Zimmerman Lehman: "Economic Uncertainty and the Nonprofit Self-Fulfilling Prophecy"

Economic Uncertainty and the Nonprofit Self-Fulfilling Prophecy

These are perilous times for nonprofit organizations, but not for the reasons that you probably assume. Yes, the economic picture in the U.S.-and worldwide-might charitably be characterized as "uncertain," and most folks read the business pages these days with their hands over their eyes, peeking through their fingers in mortal fear.

For those of us who have been around the block a few times, this is nothing new. In late 2002, I wrote a ZimNotes essay entitled "Combating the Doom and Gloom" Here's some of what I had to say six years ago:

If you want to wallow in the gloom, be my guest, but you'll be missing some huge opportunities. Do you really think that Mr. and Ms. Megabux Q. Dinero are wondering where their next crème brulee is coming from? Are your wealthy donors pawing through the canned goods in their garages and subsisting on creamed corn and refried beans? I don't think so.

The nonprofits that succeed in this tough climate will have the following things going for them: (1) Diversified funding streams; (2) Boards of directors that are willing to give and ask for money; (3) Written, specific fundraising plans; and (4) Enough staff to get the job done right.

Something else to keep in mind: the lion's share of private philanthropic giving comes from individuals, not grantors. My educated guess is that the disparity between individual giving and grants will grow in this difficult economy. The lesson is simple: don't stop applying for grants, but concentrate your fundraising firepower on individuals. A cadre of individual donors who believe in your nonprofit will see you through, even in these tough times.

Fast-forward to 2008, and…la plus ca change. The economic malaise may have a different cause now-in 2002 it was September 11, 2001 and the tanking of Silicon Valley; in 2008 it's the housing glut and the subprime mortgage crisis-but the result is the same. Nonprofits assume that the economic downturn means that prospective donors will give them the cold shoulder. With the Presidential election race heating up, nonprofits also assume that precious dollars will go to politicians, not to the nonprofit sector.

Please. The simple fact is this: most nonprofit board and staff members view fundraising the way they view root canal. They're looking for ways to avoid it. And guess what-the economic doldrums and competition for dollars from politicos are gold-plated excuses to avoid asking for contributions.

But that's all they are-excuses. In 2006 (the last year of record; the 2007 figures will be out in June, 2008), private giving to nonprofits in the U.S. totaled $295 billion. Let's assume that there is in fact a downturn in charitable giving this year to--$270 billion! Can your nonprofit survive and thrive on a piece of this $270 billion pie? I think so.

Zimmerman Lehman's 14th rule of fundraising is "No Whining." It's an important rule. Figure out what your nonprofit is "selling," approach the appropriate prospective donors and grantors, and make the case as compellingly as you can. The money will be there, and you'll come to understand that the economic crisis is but a tiny bump in the road.