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  • Writer's pictureNonprofit Learning Lab

Preparing for a Recession: Survive and Thrive

Updated: Jun 9, 2023

How your Nonprofit Can Continue Serving your Mission Suring the Incoming Recession

This is a guest blog submission by Meredith Gray, Senior Marketing Manager, Keela

The impact of COVID-19 on the economy is significant, and all signs are pointing to an incoming recession. While we can’t know for sure what we’re getting into, we can look at the past and begin preparing for a recession with the information available to us.

During the Great Recession of 2008, total charitable giving dropped by over 7% and continued to decline until 2010. 7% might not sound like much, but when translated to dollars and cents, American nonprofits saw a decline of over $41 billion dollars between 2008 and 2010.

Yes, that statistic is right. Because of this loss in revenue, 13.5% of American nonprofits were forced to close their doors during the Great Recession, leaving a community behind that had been dependent on their resources. Sadly, these nonprofits were not prepared to weather the storm of a recession.

Any recession, no matter how big or small, will definitely have an impact on the financials of all organizations regardless of if they are a nonprofit or a for-profit. Roughly 9.6 million jobs have been lost during the COVID-19 pandemic, resulting in a significant impact in charitable giving, and also a huge increase in demand on the services provided by the nonprofit sector.

When looking more closely at specific organizations, a case study on the United Way reported a 68% increase in demand for their services specifically for those in need of food, warm clothes and shelter. The vast majority of that increase is linked to job loss and evictions.

Now, we’re not trying to scare you, but you did click this post to learn how your organization can begin preparing for a recession, right? Being prepared, learning from the past and looking at technology is a great starting point. So let’s get started!

1. Assess Your Current State by Getting to Know Your Stakeholders

Preparing for a recession starts with understanding the current state of your organization by diving deep into your revenue, costs, skills on your team and your stakeholders. The need to be nimble during times of crisis is critical, and having a deep understanding of these things will allow you to make quick decisions to address needs as they arise.

Understanding who your supporters are is vital to your success. Knowing what motivates them to give to you can help you create more personalized communications and strengthen your relationships. It’s important to understand your database and start stewarding your biggest supporters. These are the people that are going to get you through tough times, you can’t afford to lose them and keeping them engaged and recognized will motivate them to continue their support of your organization.

But how do you gain a deep understanding of your stakeholders with such a large donor database? Your staff and fundraisers need to find new and different ways to raise money. With a recession on our heels, there isn’t time or resources to do things the way you’ve always done them, so looking at what you already have available to you could be the key to your success.

2. Communicate to Your Stakeholders

You know how important your stakeholders are, but how do you communicate with them when times are tough? A large part of preparing for a recession is to make sure that your stakeholders are happy, engaged and eager to continue their support.

Be transparent: Update them on what you are working on and how you’re funding your mission. If you’re having to pause part of your mission to make it through, be honest about it, it could even inspire them to give more.

Keep them close to your mission: This re-assures them that their dollars are continuing to be invested wisely. Tell stories from your community and make sure they understand that you are continuing your important work, even during a recession.

Tell them what you need: Donors like to feel like they are saving the day. Being open and honest about the challenging times you are facing and why you need their help encourages a greater level of support.

3. Seek Opportunities to Strengthen Your Financials

Now that you have a clear sense of where you stand and plans for various scenarios, it’s important to consider the opportunities to mitigate financial risk and improve your short-term financial strength. This will look different for every organization, but a few options to consider are:

  • Looking at your existing vendor contracts to see if you can negotiate payment dates or establish a line of credit to support your expenses

  • Shortening the time frame of your cash-flow projections from 12 months to 3-4 months

  • Identifying flexible funding options to build up your reserves

  • Auditing all ongoing projects and looking for opportunities to defer smaller, non-urgent ones

Depending on your revenue during the recession, you may or may not need to put any of the above into effect, but by understanding where your opportunities for cost-savings are, you will be able to make quick, smart decisions should the need arise.

4. Find the Best Tools to Get You Through

There are tons of tools out there that can support you in raising more money. But looking at your team and your existing donor database (CRM), taking advantage of what you already have available to you could be the secret to preparing for the recession.

But with all those names, emails and information in your existing CRM, how do you know where to even start?

Integration into your CRM: It’s important to have technology with online giving options, especially post-covid and when preparing for a recession. The goal should always be to make it as easy as possible for your donors to give so having easy-to-use, visually appealing donation pages is crucial to increasing your online revenue.

Automation. There are tons of options to automate your stewardship communications, donor outreach and reporting. By automating as many of those functions as possible, your staff will have more time to do the things that a computer can’t do, like building those 1:1 relationships with your donors.

Tech options to increase revenue. Nonprofit software has come a long way and can provide valuable insights into your donors so that you’re never leaving money on the table. It’s important to determine how to best engage with every donor in your database so they stay and grow with your organization.


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