The End of Fundraising

by Andrew N. Robison, President of Petrus Development 

Fundraising, at least the way we used to do it, is OVER.

Let me explain. Before the world shut down due to COVID-19, I was training for the grueling Texas Half Ironman. I was dedicating hours of my life to running, biking, swimming and trying not to die in the Texas heat. And then the race organizers canceled the race. I was disappointed - no I was crushed - but in hindsight it gave me an opportunity to hyper focus on Petrus and more importantly, our clients. Adjusting to quarantine, helping to homeschool young children, planning our Virtual Summit and Virtual Conference, and lamenting a canceled race sapped all of my time and motivation and my training came to an abrupt halt.

One day off led to a week, then a couple of weeks, and eventually I realized I needed to get out and exercise again. When I strapped on my shoes and stepped outside, it started raining but I wasn’t having it. I threw open the door and ran, rain and all. At some point, while I was wet, cold and soggy it hit me. The shutdown from COVID-19, just like this run, is miserable, exhausting and is ruining people’s lives and businesses, but it can still offer opportunities for reflection, assessment, growth and a renewal of hope. And at the end of the day, God has a plan for us, and He calls us to step up and run the race that is set before us (Hebrews 12:1).  

What does this have to do with fundraising? Well, as a triathlete, as a Catholic, a father, an employer, a friend, an advocate for the nonprofit community, and a fundraiser, I have decided that, for so many reasons, COVID-19 sucks. Coronavirus has taken loved ones away from tens of thousands of us and for those individuals and families, I offer my thoughts and prayers. COVID-19, however, has taken freedom, charity and hope away for millions more and for those individuals, families, businesses, nonprofits and ministries, I offer not just my prayers, but I want to stand up and fight for goodness to return to their lives again.

"We are entering into a period of time when donors will remember what you did, how you communicated with them and why you believed your work and your mission was important enough to continue to plan for the future."

In my 38 years of life and a professional fundraising career spanning 15 years, the COVID-19 Pandemic-induced shutdown will go down, without a doubt, as the most devastating financial event for the nonprofit sector, churches and faith-based ministries in my lifetime. Now, this isn’t my first experience navigating nonprofit work during extreme economic circumstances. In the fall of 2008, I moved to Ohio when the Great Recession was just beginning. And in 2018, I was working with dozens of Catholic institutions when the priest abuse reports dropped in Pennsylvania. Both of those events took years to recover from. What is happening now could cripple the Church and the nonprofit community for decades if we let it.

WHAT IS AT STAKE?

Let’s start with some numbers and statistics. The latest data on employment within the nonprofit sector shows that there are 12.3 million paid workers (or 10.2% of the total US private workforce) earning $638 billion in wages annually ($52,000 average salary). This makes the nonprofit sector the third largest workforce in the U.S.

In 2018, charities received $427 billion in gifts and donations to support operations, programming, and growth. This was the largest amount ever given to charity in a single year. Giving to religious organizations alone equaled $124 billion and funded approximately 2.4 million church workers’ salaries.

If we were to see drops in charitable giving equal to that of the 2008 Great Recession, we would be looking at a loss in nonprofit revenue of $30.7 billion in 2020 and an additional $31.7 billion in 2021. However, in 2008, our entire economic structure was not completely shut down for two months and the unemployment rate did not triple in a matter of weeks. This will be much worse than 2008. Considering that, if charitable giving in 2020 declines 20 percent like some are projecting, that could mean $85 billion in fewer donations in year one and potentially more in year two. That’s a potential loss of between 590,000 and 1,600,000 passionate, caring and dedicated nonprofit and ministry workers’ jobs nearly overnight.  

"In all of these cases, the development teams focused on building authentic relationships, communicating impact with donors and inviting donors to continue to support the mission."

After salaries, the largest budget item is almost always programming. When an organization needs to start cutting costs, eliminating programs that “lose” money is typically the first course of action. The tragedy of this is that, most often, those free programs are exactly what bring people in the doors, not only fulfilling the mission but continuing the cycle of fundraising.

After staff and programs, the other big spending categories would include facilities (utilities, maintenance, etc), debt service and fundraising. While it would be dangerous to cut spending in any of those areas, most of the time, the costs for facilities and debt are fixed, which means that fundraising gets the ax. This then becomes doubly damaging because reducing or eliminating communications, donor acquisition, donor cultivation, travel, etc, means that an organization’s ability to climb out of a financial hole just went up a creek without a paddle, as the saying goes.

What does all of this mean? When the economy suffers, and nonprofit donations drop for extended periods, it’s a rare organization that has enough cash on hand to avoid any significant loss in its operations. Most charities, churches and ministries will end up laying people off, shutting down programs, terminating building projects and scaling back their plans and vision for the future.

WHAT IS THE SOLUTION?

First, the U.S. economy needs to open up and we need politicians and leaders to stop using fear and threats of continued shutdowns to control behavior. Unemployment hit 14.7% last week (up from 3.5% in February), and we still have states “closed” indefinitely. Every state needs to implement reopening procedures and communicate them as clearly as possible to everyone. The nonprofit community needs to take a stand. We must contact our elected officials and urge them to proceed with all due haste to remove the handcuffs that are crippling businesses and nonprofits and allow commerce to return and workers to rejoin the workforce. On his show last week, Dave Ramsey pointed out that you cannot have a national “v-shaped return to the economy when entire states are still at home”.

What are nonprofits to do when state officials won't reopen businesses? In our Virtual Summit, one presenter said that, "even though our church doors are closed, the Church is still open." Regardless of what local and state governments are or are not allowing you to do publicly; priests, pastors, and nonprofit leaders can still take action. This brings me to my second point.

Churches, ministries and nonprofit leaders need to get back to discussions that paint hopeful and positive pictures of what is possible and how they can make the world a better place. 

 

"For that to happen we, as a country and a nonprofit community, must not live in a state of paralysis, but rather, move forward with the idea that work is good and fear is dangerous."

On March 17, Petrus launched a Virtual Summit with daily webinars to discuss the pandemic and share strategies for raising money. Over the weeks and months, participants shared dozens of stories of generous donors and appeals exceeding their goals. St. Mary’s Catholic Center at Texas A&M recently raised $175,000 in a weekend through a virtual Matching Collection. The Culture Project raised $73,000 during their online Days of Giving. Both of these campaigns exceeded their initial goal and saw new donors show up and loyal benefactors step up. A third ministry, St. Paul Catholic Center at Indiana University set a goal to raise $10,000 from their direct mail Easter Appeal. They ended up raising $40,000 and received a separate $30,000 commitment from a donor specifically to fund salaries. In all of these cases, the development teams focused on building authentic relationships, communicating impact with donors and inviting donors to continue to support the mission.

I understand that suggesting that our businesses, churches and schools open up soon is viewed as somewhat controversial. Let me just say that I don’t wish anyone harm or death by hoping that our economy reopens. In the same way, I don’t wish for more car accidents by supporting a 75 MPH speed limit on the freeway or more heart disease by supporting fast food restaurants (even if I may occasionally upgrade my Whataburger to a large combo). The problem is that the shutdown is causing more widespread harm and systemic damage than the disease itself. Opening our economy is the only way that our economy and our nonprofit community will endure.

WHAT CAN YOU DO?

So what advice can I offer in the midst of this? If you are a ministry or nonprofit leader, today may be a time to be prudent and cautious, but it is not the time to throw tomorrow’s vision for growth, expansion, and increased mission out the door. Set those ideas on a corner of your new home office desk where they can be grabbed quickly and easily when brighter days return.

Continue to explore how you might serve your existing flock and engage new audiences in novel and unique ways. Keep sending your newsletters and telling your stories. Spend time investing in cleaning up your database and updating your website. Start a new ministry podcast or video series. Keep in touch with your donors, volunteers and mission partners by phone, video, email and handwritten notes. And please, please, please, continue to ask for support. Some people won’t like it and will tell you so, but the truth of the matter is that many of those people never supported you in the first place. Be bold, courageous and imaginative and your staff and donors will respond.

In closing, let me say this. Fundraising will not return to normal. We will not return to days when people “give what they give”. Instead, we are entering into a period of time when donors will remember what you did, how you communicated with them and why you believed your work and your mission was important enough to continue to plan for the future.

They will remember this and they will give more generously than ever before to those organizations that persevered when times were tough. For that to happen we, as a country and a nonprofit community, must not live in a state of paralysis, but rather, move forward with the idea that work is good and fear is dangerous. This I know…we have a God who loves us. We have a God who calls us to radiate that love to others. Most importantly we have a God who gives us hope, and one who has hope lives differently. My friends, don’t lose sight of your hope. 

So get out there and run. Even if the rain is coming down and you know you’ll end up with soggy socks; your ministries, your program participants, and your donors need you to be fearless and bold. Choose to be bold, choose to live differently!

All of us at Petrus are here to help. Reach out, call, text, email...we are all in this together. With hope, God bless!

- Andrew Robison

LOOKING FOR MORE IDEAS & RESOURCES? CHECK OUT THE ARTICLES ON THE PETRUS BLOG. 

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Four Proven Steps to Achieving a Giving Day Win

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Andrew N. Robison is President of Petrus Development. He has worked for over 15 years in development roles in Catholic campus ministry, higher education and academic medicine. Through Petrus, Andrew now works with organizations of all sizes to build sustainable development programs that allow them to expand their mission and better serve their constituencies.