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Increase your spend on fundraising
| 2024-01-15
Giving In a Tough Economy: What Charities Can Do To Survive
As I’m sure you noticed, people from all over the country were encouraged to give back last week during GivingTuesday. Since its launch in 2012, charitable organizations around the world have raised billions of dollars from donors just days after black Friday. This year, GivingTuesday raised a record $3.1 billion for US charitable causes in just 24 hours which is incredibly heartwarming in this great time of need.
Many organizations take part and create campaigns centered around this charitable drive. Still, it got me wondering how the current economic situation in the US is impacting giving above and beyond GivingTuesday.
Between Covid, inflation, layoffs, and the looming recession, it’s been a perfect storm for what folks can give to charity. The uncertainty caused by all these issues is making Americans look twice at what they can afford to give. This creates a dilemma for charities as they compete against other causes to get donations from a smaller percentage of the population.
These factors often impact donations. For some organizations, while their monetary donations may slow down, their volunteering opportunities can often be filled by those who prefer to volunteer time versus money. Last week I talked to a friend who volunteers at a local animal shelter in her town. She told me that they have seen an uptick in volunteer applications for people’s time while simultaneously seeing a drop in funding and donations from the businesses donors that help keep their lights on. It’s heartening to hear that folks are still willing to donate their time even if they’re not able to contribute in other ways.
Related reading: How PR is Helping Charities in the Time of COVID-19
How did previous recessions impact giving?
There are other examples throughout our history that we can look at to see how charitable giving was impacted during those eras. In looking at the impact of the 9/11 Recession and the Great Recession of 2008, some trends often repeat themselves.
During economic downturns like the time after 9/11, average giving to charities decreased by 0.5%, which reflected people having less disposable income and job security. The Great Recession of 2008, on the other hand, was more extreme. Total charitable giving in 2008 was down 7.2% for the year.
Diving a little deeper into the “why” people do or don’t contribute to charities during recessions, the link to after-tax income is indisputable. If you got laid off, had your salary cut (or your wages have remained the same) while inflation skyrockets, the likelihood of having leftover money for charities is diminished. Others use the stock market as their barometer for charitable giving. When their portfolio is up, they potentially give more, and conversely, when the market is down, they give less.
On the other hand, I know people who will go the extra mile to continue donating to causes important to them (like their church kids’ school and others). They will literally pinch pennies and eliminate things like cable TV to continue contributing to their favorite causes.
Another interesting point I read about regarding the Great Recession of 2008 was that although overall charitable giving dropped, contributions to essential service organizations like food banks grew. People who might otherwise contribute to their college, political candidate or other organizations instead decided to funnel their money to more short-term, immediate needs like food or health-related services for those in need.
Strategies for fundraising when times are tough
Whether you’re a small organization that relies on fundraising and donations or a public relation (or marketing communications) pro responsible for getting a charitable message out to the public, there are some things you can do to improve your success.
- Tap into the power of ‘social good.’ Social media has been a game changer for charitable giving, as most of us check it out multiple times per day. This is an excellent vehicle for getting your message out there. If impactful, the opportunity for that communication to be shared among the online masses is invaluable. Nonprofits experienced remarkable digital growth in the last few years. According to Blackbaud, online giving increased by 42% from 2018-2021. And 12% of all giving now happens online, up from 8.7% in 2019.
. - Honesty is key. When delivering your message on behalf of your charity, telling it like it is makes sense. I’ve gotten communications from local charities (that I’m not even sure are legit) where they basically beg for funds just to keep their doors open. This is not an appealing message, in my opinion. Folks respond more to messaging that is positive and forward-looking. Obviously, every financial situation is different, but I find the best charitable messaging involves explaining the cause quickly and how my donation can make a difference.
. - Be realistic. Exaggerating about your charity or cause can negatively impact your bottom line. Being realistic in all your communications to your donors is imperative to keeping those relationships. Letting people know the true state of your charity regarding things like funding is critically important. Setting attainable goals, and communicating that clearly to donors and employees, is a great way to build a solid foundation for your charity. Think about your mission statement (if you have one) and stay true to that always.
. - Utilize the year-end timeframe. Did you know that the end of the calendar year (from GivingTuesday through New Year’s Eve), often referred to as the “season of giving,” is the most crucial time for charities?
- Nonprofits acquire ten times more donors on GivingTuesday than any other day of the year