Could This Be a Good Time for Fundraising? Surviving the Financial Crisis

There are jobs that are recession proof—teaching, health care, some technology, undertakers.  Their work will continue despite a downturn—a severe downturn—in the economy.  And then there’s us.  When money is tight, entertainment budgets are often the first to go.  So there go ticket sales.

Unfortunately, a bad economy doesn’t just affect ticket buyers.  Corporate sponsors, donors and foundations are also feeling the squeeze in decreased earnings, decreased interest, and devalued investments that they rely on to finance their funding.  There goes unearned income too.

Will nonprofit arts organizations be able to ride out this bad economy?  Debate in forums such as the Chronicle of Philanthropy online is strong on both sides.  The good news—if there is any good news—is that some experts think that giving will at least remain steady.  The bad news is that some others think that fundamental changes in the way that nonprofits are financed may be ahead.  Not all nonprofits will make it through to the other side and, some think, maybe not all of them should.  Like their commercial counterparts, nonprofits should deal with some competition in the marketplace.  If there’s no market for their services, or their target population is overserved, economics might dictate who survives and who doesn’t.

So, what’s the best way to survive the worst economy in decades and possibly a complete change in how nonprofit financing works?  The answer is to look internally.  Nonprofit organizations with the sharpest sense of who they are and what they do will have a fighting chance.  If a nonprofit can convey a clear mission and argue that its target population will go unserved without its programs, that organization is likely to find sources of funding. In other words, know who you are, what you do, and be as unique as possible.  Create a thorough list of questions (or contact me for one) for your board and staff to discuss where you are, where you’re going, and who you know that can help you to get there.

I also recommend, even during this bad economy, that arts organizations continue to seek new sources of funding from foundations and corporations.  But—and here’s the weird part—don’t expect to get it.  A large part of fundraising is socializing and persuasion.  Often, even in a good economy, a funder wants to get to know a nonprofit organization before committing to a significant grant or gift.  Rejections to applications don’t always mean that funders aren’t a good match or don’t understand or care about your programs; they often come with encouragement to apply again so the funder has more time to follow your organizational growth.  And you never know—you might impress some funders on your first try.  If not, don’t get discouraged by rejections or smaller-than-expected donations.  Use the bad economy as a time to build relationships, which is often a necessary phase of fundraising anyway.

So buck up and get to work.  Even though we’re not in an economic cycle where a lot of nonprofit arts organizations will grow, it is a good time for setting the groundwork for later growth.  Look inward, look outward, and start on the road to becoming stronger and more secure in the future.

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