5 Questions for Your Nonprofit's Recession Plan

Nonprofit organizations are just like any other business when it comes to preparing and making decisions in a recession. With news of inflation and market fluctuations, there is an expected negative impact on the economy and potentially on philanthropic giving. But, the ongoing uncertainty need not be cause for panic - there are several strategies your staff and your Board of Directors can take to be prepared. We learned a lot about philanthropy by analyzing nonprofits’ responses in the pandemic - we can apply those learnings toward nonprofit recession planning and pull through this second crisis.

Upswing or Downturn: How to Make Your Nonprofit Ready for Anything

Catchafire's in-house nonprofit experts and advisors are on-demand to provide advice, feedback, and decision-making support as you prepare. Here are 5 essential nonprofit recession planning questions we've put together to guide you.

1. How does the current state of the economy impact fundraising strategy?
   

What does nonprofit recession planning mean for fundraisers? It's time to ramp up your fundraising efforts in anticipation for a greater demand and need for your nonprofit's programming and services.

Fundraising should be one of your biggest priorities as you develop a plan for protecting your programming and staff. There are various strategies you can employ. For individuals or departments focused on development and fundraising, you should focus on a comprehensive fundraising plan with multiple sources of revenue (a diverse blend of individuals, foundations, government entities, and companies) to ensure sustainability. Set fundraising and financial goals that take into account the risks and opportunities around the current economy. Create contingency plans with your staff and stakeholders, and be prepared to pivot your strategies. Your fundraising plan is a roadmap that creates the infrastructure and vision, with room for flexibility as conditions change.

Database management is vital. Review your operations and CRM database to analyze your donor portfolio. Use this information to update your strategy; you may want to run reports on specific sets of donors and revenue streams to determine where to focus your staff's energy.

Focus on donor relationships and retention; involve your donors through personalized communications that make them feel included and motivated to give. During a recession, donors will most likely contribute to less organizations. It is more crucial than ever before to have a solid ask and case for support. Keep them updated on your organization’s progress and how their donations are being used. Let them know how their support is helping to make a difference in the community.

As your fundraising strategy and nonprofit recession planning evolves, just remember: the recession is not permanent.


2. How should I adjust donor communications?

When it comes to donor communications and strategies, donors appreciate transparency. Be honest about the organization's financial situation and ask for money. You won't receive donations if you don't ask! It's important to convey empathy and understanding around potential money constraints due to the recession, but fundraising is still necessary. This is not the time to ask less frequently for money unless your organization does not have high financial need, is planning to funnel donations to another community partner, or you anticipate having to shut down your programs due to a change in demand.

Think through the story you can tell donors in your request for support. Is there an increased need in the community? Are you anticipating the recession and preparing so there’s no gap in services? Do you need to keep doors open? Name the need and demonstrate the impact a contribution could have. This can motivate and inspire your donors.

Have a brainstorm session with your staff to visualize new, creative ways to ask for support. Focus on conveying a sense of community with your donors. Leave no stone unturned -- test a new email subject line, send handwritten postcards, or try out a text to donate platform. The sky's the limit.


3. How can I motivate my staff and calm fears of layoffs?

This is a key part of nonprofit recession planning. Whenever there are economic issues, there is always a negative impact on staff morale. Retention and staff morale are critical. Surprisingly, nonprofits had an increase in jobs during and after the last recession. Your team is looking to leadership for honesty, stability, and support. Focus on building staff relationships by providing moments of inspiration that make every work day motivating.

First, make sure you understand your organizational budget and financial situation. What is the likelihood of layoffs, and what would it take to get to that point? Does the organization have reserves, and what is the bare minimum it needs to make to keep doors open?

Second, make sure you are communicating to your staff so they are aware if there are actual risks of layoffs. Communicate the organization's financial prognosis and what its priorities are at the moment - does everyone need to pivot to fundraising to keep the organization afloat, or is everything actually okay? Empower your team by providing the financial and organizational information they need to feel secure and focused on their jobs. Connect everything back to your mission and the big picture - how does your everyday work make an impact in the community?

What not to do: ignore the issue or avoid taking time to explain the situation across the company. This creates a culture of fear. It's okay to acknowledge that time is needed to process the ramifications of a recession. Stay in touch with your colleagues throughout the process.

Don't forget to take care of yourself in the meantime. Recessions and all of the associated planning can be scary on an individual and organizational level. Take care of yourself and your staff to avoid burnout. At the end of the day, we're all human.


4. What change should I anticipate in volunteer management?

Take a look at your audience demographics. Are your volunteers part-time or full-time? Do your volunteers have children or other familial obligations? Some volunteers may be minimally impacted, while others may get laid off from their jobs. This could mean that they have more time to volunteer as they try to build their resume and skills in between jobs.

Again, communication is key. Check in frequently with your volunteers to see how they're doing and what their availability looks like. It's important to analyze where there may be gaps in your volunteer support, so you can adjust your volunteer retention strategy. Adjust project deadlines and workloads accordingly.

You can never go wrong with clear, consistent communication! Just like your staff, provide your volunteers with inspiring anecdotes and convey how their work impacts the community. It will keep them engaged and returning to work on additional projects. A little encouragement goes a long way.


5. How do I create a recession strategy or some kind of resiliency plan?

While the future always has some uncertainty, you don’t have to feel uncertain about the future of your organization. Catchafire's recession planning project bundle helps you strategize and plan ahead so that your organization can be as resilient and sustainable as possible. Our team of nonprofit experts is with you every step of the way to brainstorm, answer questions, and help you navigate organizational challenges.

Nonprofit recession planning provides you with the opportunity to adapt your strategy and plan ahead.

Sometimes it helps to take a step back and brainstorm before making any decisions.

• What are your organization's core priorities? Has this been conveyed by leadership to staff and donors?
• What are your needs and strengths?
• What programming would you increase, pause, or adjust during a recession? What would you need to adjust in the organization to make this happen?
• What adjustments need to be made to your programming? Staff? Communications? Revenue?
• What do you wish you had known about pivoting your organization before COVID? How can you apply those learnings now?
  

The philanthropic community is strong. Nonprofit organizations are resilient. Nonprofit recession planning provides an opportunity for reflection, analysis, and growth. Lean on your community and talk to your leadership, peers, nonprofit partners, funders, and Board members about how they can help support your mission. Give yourself and those around you the grace that you’re all humans trying to figure this out and ensure you can work towards your mission - not only during the recession but for many, many years after it.

What Nonprofits Can Do to Prepare:

Here is your nonprofit recession planning checklist:

1. Review your budget. Make sure it's realistic and takes potential revenue shortfalls into account.
2. Create a financial emergency plan.
3. Review all of your programming to see if any services need to be adjusted.
4. Keep your donors informed. Keep communication open with your donors and supporters, and let them know how their contributions are helping.
5. Fundraise aggressively to maintain or increase your revenue stream. Build up your rainy day fund to help cover unexpected expenses.
6. Develop partnerships with other nonprofits and community partners to share resources.
7. Stay motivated - Direct your energy toward the mission of your nonprofit, and keep your Board, staff, and volunteers motivated. Provide anecdotes and data from your programming to keep them encouraged on why they do this work.
8. Remember that recessions are cyclical and things will eventually improve. Nonprofit recession planning doesn’t have to be a bad thing. It gives you and your organization the opportunity to reflect, learn, and grow.
   

Nonprofit Recession Planning With Catchafire

Recession planning doesn't have to be challenging or impossible -- Catchafire's recession planning bundle provides you with the tools you need to get started. Create and execute a resiliency plan that will strengthen your organization for the foreseeable future. Our webinars provide tips and industry insights you can instantly apply to your work.

Here are additional resources from our team:

• Nonprofit Quarterly - Nonprofits in Recession: Winners and Losers
• Nonprofit Risk Management Center - Sustaining Nonprofits During Economic Downturns
• Federal Reserve Bank of Minneapolis: The Recession: Good for Nonprofit Employment?
• Philanthropy News Digest: Nonprofit Jobs Increased Throughout Great Recession
• A Three Year Study of the Nonprofit Sector’s Response to the Economic Challenges in Six Cities Across the Nation
  

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