Is your nonprofit facing a budget shortfall? Don’t panic, project.
I got a tough question that I know a lot in our sector are dealing with right now.
“My nonprofit is facing a budget shortfall. How do I reach out to donors and ask for money without panicking?”
It’s a fact.
Donors are holding back.
Whether it’s due to the economy, concerns about the nonprofit sector, or just a lack of trust generally, a lot of donors are reducing their giving.
So a lot of nonprofits right now have 5%, 10%, or more budget shortfalls.
And you want to tell your donors how urgent it is without coming off as needy.
The nonprofit that asked the question had an appeal letter going out to its core donors.
Now, they had already been asked for money, and the response was – minimal.
This nonprofit needed to get their donors to realize the urgency of the situation.
The letter started off with a brisk thank you, and then talked about how tough the year had been, before going into the shortfall the nonprofit needs or bad things will happen (shuttering programs, closing facilities, etc.).
Sounds good, at least honest, right?
THE HONEST TRUTH
Here’s the thing.
No one wants to support a sinking ship.
When a donor gets an outreach from a nonprofit they support and it’s desperate, you lose trust.
You fall into the need category instead of the exciting category.
If you do get anything, you’ll be operating at a deficit with that donor.
More likely, they’ll just ignore your letter.
You can only support so many needs at once.
FOR PROFITS HOLD THE ANSWER
So you need to do what for profits do.
Advertising titan David Oglivy famously said “in a recession, those who stop advertising lose ground.”
Smart businesses know that tough times are the time to cast vision the hardest, not pull back.
When sales are down, you double down on ads.
Explain your benefits better.
Launch a new product.
You get yourself out of the slump, don’t just hope it passes you by.
WHAT YOU DO INSTEAD
Instead of panicking, project.
Instead of your letter or outreach stressing how much you need for your programs coming up, think bigger.
What are your plans for the year?
What is something incredibly exciting you can do?
What is the gap you’ll be filling?
What is the critical need of the people you serve, the incredible work you do, and how you can help even more people next year?
Instead of a half hearted thank you and a cry for help.
Project what the future holds if they give.
And show your donors you are leading the charge towards that future.
You’re not in a crisis because the need wasn’t clear.
You’re in a crisis because your donors aren’t thrilled by the work you do.
That nonprofit?
They reworked their letter.
Started with a genuine thank you.
Talked about their accomplishments.
And casted the vision for the future.
They raised half their annual campaign goal in one week.
Their budget shortfall is almost gone.
And they put pluses in the relationship bank account for later.
Lead your donors into the future, and they will follow you.
If you want a copy of that letter the org sent, happy to give it to you.
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