Bearing Down – Info Fund Raising

Many people that work in the numbers business, including us, have been saying for a while now that the stock market is overcooked, and a big correction is inevitable – so the major dive in the Dow Jones yesterday was not a huge surprise. No matter where we end up in the next few days, many finance gurus are still predicting a drop of 30% or more.

This article by David Rosenberg, the chief economist at Gluskin Sheff, was reposted by Business Insider on January 11, 2018, explains the trends in an easy to absorb manner:

Of course, Mr. Rosenberg is counseling private investors.

At Analytical Ones, we are consulting with nonprofit organizations. And all of us that worked in fundraising through the market collapse of 2008 know that philanthropy is closely tied to market performance.

So, what did we learn a decade ago that will help us prepare this time around? This is what you can expect it see:

  1. The recession of 2008 had a catastrophic effect on new donor acquisition. It has only been in the last couple of years that organizations have recovered in this area. In times of economic uncertainty, donors are unlikely to add organizations to support.
  2. Large donors dried up. Again, in times of economic uncertainty, its tougher for donors to write those big checks.
  3. Loyal donors continued to give – and they gave generously.

Knowing these things, here's what we recommend you should be doing now:

  1. Even with the drop yesterday, the market is still strong. Now is the time to be investing as much as you can in new donor acquisition in every channel you can.
  2. Identify donors with potential for big gifts, and secure those now. Find reasons for donors to make those gifts sooner rather than later.
  3. When the market does correct, re-focus your investments on cultivating your loyal donors to ride out the down-turn.

Market fluctuations are normal. They are nothing to fear. And if you have a plan ready to go rather than being caught off guard, you can optimize your fundraising and keep your organization afloat.

Article Prepared by Ollala Corp

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