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Money is tight for everyone at the moment, and with rampant inflation, warnings about fuel price rises and tough times ahead, many charities and non-profits are unsurprisingly worrying about funds and the future.
If you feel like we’re living through a perpetual crisis at the moment, you’re not alone – and whether it’s Covid-19 or looming recessions, there’s a lot to feel uneasy about right now.
Talk to any charity owner, and they will tell you they are worried about a drop in donations, a rise in expenses and a challenging year or two ahead.
I’m not going to list out the statistics – because frankly, they are pretty grim! It’s enough to say that money is worth less, wages aren’t going up enough, and the cost of living is skyrocketing.
The good news is we don’t have to sit back and be victims of this. We know that tough times are on the horizon for everyone. So now is the time to take steps to strengthen the resilience and preparedness of our organisations and have a plan in place for dealing with this potentially difficult economic period.
Getting ready for a recession
During the last major recession in 2008, charities suffered somewhat. Data from a CAF report suggests that donations dipped by 11% during the 2008 recession.
That doesn’t mean you have to despair, though. The data found that despite the challenging times over half of UK adults continued donating to charities during the lean times.
Remember that the 2008 recession was caused by greed and human negligence largely.
That’s different this time. People are aware that other people are struggling and that the causes can’t be pinned on an elite like bankers. People feel a higher degree of social responsibility, so hopefully, donations will stay at a similar level this time around.
So what can your charity do during the coming weeks and months?
Stay relevant and visible
Now more than ever, charities need to get their messages out there and be crystal clear about why they are relevant and essential to continue supporting.
This is easy if your organisation helps people directly associated with the cost of living crisis – people understand the value of food banks, for example in this situation. It may take more creative thinking to stay relevant as a charity working in other areas. But the important message to communicate is that times are tough and you need ongoing support to keep moving towards your mission.
People will be making hard choices with their money, and charities that are not able to adapt are likely to struggle to make an impact.
Show why you are relevant, and why you are deserving of the money. Think about how the current situation is affecting your donors and those you work with.
Communicate the impact and show that you are sensitive to the current conversations and challenges.
Accept it’s an unequal playing field – encourage larger gifts
We may not like it, but it’s important to be realistic. We don’t live in an equal society. While huge portions of the population are suffering from poverty, many people are earning more than ever before.
Charities and non-profits have noticed this trend for years – where they may be receiving fewer donations, but the size of larger donations can become a sizeable portion of their incoming capital.
It can feel uncomfortable and wrong but it’s important to remember that not everyone is in the same boat. For this reason, you need to take steps to encourage the largest donation possible from your donors. If people have more money to give, then they should be encouraged to do so to make up for the shortfall from those who have less to give.
Press the message that now matters more
People are undoubtedly aware that times are extremely tough. It’s on every news bulletin and it’s a part of the conversation at the moment.
The good news is that this intense focus can actually make people who are inclined to help out be more likely to step up to the plate.
There is a sense of urgency to help out during times of crisis and need, and donors may feel more responsibility to help out however they can.
The spotlight is on the cost of living, so people are open to the conversation that everyone is struggling and that charities are likely to be struggling too.
Be sure to stress the extra importance and amplified need for help and support during these times of crisis to tap into this natural urge to help.
Buy the dip
There’s an idea in investing which is all about doing the opposite of what the majority are doing.
Billionaires make purchases that seem to go against the narrative during challenging times.
These decisions work out because they are thinking of the long-term rather than the short-term. They are playing a different game to the majority and so they have often bought lots of assets that grow in value when the good times finally return. They are accepting tough times in the short term, in exchange for longer-term growth.
It’s worth seeing if you can think in similar terms about your organisation. Unless you have to, now is not the time to slash your marketing and activity.
This too will end, and remember that keeping things moving at this point of crisis can have big effects when things bounce back.
Don’t make people feel guilty
Generally, people are doing what they can, and responsible organisations should not be piling on the concerns to people who can’t afford to help more.
Be sensitive to your donors’ personal concerns and be careful not to push too hard or emotively. The CAF report from earlier found that people continued to give what they could during the 2008 recession.
It’s also well established that making people feel bad and guilty is a bad tactic that can hurt your long-term strategy. It makes them more likely to defend themselves and become hostile to you.
I’d love to keep adding to this list if you have any more ideas that you think can help other charities and non-profits make it through 2022. Feel free to drop them in the comments.
Until next time,