time for changeIn my last post I talked about how everyone is trying to “pivot” during this crisis. All of that pivoting is necessary. But, as I said last time, “pivot” implies a temporary measure or action taken during a time of crisis, but when the crisis is alleviated, things go back to the way they were.
There are two big things we really need to permanently change, not just pivot on, in the non-profit space. The first one I laid out in my last blog post, changing how we evaluate major gifts – and thus how we DO major gifts.
Most non-profits have built a culture of adhering to performance metrics to evaluate MGOs and major gift programs that actually create a “transaction mindset” rather than a “transformational mindset.”
Okay, that’s the first one. The second thing that this crisis has shed light on that we need to permanently change is that non-profits HAVE to diversify their revenue streams.
This crisis, if anything, has served as a stress test for many non-profits. What Richard and I have been warning non-profits about for years is coming true: If you’re relying on the majority of your revenue coming from just one or two sources, you’ll be in massive trouble if a financial crisis develops.
And here we are.
If your non-profit has not developed a solid mid, major or planned giving program, now is the time to change that permanently, and add them to your revenue strategies. Likewise, those orgs that only have a major gift program and do very little in acquiring new donors are also going to be in massive financial trouble, because you’re not filling the major gift pipeline with donors who will eventually end up making transformational gifts.
Right now, non-profits who have relied heavily on events (galas, walks, 5K runs, etc.) are in a world of hurt – and quite frankly, it’s never going to “go back” to what it was. And, if you’re honest, you know that those strategies were slowly dying anyway. The pandemic just sped up their demise.
And it’s not just events. Non-profits who rely on corporate sponsorships, and city, state and federal grants are also scrambling. The clarion call of this pandemic has to be heard: you have to diversify your revenue! (Tweet it!)
Individual giving – more specifically, mid, major and planned giving strategies – need to be part of your non-profit’s source of revenue. We know how important it is today, because non-profits that already had a structured major and planned giving program that focused on building relationships are weathering this current storm and thriving.
Our partners on the direct-response side of fundraising at Moore DM have looked at giving trends since the Great Depression, and the one area of philanthropy that holds steady or loses only 2-3% during an economic downturn is individual giving.
Now, diversifying your revenue streams could come at a cost. We know that organizations that want to change their culture and invest in mid, major and planned giving programs run up against internal forces that don’t like change. Change isn’t easy, but it will be necessary for the long-term health of your organization.
But there is hope. Veritus is working with two very established, highly-regarded clients who were heavily reliant on just a few sources of revenue, and they’ve taken the bold initiative to build their mid, major and planned giving programs. They have leaders who are committed to changing their culture, and in just a short time they’re already seeing dividends of that work.
However, it’s really the long term that leadership is looking at. They know that in 5, 10, 15 years from now, they’ll be well positioned not only to stay strong, but to grow and provide more of their mission-oriented services than ever.
It was no small thing that these organizations not only pivoted but CHANGED how they did their fundraising. They’ve started to move from transactions to transformation, from going after the money to building relationships that result in giving. They’ve made a bold decision and commitment to change their philanthropic culture and diversify their revenue sources.
You can, too. You must do it. Not just pivot, but permanently change to build a strong major gift and planned giving program and pipeline!