have well thought out and well executed strategies.
And by that I don't just mean organisations that have always done well, but those that took pretty tough decisions a few years ago in order to ensure that they could enjoy the fruits of those strategic decisions today. If we look back in time we can see organisations at the fork in the road, a fork that took some on a journey where today they are enjoying prosperity despite the global financial crisis. Then there are those that are perhaps happier to blame external factors rather than internal ones.
One of the most important things we should learn from all this is how to avoid similar problems in the future. Organisations need to make themselves recession proof. To do that, they need to imagine themselves in five years time looking back at the decisions they made today.
Now is the time to undertake the critical strategic planning that will deliver that all-important sustainability in revenue. A strategy that means that the next time we have a recession they are not only able to weather the storm, but will continue to grow - even in difficult times.
When things get tough we can do one of two things: we can look for a scapegoat or we can find a solution. Solution-driven fundraisers - the ones who look to the horizon, not down at their feet - are those who will continue to succeed.
David Pettigrew is the director of fundraising consultancy Nourish nfp.
F&P edition: Agenda e-bulletin - May 2009
Written by David Pettigrew
