By Craig Shelley
While I recently shared some thoughts on fundraising during unprecedented times, economic circumstances have changed in a way that presents an environment where we have tangible and historic experience to draw upon. While the economy has not entered a technical recession, and economists never declare a recession until we are already in it or even after recovery has begun, we can draw on lessons learned in past recessions to inform our current approach.
I’ve been actively leading, advising, or raising funds on behalf of nonprofits during three recessions – the Dot-Com Recession (March 2001 – November 2001), the Great Recession (December 2007- June 2009), and the COVID-19 Recession (February 2020 – April 2020). Each had unique causes, attributes, and impacts on giving. However, there were also some clear similarities.
Decreases in giving lag, decreases in the market.
There are many potential reasons for this including continuation of existing pledges, psychological denial that a recession has begun, and a commitment to help those in need during difficult times. While this is positive for nonprofits, it also tends to give leaders a false sense that the recession won’t impact them. “The market is down, but my giving remains strong,” is a common refrain in these situations. Be wary; the other shoe will drop soon. If you believe a recession is imminent, act as if giving is constricting already.
Giving recovers when the market recovers.
There is not a corresponding lag when the market rebounds. Recessions tend to sneak up on people, but recovery comes with great fanfare and with people eager to return to their prior spending, including contributing to nonprofits and causes they care about.
This economy might be different.
While experience in three recessions leads me to believe the above will likely hold true, this economic downturn and potential recession is unique. While the others resulted from immediate shocks in the market following long building bubbles and long-term impacts from longstanding policies, what we’re experiencing now are people reacting immediately to policies they suspect will cause economic pain. Significant and rapid cuts in government spending, the anticipation of federal austerity budgets, and tariffs are playing out fast and in public. Anecdotally, you can see donors starting to hold back. Not behind the market, but in time with it. This follows a tightening in giving that began in the run up to last year’s Presidential election and then a post-election period where giving ticked up again. There’s every reason to believe that giving will recover in time with the market, but giving does seem to be tightening in time with the downturn, unlike prior recent recessions. Even more reason for nonprofit leaders to be cautious in their spending and aggressive in their fundraising.
Communicate with your donors.
This is evergreen advice in any economic environment. You must be communicating clearly and consistently with your donors, especially right now. Donors suffer from recency bias. As they experience an uncertain economy, you cannot predict when or how they will give. Your best bet is to be top of mind with the stories and successes that make your work most compelling. Do not focus on the negative. They only need to watch the news or their own portfolios to understand the financial constraints you are working with. But be sure they understand the urgency and unique skills and interventions your organization can bring to the world right now.
Be mindful of how your donors and prospects are experiencing this economy.
Don’t ask the CEO of Ford for a gift the day he finds out tariffs will force changes to his whole supply chain. Don’t ask a stockbroker for money the day the market drops 10%. Understanding the world around you and how your donors are experiencing it is another example of evergreen advice that is even more important in our current rapidly changing environment. Check the headlines prior to your meetings and seek to contextualize the news from their perspective. That said, sometimes you need to ask anyway. Be smart. Adjust schedules and days but under no circumstances do you stop soliciting. I was running a fundraising dinner honoring leaders of Bear Stearns in early 2008. The timing could not have been worse for them or for the constituents most likely to support an event in their honor. But we pushed forward. We didn’t have the best results ever, but we had the best results we could under the circumstances.
There are opportunities.
First and foremost, in any economy someone is making money. Understanding who they are and targeting them accordingly is a skill. But there are other tools available to you even if these donors aren’t. Campaigns are purposefully spanned over a period of years to ensure you capture economic swings both good and bad. Downturns and recessions are shorter than ever, so whether your campaign started a year ago or starts in six months, you are likely to catch both good and challenging economic circumstances. Planned giving is another great opportunity and now is a good time to discuss gift planning with donors. Yes, people are feeling poorer now than they did one year ago. But they are likely wealthier than they were three-years ago and will be wealthier again three-years from now. Committing assets rather than cash and on a longer time horizon is something donors may be more comfortable doing right now rather than committing cash.
Ultimately, economic uncertainty is not a reason to retreat — it’s a call to lead. History shows us that resilience in fundraising isn’t about predicting the market, but about preparing for its shifts, staying close to your donors, and remaining steadfast in your mission. Don’t wait for clarity to act. Be bold in your outreach, creative in your strategies, and relentless in your storytelling. This is the moment to show your donors that your organization not only endures uncertainty — it rises through it.