Each morning I start my coronavirus stay-at-home routine by making a list of the 10 things I’m grateful for that day. One of the items on today’s list: I’m grateful that I’m on the back nine holes of life.

Although older age has its downsides when it comes to combatting Covid-19, it sure has benefits in providing perspective for times like these.  One thing I’ve learned is that downturns expose organizational weaknesses, poor practices and downright neglect.

There’s little question that this downturn will prove to be the mother of all downturns. Most experts who deal in reality and data believe this crisis stage will persist for somewhere between 18 and 24 months and wreak economic havoc.

Like most of the folks in our trade I’m an optimist by nature, but this crisis has sure tempered my optimism.  Because of its length and degree of economic damage few nonprofits will be spared. In short, I sure wouldn’t plan or act like this is similar to the Great Recession of 2008 and, “although it will take some time, we’ll come through it and what will emerge out the other end will be about the same as before.”

That’s why in these early months of the crisis The Agitator will spotlight some common weaknesses and poor practices that, unless quickly corrected, could either prove fatal, or at the very least yield an ICU-like experience for many organizations.

The Starting Point

Let’s begin with a basic weakness that will trigger an avalanche of additional missteps and problems: the failure to understand Donor Value.

So far, the immediate reaction of some boards, CEOs and CFOs is to slash costs and husband cash. On its face that, of course, is sensible. However, the question then arises as to what costs should be cut?   Sadly, those unsophisticated and panicked leaders who view donor services and donor stewardship as “cost centers” will immediately move to gut those budgets. Exactly the wrong move.

Of course, the correct move is to spend as much as possible on the most precious long-term financial asset an organization possesses—its donors.

Reducing spending for proper donor care is the fundraising equivalent of a farmer failing to invest in seed corn for the next season.  Bad farming.  Bad fundraising.

One reason this misplaced cost-cutting occurs in so many organizations is that so few boards or top management understand the value their donors beyond how their immediate donations figure into this year’s or next year’s budget.

The consequences of this short-sightedness are profound, especially given the climate we’re likely to face for years to come.  The mostly likely consequence—and one we’ve seen in other downturns—is the loss of valuable donors to competing organizations that, in this kind of  climate demonstrated they care about and truly appreciate the donor.

I’m inPenny Wise and Long-Term Foolish

Standing up against attempts to cut donor service and donor care/experience budgets requires that you be able to inform the board, CEO and CFO just what they’re putting at risk.

“Oh, let’s just cut these thank you notes. That’ll save us both time and money.” …or…” We just don’t have time to telephone and check in on these donors.”  or…” Let’s cut out sending a newsletter until things are back to normal.” 

Each seemingly “little cut” reduces the value of the donor base and reduces the ability of the organization to deliver on its mission.  There will be a hundred reasons why cuts should be made and it’s the fundraiser’s job to push back.

In the words of Ben Franklin:

“For the want of a nail the shoe was lost,
For the want of a shoe the horse was lost,
For the want of a horse the rider was lost,
For the want of a rider the battle was lost,
For the want of a battle the kingdom was lost,
And all for the want of a horseshoe-nail.”

In the words of The Agitator

“For the want of $1.10 for a prompt and passionate Thank You the next gift was lost,

For the want of a call to check on the donor a monthly sustainer cancelled,

For want of a newsletter a donor valued at $800 lost touch.”

You get my drift.

Calculating Donor Value

There’s good reason your tv screen is plastered with consumer brand advertising in the midst of this pandemic.  Companies learned from the Great Depression that those were front and center with their customers in the depth of that crisis came out the other end in much better shape.

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You can bet the sales and marketing managers of today’s companies have sent memos to their CEOs reminding them of customer value as they fought for their budget allocation in this crisis.

So, the first step in protecting your organization’s most valuable financial asset: calculate the lifetime value of your donors.  This will give you powerful ammunition against the budget-cutting assault.

Here and here  are two Agitator  posts that will show you how to calculate this key metric and also they also outline how this calculation can be used for a variety of purposes beyond helping you save your donors.

Start Taking Action Steps for Donor Preservation Today

We don’t have to let more time pass to see what’s happening and why taking action to communicate with and care for your donors is urgent.  As we reported last week, monthly giving cancellations for March in the UK were up 41% over same period last year.

Also last week DonorVoice held a webinar with suggestions on how to reduce monthly giving cancellations based on applied behavioral science and psychology.  You can download a recording of that webinar here.

In the days ahead we’ll focus on steps forward-looking organizations should consider in protecting their future from the effects if the coronavirus meltdown.

Meanwhile, take an hour of you time and calculate the value of your donors so you’re prepared to fend of the demands for cuts that will doom the longer-term future of your organization.

Roger

P.S. On my gratitude list is appreciation for the treasure that is SOFII.

So, I remind you that their fab I Wish I Had Thought of That conference gets underway tomorrow, April 21st.  You still have time to register for  Virtual IWITOT 2020 and  be delighted by 14 more campaigns that will spark your creative juices and have you falling in love with fundraising all over again.

IWITOT 2020 is taking place online, Tuesday April 21st from 12.30pm to 5pm British Standard Time. Elsewhere in the world here are the start times: 4:30am PDT, 6:30am CDT, 7:30am EDT, 1:30pm CEST, 9:30pm AEST, 11.30pm NZST)

AND… if any of these times are too early or too late don’t worry, IWITOT will be online for one month post-April 21^st. Buy your ticket/s here today and I join you there tomorrow..