Let’s kick the New Year off right!  The year 2009 promises to be a tough economic time, but it will be manageable for the non-profit world if we keep our cool, use our imagination and apply some common sense rules to doing business.  And we may have to try some new and alternative techniques in our fundraising programs.

Here are 9 suggestions for making it through the financial thicket. We’d appreciate hearing some of your suggestions and thoughts right here on “CBA Talk.”  Perhaps we can come up with 99 more ideas for an even better 2009.

1. Don’t panic
   Sure it’s bad, but don’t make it worse by taking steps that could hurt you more down the road.  For example, don’t stop fundraising; sending direct mail; acquiring new donors.  Donor acquisition is key to long-term financial success. It’s very hard to recover from a decline in acquisition. Cutting your acquisition budget in half now could result in raising only half of your total revenue in just 5 years; canceling it entirely could be worse. Remember, acquisition is about the donors, not fast money. And keep doing everything to renew support from those you’ve already acquired. A large base of support is stable, and if each individual donor has to cut back a just little, the resulting drop in revenue won’t be as painful.
2. Don’t forget what you already know
   The same basic rules still apply so don’t make rash, uneducated decisions.  You’ve tested into packages that work.  It will require great patience and courage, but staying the course means relying on decades of proven methods and techniques.  Chasing after easy money by reverting to transactional donors only – event attendees, heavy premium usage, pledge drives (or telethons) – creates a weakened, less engaged donor pool. Having a diversified, integrated program is still the best strategy.
3. Okay, sometimes you have to break the rules
   In these budget-centric times, you might not have a choice – If your Board or Directors tell you to cut costs at all costs, sometimes you simply can’t mail that larger, more colorful package you’ve tested into.  But, understand why that package worked to being with.  Keep the main ingredients, the goals, the messaging.  If you’re experienced in the field of direct response fundraising you can make some decisions based on educated assumptions.  Rely on your intelligence and gut feelings to save money.  If the net return isn’t as good as another package or format, but you’re stuck with a reduced budget, take a little less net income but continue fundraising.
4. Fundraise smarter, more efficiently
   We know personalization works and so does targeting groups segmented by demographics, gift size, frequency, recency, preference for specific services, a desire for benefits, premiums, recognition and so-on.  Do an analysis of your list strategy. Do you continually mail into areas that have horrible response?  Are you dropping marginally performing lists that still do well in profitable zips?  Most organizations could cut their costs dramatically while not adversely affecting their number of donors by taking a hard look at the numbers for individual sources and segments or having someone do it for them. Mailing smarter is the goal; not necessarily mailing less.
5. Cut your costs
   Direct mail is still the best way to target the largest number of likely prospects. But not all direct mail has to be expensive.  Talk to your suppliers about reducing costs.  There’s a lot of competition out there and everyone wants to keep their machines running and people working.  Explore different formats and techniques.  Use email and voicemail to lift response. Use the internet as a way to get more attention for your organization and cause and to transact donations. Cut back on your weakest appeals while mailing to your core list of supporters more often.  Try re-awakening past successful, but temporarily warn out mailings, telemarketing scripts and emails rather than spending a lot of scarce money on new creative.  If it worked in the past it is likely to work again.
6. Lower the ask
   Almost everybody is reducing the amount of their gifts.  Live with the economic reality and be flexible; don’t force your donors into your mold or require them to give a certain way.  Ask for less for the next 6 months to a year – longer if necessary.  Encourage gifts at any level; tell you donors to “give whatever you can.” Use installment options for convenience.  Just be aware of how supporters (and the public in general) are behaving during the recession.  If you can test asks in different gift ladders, by all means do it; maximize your income through segmentation.  Keep them giving.
7. Rely on good information
   Decision making, especially how you’re going to spend your budget dollars, must be based on in-depth and accurate information.  It’s not enough knowing how new donors respond to your initial appeal, you need to know the long term value of a new donor or member from the different sources you use, so you know how much to invest in each one.  It will take a few transactions to know where best to spend your budget dollars, but then evaluate all the transactions that occur during the life times of donors from different sources — who will respond best to special appeals and renewals, who will upgrade or downgrade over the next few campaigns?  Analyzing the numbers properly is critical, there’s no room for error.
8. Network with colleagues
   Don’t try to go it alone during this unusually difficult time.  Errors could result in disaster and there’s no money for do-overs.  Talk to your colleagues in the field. There’s no benefit in being secretive and protective of your knowledge.  Share test results – this information is often available in trade publications anyway.  Open up the lines of communication within your organization.  “Integrated marketing” is more than a catch phrase.  Now is a great time to make sure your staff is integrated and working together, sharing ideas and knowledge and all thinking about fundraising.
9. Torpedo the “Sinking Ship” mentality
   Donors don’t want to give to an organization that’s merely rearranging deck chairs on the Titanic.  So, don’t fundraise for a bad economy by linking appeals to bad financial news.  Instead, stress the value of your organization and its good work – just like you would in good times.  Consider positioning your organization as giving the most value (bang for the buck) when giving choices have to be made.  However, donors also understand need in bad times.  After all, Americans are the most generous people on the planet. In 2007 we gave $229.03 billion to charity.  Don’t assume that donors can’t or won’t be able to give. They may cut back on some things, but that doesn’t mean they need to cut back on you. So don’t be shy or feel guilty to ask for support when you need it.  Just do it in a positive, ‘aspirational’ way.  The more you talk about your financial need and the fact that you may be running or facing a deficit beyond your control is good fundraising – AND IT’S BEING TRUTHFUL.  Every time we get to tell the financial situation like it is, we do better in response and revenue.