Recession-Proofing Your Nonprofit

By: Kim Horton, CFRE

Though the economy expanded at a rate of 2% in Q2 2019, there is emerging evidence that economic growth is slowing, causing many to brace for another recession. Considering that our non-profit industry makes up 2% of U.S. Gross Domestic Product, we need to pay attention.

Many in our industry are haunted by the recession of 2008, which did not discriminate and left many non-profits with considerably less operating revenue and flexibility.  The Weingart Foundation cites some relevant research from the Chronicle of Philanthropy here.

While the article suggests non-profit organizations aren’t thinking much about a recession and are forging ahead under an assumption of business as usual, we at The Hodge Group recommend a proactive approach to recession-proof your nonprofit by following these steps:

  1. Encourage Hyper-Philanthropy™ by diversifying your resources

By using data and going through a strategic planning process, you will align your constituents to a predictable and sustainable philanthropic response that allows you to continue to be impactful. Strategic use of your volunteers and technology enhances this and helps drive your organization toward a hyper-philanthropic state.

  1. Create a Usable Strategy

Many non-profits engage in strategic planning to appease accreditation requirements or to remain in compliance with a grant-making organization.  THG believes in creating a strategic plan that is regularly referenced.  By having this type of tool available, all resources can be directed effectively without compromising mission delivery.

  1. Know Your Value Proposition

Several non-profit organizations mimic services, sometimes inside the same area of expertise.  When individual donors are faced with making decisions during a time when their philanthropic dollars are limited, you want your organization to stand out as one they should choose over others.  That’s where THG can offer vital aid with our proprietary formula for crafting a branded, donor-centered value proposition.

  1. Establish Flexible Funding

Now is the time to bolster your annual giving efforts so that you have more unrestricted dollars accessible for remaining agile through tough times.  Testing specific variables within this fundraising stream is most effective before a recession and the data acquired will help direct a more predictable response should you be faced with having to make difficult operational decisions.

  1. Gather Data Regarding Organizational Capacity 

A Feasibility Study is not only for Capital Campaigning. THG offers an enhanced, proprietary assessment model which delivers to organizations information about specific attributes which exist to support them through any conditions. These measurements come from both internal and external resources and offer insight regarding expectations and assumptions.