The future of fundraising

“Giving Plunges 6% in First Quarter” “Number of donors dropped by 5.3 percent”. “25 billion in lost revenue for nonprofits”

The headlines about the latest Giving USA study are scary, but do they portend an apocalyptic future?

Capacity Partners is encouraged that donations under $250 rose by six percent during the first quarter of 2020. We also know of some nonprofits that saw their coffers swell during the pandemic; organizations providing disaster relief and pandemic-related services have seen a surge in generosity. Organizations focused on racial equity are also seeing an upswing in contributions. Of course, other organizations are realizing mergers might be their only salvation as they watch income plummet.

Foundations are still making grants, but many are shifting funding to emergency relief for basic human needs, making it harder for arts groups to get funding.  Organizations who were hoping for a grant for projects such as strategic planning may also find it more difficult to get support.

So far, virtual events are more successful than anyone thought they would be.  Hopefully that stays true as virtual events remain the norm for the foreseeable future.  It is difficult to imagine any in-person events being held for the rest of 2020, and maybe even the first part of 2021.

Right now, the rising stock market should result in major donors feeling comfortable keeping their commitments, but as we know from past experience, the market is capricious and as the economic recovery chugs along with a high unemployment rate, that could change. As furloughs become layoffs and as special unemployment benefits run out, budgets could tighten with less money available for charitable giving.

Fortunately, local and federal government grants and loans have kept many nonprofits whole in FY21; the question is what happens in FY22 as disaster relief programs end and government budgets are slashed due to revenue shortfalls.

In general, most corporations will be decreasing contributions, either cutting out all or a portion of many of their sponsorships. Capacity Partners predicts the effect on revenue will likely be in the second half of the fiscal year.

So much about future fundraising is uncertain; actually, so much about the nation’s future is uncertain. Covid-19 will be forefront in everyone’s minds for many months. The economy will remain fragile until coronavirus is controlled. Politics and the November election will generate stress-inducing headlines. All this is true, but equally true is the remarkable power of resiliency, caring, and determination.

Our advice? Stay close to your best donors. Stewardship is more important than ever. Don’t forget to give some of your attention to new donors, too.

In 2019, even though it feels like a lifetime ago, charitable giving showed solid growth, climbing to $449.64 billion, making that year one of the highest for giving. Capacity Partners believes that in good times and in bad, people will donate to the causes they believe are critical. Mary Robinson, Founder and President of Capacity Partners says, “Yes, even in a pandemic and in a period where unpredictability is the only thing one can accurately predict, people will give to the causes they care about.”

In a couple of weeks, we will be conducting a survey of nonprofit leaders to enable us to do a deep dive into the current state of the nonprofit sector in the DC metro area. We hope you'll participate in this brief survey so we can better understand the current situation and make recommendations to nonprofits as they navigate these unprecedented times.


Fundraising in these unsettled times

The world feels unsettled as our news feeds and lives fill with protests against pervasive racial inequity, a powerful and capricious virus that affects nearly everything, and an economy officially in recession. As nonprofits know better than anyone, this is a situation ripe for an increased demand for services while boards of directors and development staff fret over fundraising. Here are some tips to help you and your nonprofit organization raise the money you need.

1) Tell your story well and tell it often. Your donors -- both individual and institutional -- need to hear how you are making a difference under these unique circumstances. Use a variety of methods -- emails, social media, videos, Zoom calls, phone calls, etc. While it's always important to be a good donor steward, it's especially critical in uncertain times like these.

2) A matching gift can boost fundraising efforts. Perhaps your board will chip in to create a matching gift fund. Perhaps a long-term contributor will agree to a matching fund. The prospect of doubling a donation may help motivate on-the-fence supporters.

3) Avoid emergency, desperate requests for funds. You may not be sleeping as you obsessively pore over spreadsheets, but this is not the moment to share your anxiety with an anguished plea for money. Convey realistic optimism rather than panic.

4) Don't pre-judge your supporters. Don't assume they no longer have funds to give or won't appreciate hearing from you. Give your contributors the chance to show you how much they treasure your organization's mission.

5) Focus your time and efforts on current or past donors.because some organizations, especially those not providing direct coronavirus or racial inequity services, may find it more difficult to attract new donors right now.

The last three months have shown how many organizations are continuing to raise money effectively. Some are even surpassing their goals ... and not just disaster relief organizations. Some of our clients' events are hitting record highs, and some are getting generous grants. Unfortunately, some nonprofits are still having a tough time. Recovery will be an ever-evolving process so stay nimble — and ask.


Big challenges and big opportunities for the arts community

The arts have never been more important than they are today. They bring joy, act as a healing force, and educate the young and old. The arts are a key component of the economy and an important community partner as we recover and reinvent our world after the pandemic.

On May 22, Capacity Partners Founder and President Mary Robinson was honored to join Anne Corbett of Building Creative and Linda Sullivan, President & CEO of ARTSFairfax  for an ARTSFairfax webinar focused on planning for what’s next in the Fairfax County arts community in the wake of the COVID-19 pandemic.

The challenges that organizations have faced over the last two months are extreme.  Arts organizations, and really most nonprofits, are losing revenue, facing staff layoffs, and shifting strategies in how work gets done.  However, with every challenge comes an opportunity.

As Mary Robinson noted during the webinar, to maintain organizational viability over the long term, organizations should use Dynamic Planning to create three, six, and twelve-month plans. Starting with the formation of a Dynamic Planning committee, organizations would then use the iterative Dynamic Planning process to reaffirm their mission, asses their strengths and weaknesses, and conduct scenario planning, identifying multiple scenarios and solutions.

For example, Capacity Partners client Arts for the Aging was committed to keeping their teaching artists on salary during the pandemic, despite cancelling all in-person workshops. The team of teaching artists has now activated multiple distance and virtual programs to continue serving their audience of older adults and their caregivers. Although the method of program delivery has changed, Arts for the Aging’s mission remains front and center.

Anne Corbett stressed arts organizations have a unique opportunity to be leaders in community resiliency and reinvention, utilizing multiple partnerships, audience engagement, and advocacy opportunities.

Some of the ideas discussed on the webinar include:

  • Partnering with a food bank to include art kits in food boxes
  • Partnering with real estate developers to bring outdoor art or performances in a socially distant and safe manner
  • Producing virtual theatre or art shows and partnering with a restaurant or catering company to deliver a meal to patrons participating at home. (This would also work for virtual fundraising events.)

Webinar participant Lisa LaCamera, Senior Director, Communications & Marketing at Wolf Trap Foundation for the Performing Arts, said, “People are realizing the healing nature of the arts in times of crisis. People all over the world appreciate the need for the arts to get through this.”

Capacity Partners encourages arts organizations – and all nonprofits – to embrace the opportunities, confront the fear, create the plan, and move ahead to our next normal. The canvas of opportunity lies in front of all of us, and Capacity Partners stands ready to support you if you need a jump start.


How Dynamic Planning Can Help you Chart a Course During this Unprecedented Time

Dynamic PlanningBefore coronavirus, a strategic plan was enough to navigate the future, but now that we’re dealing with a pandemic and recession (or even a depression), nonprofit leaders need a different way to think about planning that builds in the agility and creativity required during these extraordinary times. And that different way is the fast-paced, flexible Capacity Partners® Framework for Dynamic Planning.

Dynamic Planning sets up a process of regular reassessment during a time of significant change; COVID-19 now, but it could also be unexpected leadership turnover, security breaches, or a sudden major drop in funding. It may seem like two steps forward, one step back for a time, but through an iterative process, boards of directors and staff can use Dynamic Planning to lead their organizations through a rapidly-changing environment and onto the “next normal.”

We’ve identified four stages in Dynamic Planning. In Stage One, you quickly develop a Response Plan that enables your organization to react to a crisis in a purely tactical fashion. While Mission, Vision, and Values still ground your organization, this is the “oh no, what is happening?” stage. During the current COVID-19 crisis, organizations transitioned to telework, assessed cash flows, and set up a response team to keep the organization functioning.

Some organizations are now in Stage Two, or Monitoring. During this stage, you remain flexible to manage ongoing change and adjust your response plan quickly. Focus tends to be operational, and board leadership is critical as your organization figures out funding and strategic direction. You may need to make hard choices about staffing and delivery of your services. Don’t forget to keep your funders and key stakeholders in the loop—communication remains vital to relationships, especially as you continue to pivot.

While adjusting operations and serving the immediate needs of your stakeholders can be all-consuming, at some point you must focus on your future—your “next normal.”  This is what we call Stage Three – Planning Ahead. For some, planning ahead will involve moderate changes to an existing strategic direction; others will need to reinvent their business models significantly.

Your board and key staff will create a series of scenarios based on hypotheticals about what the future holds and different courses of action. You will lay out plans for multiple options since projections in this unprecedented time will often be wrong. Will we have a winter spike or a quick vaccine? When will people be comfortable attending in-person programs and meetings?  Will the financial impact of one scenario vs. another be so great that we will need to revise our services, consider a merger, or dramatically reimagine our future?

The end result of this strategic thinking will be a Dynamic Plan lasting six to twelve months. Those organizations that think strategically and are open to reinventing themselves as necessary will be the ones that not only recover but rebound.

Finally, in Stage Four, Transition, you are ready implement the Dynamic Plan you created in Stage Three. Since the path of COVID-19 and the economic recovery remain so uncertain, you will likely unfold your Dynamic Plan in stages, staying flexible and prepared to pivot as the world continually changes.

Organizational VitalityAs you work your way through the four stages, it is critical that you examine the impact on all facets of your organization, including your culture, stakeholders (board, staff, donors, volunteers, and clients), fundraising, finances, marketing, communications, programs, and technology. As part of our Dynamic Planning Framework, Capacity Partners has created pragmatic worksheets for every stage of the process.

Through Dynamic Planning, your transition will be based on clear thinking, and like a sailboat, tacking to your ultimate destination, you will arrive at a future that advances your mission and enhances your organization.

Capacity Partners’ expert consultants can help your organization use Dynamic Planning to ensure your continued success during these unparalleled times. For a copy of our worksheet or more information on our services, please contact us at info@capacitypartners.com or (240) 462-5151

 

(And click here if you'd like to listen to a short, informative webinar on Dynamic Planning in the Time of Covid-19 and Beyond.)


Crafting your spring appeal during Covid-19

By Capacity Partners Consultant Kristen Engebretsen and Capacity Partners Associate Stephanie Hanson

 

In January, you had just come back from the holidays, and planning for your spring appeal was well underway. Now, after a month of fundraising during a pandemic, you’re likely asking the question, “Should we still do a spring appeal, and if so, how?”

Capacity Partners recommends you should still raise funds through your annual spring appeal, especially if you have not yet reached your goal. However, your messaging may need to change, and how it changes depends on your organization’s mission, sector, and whom you serve.

Here are a few strategies and tactics to help you build a successful campaign:

Keep your message positive and place impact front and center. It is important to acknowledge the strange and difficult times caused by the coronavirus pandemic, but you should be sure your overall message is positive. Even if your organization is in a crisis, link your appeal to your organization’s long-term strategy, using language like “with your support and partnership, together we can [fill in the immediate impact made].”  This is not the time to be fundraising for a special “nice to have” project. Instead, positively demonstrate both the need and impact while making a clear and compelling ask.

Join #GivingTuesday, the global campaign for charitable giving, for a special spring edition.  #GivingTuesdayNow is designating Tuesday, May 5, 2020 as a day of unity in support of the unprecedented need created by covid-19. Download a campaign toolkit, including ideas, graphics, and social media hashtags on the Giving Tuesday website.
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Play off the idea of spring rejuvenation with your appeal—spring is a time for growth, and flowers are still blooming, even in a global health crisis.

Think about whom you are trying to reach. Is a mail appeal and/or a digital campaign going to best reach your audience? While some of your donors are struggling, others are grateful to be employed and are looking for ways to give back right now. Look at your donor list and segment it according to which groups would be most receptive to an appeal at this moment. Consider using one of the many online giving platform options to get your message out digitally, and combine that with regular social media postings. Engage your organization’s board and closest friends to help push the message out.  Who knows – you might gain some new donors in the process.

Some funders are offering matching funds right now as a way to support their grantees. Contact your top ten funders and ask if they’d be willing to conduct a match with you right now. Or, look for local matching opportunities, like this impressive list from the Chronicle of Philanthropy.

Be sure to include CARES Act language and the new charitable tax deduction in your spring appeal, noting that all donors who give during this time will receive a tax break, whether or not they take the standard deduction. Specific language can be found here.

Capacity Partners is prepared to help you in any way we can. Our job, quite simply, is to help you do yours in this extraordinary environment.


Things you’ll need to apply for a Paycheck Protection Loan

You'll need to gather the following documents before you apply for your coronavirus stimulus Paycheck Protection Loan which is an SBA loan that helps businesses and nonprofits keep their workforce employed during the Coronavirus (COVID-19) crisis.

  • Payroll reports from April '19 through March '20 – both the total payroll numbers for those months and each month separately, as you have to load them individually
  • A picture of the principle owner's government ID
  • Date organization founded
  • Proof of EIN
  • NAICS number
  • CEO’s date of birth, Social Security Number, home address, and cell phone number
  • Documentation of health insurance paid and life insurance policies paid into
  • The last 4 quarters of 941 tax documentation


Emergency Grants for Operations Available

March 26, 2020

To our Friends and Partners,

I know that we all have received a huge amount of information in the last days about government support of the small business and non-profit community.

For Maryland non-profits with budgets of less than $5 million and less than 50 employees, we suggest that you take a look at the Maryland Small Business Covid-19 Emergency Relief Fund.  The State has allocated $75 million for direct payments of up to $10,000 to help organizations respond to Covid-19's impact.

https://onestop.md.gov/licenses?utf8=%E2%9C%93&q=emergency+small+business+grant

You will need to set up a registration before starting the application.  If we at Capacity Partners can be helpful to you in the process, please let me know.

Best wishes,

Barbara Wille, Partner Consultant


Leading a Nonprofit in a Pandemic

March 16, 2020

When times are tough, leaders step up. And these are unprecedented times. We are each called to be a leader now, whether in our roles as nonprofit executive directors, fundraisers, business owners, parents of young children, or children of older parents.

The path forward is unclear but the one thing I do know with absolute certainty is that the unique strengths of nonprofits and your steadfast commitment to serving our community will enable us to weather this crisis. Our nonprofit organizations will serve as bastions of strength in a wobbly world, and Capacity Partners is prepared to help you in any way we can. Our job, quite simply, is to help you do yours in this extraordinary moment in history.

How do you maintain community while social distancing? What are the best practices for donor stewardship during a pandemic? Are there tips to help employees, who now have children home for weeks, do their work effectively? How do you turn a live event into a virtual one?  Because the situation is incredibly fluid, solutions devised on Monday may be outdated by Thursday.

Below are some thoughts and ideas from some of our team members that we hope will help you.  Please keep sending me your questions at mary@capacitypartners.com, and we will respond.

Additionally, to assist our nonprofit clients, Capacity Partners would like to offer a free hour of consulting with one of our team members during the coronavirus pandemic. If you’re interested, please send me an email at mary@capacitypartners.com.  

Mary RobinsonCapacity Partners Founder & President

Ideas and tips for managing a nonprofit during this pandemic

The Capacity Partners team put their heads together (virtually, of course) and developed these suggestions for development, donor stewardship, communication, and management.

Donor Stewardship and Communication

  • The one lesson of the Great Recession is the importance of staying in touch with your donors. Email them, or better yet, call. Ask how they are doing. What do they need? Can your organization support them? If so, how?
  • Be in direct personal contact with your most important donors with a brief overview of the basics, including if you are closed, how staff is working, if your service area is directly affected, how you are maintaining the highest level of service possible, etc. Remember it is fine to admit you don’t have a particular answer or that your organization is still working to solve a problem. Asking your donors for advice will also keep them engaged.
  • During this difficult time, start gathering and collecting the stories of how your constituents are making a difference in others’ lives. You’ll want to share these stories in any post-crisis reports and in your annual report. The crisis will pass, but these stories of help, determination, and endurance will live on.
  • Most people want access and information — and if your organization can manage to give your closest friends important information it can strengthen your connection to them.
  • Be prepared for the question “What can I do to help” with both a volunteer option and a financial support option.

Industry-Specific Advice

While each organization has its own unique mission, here are some industry-specific tips for keeping your donors and stakeholders informed and engaged.

  • Healthcare and human services organization – Tell your community how you are responding and supporting the community through the COVID-19 pandemic.  Ask your donors to help you continue to serve our community during this stressful time when your services are more important than ever.
  • Arts organization – Can you uplift your community through social media or sharing performance videos on your website? If you have had to cancel performances, ask your ticket buyers to support the arts by donating the cost of their ticket instead.
  • Education – Discuss how you are transitioning learning to online platforms and ask your community to support this complex endeavor.
  • Environment – Give actionable and timely advice and tips for how our community can save, conserve, and share resources even in an unknown and shifting world. Remind donors the importance of your mission in good times and in bad.
  • Association – Provide timely support, news, and helpful resources to your members during this time. If appropriate, ask for support, but if your members are also nonprofit organizations, think about how you can help them increase their fundraising.

Fundraising

  • Be transparent and ask for financial support for what you truly need at this time – keeping people employed, emergency needs, etc. We’ve seen that if the request is for immediate, essential expenditures, organizations have been successful.
  • People are looking for ways to help, and when they can donate online, it can give them the opportunity to do something positive and community-centered. Giving to a cause they care about can provide a feeling of control during a situation that seems quite out of control.
  • How do you raise money when people are nervous? Many of your donors are watching their stock portfolios rise and fall with each new day. At the first turn of national good news — when the media announces a reduction in cases, when people begin to recover and return to public life from social isolation — that’s the time to be ready with your message:  “We are encouraged … our organization is even more committed to … we hope you will join us in … thank you for your continued support … etc.” Sensitivity, empathy, and timing are critical to ensure you get your contributions back on track.

Management

  • Communicate schedules and availability ahead of time, and if possible, try to find times each day to connect virtually with staff. Don’t forget to include your board, too.
  • Be creative in working with other organizations. Now is not the time to compete; now is the time to collaborate.
  • Lean on your trusted advisors – ask questions, test ideas, think long-term, and listen to feedback.
  • R​ely on the passions and instincts that brought you to this work and has kept you in it.
  • Use the time to plan and get done all those tasks that never seem to make it to the top of your list.
    • Make phone calls you’ve been meaning to make—thank you to board members, to a community friend who offered ideas or resources for a recent project; check ins with community members who’ve reached out are just some examples.
    • Dust off that strategic plan to evaluate the progress you’ve made and identify next steps.
    • Revisit your governance structure and update those board policies, bylaws, and succession plans.
    • Book that introductory phone call with an executive coach.
    • Send a hand-written note to a thought leader you admire who might just find your organization the cause she’s been looking for to support.


The M&Ms of Corporate Fundraising

Your house may be like mine. Every holiday, we have baskets of M&Ms all over the house. At Thanksgiving, we have orange and brown M&Ms; at Christmas, green and red. And this past Valentine’s Day…you guessed it, red and pink M&Ms. Even though they all taste the same, except when you venture into peanut, peanut-butter, mint, caramel and hazelnut, I credit Mars with making the ubiquitous little chocolates our go-to candy throughout the year.

There is a lesson here for nonprofit corporate support. Hint:  it is NOT to deluge your corporate sponsors with M&Ms. Although that may be a strategy for retention, you must first master the M&Ms of nonprofit corporate partnerships.

Although the marketing of your mission and message through various media merits mentioning as does your mindset, mentors, and the mind-numbing miscellaneous minutiae of macros and modifiers, more and more there are only two M’s that matter the most.

Metrics. Corporations love to show positive numbers. Everything is measured. If you have not yet embraced the power of metrics, this is a good time to do it. How many people do you reach, this year’s program completion rate compared to last year, how many different ethnicities, what are the results of your intervention, etc. These and other measures can determine not just how well your program is doing but also how well you will be funded. Outcomes based philanthropy means that everything – every program, event, volunteer training, publication – must reflect the measured accomplishment of your work.

Mirrors. Corporate branding increasingly means helping the company look good to its broadest constituency base. When corporate philanthropists place  your organization in the mirror, they insist that it must enhance their brand and reinforce their values. They report to their own board, investors, suppliers, employees, and above all, customers. They will carefully evaluate whether your organization can accommodate their branding needs. To the extent that you can help them look into that mirror with confidence, you have ensured that your organization stands a greater chance to retain their all-important support.

Metrics and mirrors. These concepts matter to the companies you are hoping to reach, and they will likely matter for many years in the future. When you remain close to your corporate partners, you will find more creative and relevant ways to market your mission and learn how to adapt your fundraising strategies to meet their seasonal needs, just as the flavors and colors of M&Ms adapt to each season. But if you prioritize your metrics and mirror M&Ms, you will fund your corporate stakeholders to be among your most loyal donors.


Encouraging your Board to Fundraise

We all want board members to help our organizations grow and thrive, and raising funds is central to every nonprofit's success. However, while our board members typically embrace their governing role, they are less frequently comfortable with fundraising responsibilities. It is not unusual to hear board members say they don't like asking for money, especially from their friends. Below are some ideas for helping your board understand that fundraising is more than just "asking" and everyone can play a role in successful revenue generation. These ideas are intended to help shift your board's perspective on fundraising and help them understand it’s something they can – and must – do.

1) Outline Expectations: Set clear expectations from the outset, beginning with recruitment of board members. Your Board Roles and Responsibilities document should clearly state that in addition to governance there is a financial responsibility of serving on the board. Include a goal dollar amount, either for each individual or for the board as a whole. You will need to work with your development committee to identify this amount and recommend it to the board.

2) Recruit Champions: Recruit people who are truly champions of your organization and who are respected in the community. These are the people whom others look to for leadership, have wide networks, and can provide validation for your cause. Find lots of opportunities to engage and showcase your enthusiastic board members. Enthusiasm is contagious.

3) Inform and Excite: Your board members said "yes" to serving on your board, so they have already demonstrated their enthusiasm for your mission. Board meetings can get weighed down with the business but be sure to dedicate a part of your meetings to something mission-related. Tell a story, show a video (taken on a smart phone), or bring a special guest to speak about the work. Be sure to keep your board engaged and up-to-date between meetings. Send a monthly update with highlights, stories or links to relevant work in the news. Board members are busy and having your organization top of mind helps them be better prepared to be a champion.

4) Make it Tangible: It’s easy to ignore fundraising when it appears all funds are for a general purpose. Yes, unrestricted dollars are critical. However, often board members and prospective donors need to have a better grasp on what can happen with dollars given. For instance, provide a tangible example: “If we can raise $50,000 then we can pilot the new program x that we’ve all been talking about.”

5) Make it Personal and Be Specific: Meet with each board member individually to set personal goals and outline specific projects they will work on. Everyone should have a fundraising responsibility, no matter what committee they serve. If everyone on the board is engaged in fundraising activities, and those activities entail roles they are comfortable with, it will become clear that fundraising is more than just asking… and fundraising becomes progressively less intimidating. You can work with each board member on the specifics, but roles can include:

  • A personal financial commitment
  • Hosting a "friendraising" event – work with the board member to set objectives and goals including the of number of attendees, specific follow up tactics and provide them the support they need to make the event and the outcomes successful
  • Accompanying staff to fundraising meetings
  • Making strategic introductions – staff can help brainstorm ideas and keep a running prospect list for each board member
  • Pro-bono support, if it relieves a budget item for your organization
  • Making thank you calls and writing thank you notes

6) Be Supportive: Be available to help your board members achieve their personal goals. Fundraising is hard. Don't let them get discouraged; give them the tools they need to be successful and don't expect them to be successful if they aren't supported.

7) Give them Ideas: Provide a funding prospect list to your board to scan through (ensure it is kept confidential) and see if they know anyone. If they do, ask if they will join you for a coffee with that person.

8) Share Gratitude: Say thank you. A lot. When a board member helps with an introduction, a solicitation, an event, or a project, say a very personal thank you to that individual and a public one at your board meeting too.

Remember, your board is there because they believe in your mission. Together, you can generate enthusiasm and revenue to achieve that mission. There really is no other way.