This lingering recession is a time of crisis for nonprofits unequaled in recent memory. Donations to many organizations are still down from their highs of 2006 and 2007. The protracted nature of the downturn suggests that we are entering a "new normal" to which organizations must adapt or perish. The nonprofit sector is a huge source of employment and assistance in the U.S., and we should be doing everything we can to ensure that the sector remains strong.
As the competition for philanthropic dollars grows ever fiercer, it is imperative that an organization tell a compelling story about why individuals and institutions should support its work. As I consult to clients in different areas of the sector -- from health to education -- I am struck by how often there is impatience to get to the fundraising without taking the time to articulate why people should give. Think of it like dating. With so many potential suitors out there, why should you get chosen?
In my experience, the desire to raise more money exposes many of the key areas within a nonprofit that need attention. One of the most common is a lack of focus -- an inability to state clearly where the organization is going and how it will get there. Of course, donors are giving money because the nonprofit has a good track record. But really what they are doing is funding future work. More and more, even small donors want to know what an organization will do with their money. And they want periodic updates on how the initiative or project they funded is going.
Creative organizations have developed all kinds of responses to this challenge. For example, Heifer International has always been and continues to be an international development organization. But it has positioned itself as a way to give "gifts" to loved ones that make a difference in the lives of those in need. The gift given to a loved one is actually a gift to others. It is something tangible, like a pig or several rabbits, and it goes to a family in the developing world. The person at home gets the satisfaction of knowing that they have made a difference. The website even has a catalog like the ones one finds on major retailers' websites -- complete with a shopping cart icon.
Kiva, another nonprofit in international development, has taken micro-lending and made it available to the average consumer. Loans can be as small as $25, and lenders get periodic updates on their loans as well as their money back over time. The website allows lenders to browse different potential borrowers and select the project they wish to fund. Kiva is a phenomenon. It was founded in 2005 and already has a budget of over $10 million -- no mean feat for a nonprofit.
These are just a few examples of the edge an organization can achieve by thinking carefully about market niche, audience and message. They indicate that fundraising success lies in communicating the uniqueness of a not-for-profit organization. Why should donors give to your particular mission?