Surviving an Economic Recession as a Non Profit

As I’ve traveled to different parts of the country in recent days, the conversation of ministry leaders is often focused on how the economy is affecting their giving. And even as I’ve talked by phone with donors, they ask with great interest how the foundation is doing. These kinds of conversations are going to continue.

The economic situation won’t change quickly. However, the question that every ministry must face is how they will adjust to their current realities. Make no mistake: this is not your normal recession, and, therefore, charities must respond differently. So what should the response be? Here are a few simple reminders of good practices:

1. Understand your budget. Income and expenses. Look realistically at how your income might be affected by the current climate, and make sure that you control your expenses. While this might seem obvious, this is an often overlooked step.

2. Engage with your donors. If ever there was a time to test the authenticity of donor relationships, now is the time. Indeed, this is the time to redouble your efforts with your current donors. Deepen those relationships. Be honest with them as well. Tell them where you are winning, but also be frank about where your challenges are.

3. Reengage with lapsed donors. Look at those who gave to your ministry in the past. Go visit those people. If you made mistakes with them in the past, admit those mistakes. Remember to focus on them and less on you. Andy Stanley’s adage is true:  people need to know what you want for them before you ask anything from them.

4. Make sure that you offer online donations. You should be offering online credit card and electronic check offerings. This is a simple process but once you get a donor set up with an online system it actually evens out your cash flow. If your donors want a simple way, they can set up a donor advised fund which allows for online contributions from the fund itself.

5. Make sure you offer online non cash donations. While 2007 contributions reached $300 billion in total giving in the US, few recognize that as much as $40 billion was in the form of non cash. Non cash contributions will only continue to grow in this cash strapped society. Non cash includes everything from cars, boats, RVs, jewelry, timeshares and inventory. It also includes real estate and business interest gifts.  SCCF handled $4.6 million of non cash gifts in 2008. iDonate.com handled another $300,000 of gifts of cars, etc. in 2008.  Call us and we can show you how to make this happen.

6. Seek matching grants from private foundations. Many private foundations recognize the plight of charities and have a renewed willingness to dig a little deeper to keep worthy charities in business. Now is the time to pursue those grants. Need help in identifying private foundations? Look at www.christianfoundationgrants.com for the largest faith based foundation database in the country.

7. Become a subject matter expert. This issue applies to each of the above issues. Make sure that you know the local and national statistics in your ministry area.  If you are a youth ministry, can you talk about the plight of youth in your area and around the region. Do you know all the details of your own ministry effectiveness? Do you have measurements of success? As you become a recognized subject matter expert, it only helps you establish credibility with the donor community.

Start today. And feel free to call us. We are glad to help.

William High is the President/General Counsel of Servant Christian Community Foundation.  He may be reached at whigh@servantchristian.com.

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One Response to “Surviving an Economic Recession as a Non Profit”

  1. Danny Jaynes Says:

    Hi Bill,

    Thanks for these words of wisdom. I just sent out books to about 40 of my supporters and thank you notes to another 100. I am writing you from Hong Kong and will be in Myanmar in a couple of days. I look forward to finding individuals, churches, businesses or foundations that will adopt the six community centers we have been asked to assist with in Myanmar once I return from this trip. Bless you guys, Danny


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