Is Your Nonprofit Prepared for a Recession?

What would it have felt like to sit with the disciples the day after Jesus’ crucifixion?

The disappointment and frustration must have been palpable. This wasn’t what they were expecting! They passionately believed that the Messiah would rescue them from Roman oppression. Instead Jesus was crucified, and all their hopes were buried with Him in a tomb. 

Jesus’ death wasn’t in the disciples’ plans. 

Neither was His resurrection.

For leaders of nonprofit organizations disappointment and uncertainty is real right now, too. 

We didn’t expect a pandemic to put organizational fundraising goals on hold and shut down our social lives. We didn’t plan to navigate a recession in the aftermath. And we certainly don’t have an optimistic vision for how God might be giving this story a good ending. This leads to the question…

With an economy in freefall and your best laid fundraising plans for 2022 teetering on irrelevance, what’s next? 

We walk alongside God’s people in the midst of uncertainty. 

As the disciples carried uncertainty, fear, and grief after Jesus’ crucifixion they kept company with one another. Then, after the resurrection — according to God’s perfect timing — Jesus walked with Mary in the garden and later with the disciples on the road to Emmaus speaking words of hope and truth.

In my 35+ years of working at the intersection of faith and philanthropy, I’ve weathered three major recessions and too many organizational crises to count. My experience has taught me two things: God’s ways are not our ways and God abundantly provides for His people.

That being said, organizations that thrive during a recession intentionally and relentlessly do three things. This article will walk you through three strategies recession-proof organizations implement.

Faith-Based Philanthropy Suffers Least During Times of Uncertainty

Have you ever met a woman with a “Mary Poppins” purse?

You know, the woman you can count on to have motrin, band-aids, hand sanitizer, diapers, snacks, and sunscreen in her bag. She’s prepared for any and everything even if there's not a single headache, scraped knee, or extra sunny day.

There’s a lot to be said for being prepared for sad things like being hurt and happy things like a day by the lake!

In the past two weeks, every one of the clients I’m currently serving has been in touch with me to ask, “Brenda, what should we expect will happen to our charitable gift income if we’re going into another recession?” I rely on data, but I’m also an optimist, so I respond “Prepare for it to go down...maybe.”

In other words, be ready for a decrease in charitable gifts or for them to stay the same, maybe even increase. Be ready for anything! Charitable giving has been known to decrease during recessions. However, charitable giving does NOT ALWAYS decrease, especially for faith-based organizations.

If history repeats itself, which it usually does, the data should bring some solace to faith-based nonprofits facing crises in the global economy. Historically, there are four trends we see in giving during economic crises:

1. Charitable giving for churches and other ministries stays relatively flat during recession, and may even increase because giving is a weekly or monthly habit for many people of faith (Giving USA).
2. Even if the economy is hit hard, many people will not change their giving behaviors dramatically (Lilly Family School of Philanthropy). 
3. People who are more religious not only give more to religious causes, but they also give to secular causes at higher rates, though their faith community and other religious causes are likely to be among their highest philanthropic priorities (Pew Research). 
4. Faith-based organizations and other nonprofits that address the increased needs brought about by economic distress may actually see increases in charitable support (Stanford University).

That being said, losses in the stock market and other investments may impact your ability to raise large gifts in the near term. Charitable giving trends and stock market trends have always been closely correlated. Many individuals, corporations and foundations will suffer losses that will impact their charitable activity.

The good news is, history tells us this will be only a temporary setback. 

So, take heart, and stock your Mary Poppins purse with “band aids” in case giving decreases, and “sunscreen” in case it doesn’t!

The Relationships You Retain with Stakeholders will Retain Momentum for Fundraising

Have you ever felt lonely at a party?

Maybe it was because no one intentionally engaged with you or there wasn’t a friend group for you to tag along with throughout the event. It can happen to anyone and is most often unintentional by the host and other attendees. 

When it comes to development during a recession, fundraisers cannot afford to be unintentional about reaching out to and connecting with their donors. Fundraisers must be intentional to make sure their donors feel seen and connected throughout an economic downturn.

When surveyed about their decision to stop supporting an organization, the majority of past donors consistently replied “I no longer felt connected.” Relationships are the heartbeat of Christian philanthropy. Jesus’ “Love your neighbor” command is the philia root of the word. 

We can’t afford to disconnect at times like this. Instead, we need to invest in two strategies that will strengthen our relationships with our donors.

Increase Communication

Put your ministry in the position of extended family, and plan to ‘write home’ frequently. 

Your members and friends care deeply about your ministry, and want to know how you’re affected by the current situation. They will be happy to receive your messages of encouragement and stories of faith. You should have an external communications plan, with key messages that inform all of your content development, including:

• expressions of care, concern and empathy for the recipient
• a connection between the current situation and your ministry’s mission
• current information about how your ministry is being impacted, including financial impact
• your commitment to staying the course and moving forward
• invitation to the various ways that people can be helpful during this time
• messages and stories of faith, hope, and inspiration
• information about how they can contact you or stay connected

Donors give because they care deeply about your important work. Updating your donors with how you’re shifting your approach during uncertain times is a way you serve them and assure them that the work they believe in and support is continuing. 

Reach Out Personally

Most of us have friends we touch base with via a yearly Christmas card and friends we make an effort to grab coffee or have a regular phone conversation with. 

It’s the same in fundraising. There are donors and supporters you communicate with through broader updates like we discussed in the previous section. And there are stakeholders who need to hear from you personally and periodically throughout a crisis or financial downturn.

Here’s a simple process for these relationship-critical conversations:

Before and during these conversations be conscious that you’re not the only one who is concerned while facing these uncertain times. Staying in contact with your donors provides you with a beautiful opportunity to support and encourage them during a challenging season as well!

Before and during these conversations be conscious that you’re not the only one who is concerned while facing these uncertain times. Staying in contact with your donors provides you with a beautiful opportunity to support and encourage them during a challenging season as well! 

Organizations that Stay the Course are Most Likely to Emerge Successful

When life is busy or hard, is it better to let the mess in your house accumulate until you have a break to clean it or clean what you can as you can even if you don’t get it all done?

Most of us would agree that it’s better to clean what you can as you can instead of letting it build up! Mostly because life probably isn’t slowing down anytime soon, and secondly, because little-by-little adds up.

When it comes to fundraising during crises and uncertainty, historical data shows that economic downturns are temporary. This means we do know there will be a lull to get back on track. However, data also shows that organizations that stay the course during uncertainty — especially where fundraising is concerned — emerge successfully. Little-by-little adds up and makes a positive difference in the development world, too. 

Stay the course as an organization by prioritizing these five actions:

1. Strategic choices. Stay focused on your long-term plans and goals, while making prudent short-term adjustments to fundraising activities. 
2. Leverage digital. Continue to improve and advance your online and automated giving strategies to grow your pipeline of sustained gift income. Look for those whose giving has stayed flat for the last 3 years, and invite them to increase during a time when others may have to pull back. 
3. Add a Special Appeal. Invite one-time, over-and-above gifts to support new needs that arise out of the crisis or economic setback. Episodic givers who may not be inspired to support your day-to-day operation are more likely to respond to the real human needs that arise during times of economic hardship.
4. Invite support beyond financial gifts. Invite volunteers and stakeholders to step up to help in important and meaningful ways. Engagement is one of the most important ways nonprofits move relationships forward.
5. Be bold. Remain unapologetic about your ministry, while still being sensitive to the impact of the recession on your donors.This is the time to model what faith and trust in God’s provision actually look like!

Small strategic steps make a big impact when things seem stable, but they can be the difference between crumbling or thriving during times of uncertainty. 

In Isaiah God tells us that His thoughts and ways are not ours. When we don’t understand or know what’s happening God has promised to work all things together for the good of His people — you and me (Romans 8:28). 

How do we embrace these promises and let them influence our life? We take small strategic steps forward because we believe that the God of the Bible is the same God today who fulfills His promises to us. 

Are You Ready to Recession-Proof Your Organization?

A recession is not a death sentence for philanthropy. 

You, like many ministry leaders, are probably contemplating the next fundraising priority…

…the capital campaign that was deferred during the pandemic

…finally, establishing a legacy giving program

…or those churches that are still trying to get a handle on regular giving. 

While there are specific considerations during a recession any organization should take into account, you can still take steps forward. In fact it has been our privilege to guide many organizations to not only make it through uncertain financial times but to also thrive. 

Download this free resource How Recessions Impact Philanthropy: What Faith-based Leaders Need to Know to Make Financial Decisions or schedule a call with us to make a plan to recession-proof your organization!

Co-authored by Brenda Moore, CFRE and Sisi Roose.