Nonprofits and other types of social enterprises are concerned with the impending recession. Inflation is rising, and it appears that it will continue to worsen. The stock market feels out of control, and donors and investors may feel distant and concerned.
When you’re a leader in the trenches, it can feel like there’s no way out. Like you are trapped with no place to escape.
In times like these, it’s important to remember that you’re not alone. You have a team of people behind you who are just as committed to making this world a better place as you are.
And if that doesn’t make you feel better, maybe this will: there’s one thing we can all agree on: we need each other more than ever. We need each other to keep our spirits up and keep going when things get tough.
What should social enterprises do?
1. First things first, accept the fact that we are in a complex economic environment.
GDP is falling, but so is unemployment. It’s an interesting combination of growth and constraint. There’s also an unprecedented amount of cash on hand for large businesses and increased demand and expectation for companies to fund social impact. In order to take advantage of this, you should…
2. Position your organization as an impact investment.
In case you haven’t heard, donors and investors are hungry for impact data and need your organization to provide it to them. With so much money on the sidelines and few places to put it to work, it’s paramount you learn how to communicate your value to your target donors.
How to communicate your organization’s impact:
- Position your organization as an investment
- Communicate the short and long-term effects of your programs and services on your stakeholders
- Publish quarterly reports on how your organization makes an impact
- Communicate your impact via email, social media, webinars, and more
3. It’s time to go on the offensive.
Good things happen to those who wait does not apply. If your organization has legitimate impact data, product-market fit, and traction, it is time to accelerate your fundraising efforts.
Where should you allocate your fundraising efforts?
A few questions to ask yourself first:
- Who are your primary types of funders (High net worth donors, family foundations, granting organizations, etc.)
- What are your most impactful programs and services?
- List them out
- Explain why they are most impactful
Remember, your donors want to scale their impact, and they view you as a means of doing that. They need to know that you are impact focused and data-driven.
Do you have the data you need to take your impact to the next level?
Now that you have listed your primary donors and most impactful programs let’s map out where future revenue will come from.
Choose two target audiences from the list below. These are the people who are going to fund your organization’s growth. It’s crucial that there is alignment between your organization and theirs. Choosing more than two is tempting, but start small and stay focused.
- Granting organizations
- Corporate grants
- Family foundations
- High net worth donors
- Millennials and Gen Z
If you are unsure how to find the right corporate donors and granting partners, use software platforms like CauseIQ and Candid. These platforms can provide you with the information you need to create a list of target foundations that can help you scale your impact with ideal impact partners.
What about my existing donor base?
Your current donors will be the lifeblood of your organization’s needs to weather any storm. In fact, focusing on donor retention is one of the best ways to stabilize your revenue and continue providing services to your constituents. You should absolutely invest time and resources into nurturing your existing donors as you also work to expand your donor base.
How to navigate the relationship with your donors
If you’re donors stuck with you throughout the COVID-19 pandemic, they’ll likely stick with you throughout anything. Still, it is essential to communicate clearly, reduce unnecessary costs, and increase fundraising revenue.
If you haven’t already, it is time to:
- Create a recurring revenue model for your nonprofit
- Double down on effective online fundraising
- Legitimately measure your impact
- Communicate your organization’s impact with an Impact Report
- Inform donors how you are navigating high inflation, all while providing services to your constituents
The past few years have been rough for nonprofits and social enterprises. We’ve seen budgets slashed, donors disappear into thin air, and investors pull out of the market entirely.
We know the economy is complex and concerning, but we know there are millions of passionate people who want to make a significant difference in society. And we know that when it comes down to it, people care about doing good in the world, so they’ll support it when they see that their money is making an impact.
Your stakeholders and constituents depend on you to guide them down the right path. Your donors need to understand the impact your organization is making AND how you are navigating dynamic economic environments.
As Ann Mei Chang so wonderfully put it, “impact is the destination, innovation is the path.”