3 DM Strategies for Fundraisers During the Tough Economic Climate
Last January, fundraiser Mal Warwick, founder and chairman of Mal Warwick Associates in Berkeley, Calif. and Washington, D.C., saw the U.S. economy heading south and published a paper entitled Fundraising in Tough Economic Times. Well, those times have become even tougher, so Warwick recently readdressed the topic in a new paper, Fundraising in Tough Times: A No-Nonsense Guide to Surviving in a Challenging Economy.
Here are three possible fundraising strategies that he lists:
1. The Defensive Approach.
In this strategy, Warwick says cost cutting is priority No. 1, so a wholesale reduction would be in order. That includes cutting down on donor acquisition activities and thank-you letters, canceling special events that are only marginally profitable, and bringing gift processing and donor file maintenance in-house.
2. The Selective Approach.
Use a combination of a short-term and long-term approach. The idea is to maximize net revenue in the near term while maintaining the long-term value of the donor base. Cut down on direct mail testing, costly cultivation events, and glossy magazines or newsletters.
Make the case for giving to match the reality of the times and keep solicitations going, especially to those donors who generate high net revenue. Examine and evaluate the long-term value of donors.
3. The Aggressive Approach.
Warwick names this strategy correctly. It's a brave approach, which advocates increasing donor acquisition activities, even in the face of lower response rates. Persistently innovate, test new direct mail packages and new appeals online, and push hard for more and larger gifts from donors. Maintain stewardship policies as before.