March 11, 2020
By Russ Phaneuf, Managing Director & Chief Strategist – IPM Advancement
COVID-19, novel coronavirus, is poised to upend the financial stability of many nonprofit organizations in the U.S.
It is important for nonprofit professionals to be aware of how this threat, which is growing exponentially, may impact revenue-generating operations. Fundraisers can play a crucial role in helping organizations weather the financial fallout from reduced event attendance, a decrease in member/subscriber renewals and ticket sales, and the increased strain of serving beneficiaries impacted by the virus.
First, if you haven’t already done so, seek out insights from epidemiologists and data scientists who have the expertise to cut through the noise and provide objective information. Educate yourself and stay informed so you can speak intelligently about this crisis.
Interviews with infectious disease specialists can help us “normies” better understand what’s happening from a public health perspective and apply these insights to our organizations. Among other discussions, I found Joe Rogan’s interview with Michael Osterholm — an internationally recognized expert in infectious disease epidemiology and director of the Center for Infectious Disease Research and Policy (CIDRAP) — to be an insightful conversation.
The blog post “Covid-19, your community, and you — a data science perspective” by Jeremy Howard and Rachel Thomas is an excellent objective primer on the virus, its spread, common misconceptions, and why it’s vital that each of us do our part to flatten the curve of infection rates. On YouTube, the video “Exponential growth and epidemics” by 3Blue1Brown provides a solid math lesson on how COVID-19 could propagate over time.
In brief, the challenge right now in the United States is that we’re woefully behind in testing those who may be carrying the virus. Experts tell us that we are likely beyond the point of containment, and now we must move to protective measures that will slow the spread of this virus and reduce peak impact on healthcare.
As I write this blog post midday on March 11, 2020, the live stats tracker at Worldometers.info indicates that the total number of confirmed cases in the U.S. is 1,016. That’s approximately the same number of cases reported in Italy on February 29 — just 11 days ago. Today, Italy has 10,149 confirmed cases with 631 deaths, and the Italian government has introduced measures to restrict travel and limit social interaction across the nation’s entire population.
Based on reported figures so far, it appears that how a nation responds to COVID-19 drives outcomes. (Consider the response of Germany vs. Italy, for example.) Unfortunately, that does not bode well for the United States, where public health experts and officials have acknowledged that demand for testing is far greater than the tests available.
All this means that it is extremely likely COVID-19 is coming to your community and will impact your nonprofit. The question is: Have you considered how your organization can weather this pandemic?
If you haven’t already begun internal discussions about your organization’s strategic response, it is time to consider the consequences — especially if your nonprofit is in any of the following service areas that depend on ticketed engagement, or if you directly serve large groups of high-risk individuals:
- Performing Arts organizations
- Places of worship
- Food banks / food security providers
- Rescue missions / homeless outreach and shelters
- Community health care providers / clinics
Other types of nonprofits could feel the effects of COVID-19 if there are significant losses in the stock market and an economic slowdown. While we probably won’t see a significant long-term impact on endowments, smaller nonprofit organizations that depend on grants funded by corporate and foundation partners may experience a whiplash effect of reduced grant awards in FY2021.
So what can we do in response?
1. Put safety first.
We talk a great deal about being “donor-centric” in nonprofit fundraising. Your organization’s COVID-19 response will test this concept in a new way. For many organizations, canceling concerts and performances could significantly impact revenue for the remainder of FY2020. Over time, restricting access to venues and experiences will make members/subscribers question your value proposition. Indefinitely rescheduling donor stewardship events may cause some supporters to think your organization is overreacting. But what’s the alternative? If your organization knowingly exposes audiences, constituents and beneficiaries to this virus, you cross an ethical line — not to mention that you potentially put your organization at risk for legal action. There will be an inflection point where the risk of being an enabler of this pandemic outweighs the financial reward associated with conducting business as usual. That time may come sooner than you think.
2. Be honest and transparent.
Explain to donors, followers, beneficiaries and the general public exactly what you’re doing in response to COVID-19 and why you’re doing it. All organizations have access to social media, and some have robust capabilities in PR and earned media. Don’t stick your head in the sand. Use those platforms to engage people and keep them connected to your organization throughout this crisis. To keep donors and other stakeholders engaged, consider sharing regular updates by e-mail, on your website, and even via TeleTown Hall.
3. Secure COPs now.
For nonprofit fundraising professionals in a position to do so, it’s important to secure Continuity of Operations Pledges (COPs) from major donors, board members, and other key stakeholders well before philanthropic revenue is impacted by this crisis. The market downturn of late may make it nearly impossible to close gifts. But at minimum, even if you are unable to secure commitments, you should initiate conversations with your most important funders. Let them know that your organization is taking this seriously, that you will keep them updated on the situation, and if appropriate, that you may come back to them with a formal ask in the months to come. Above all, don’t go radio silent; continue to cultivate those relationships.
4. Accelerate annual giving.
We simply don’t know what the fundraising environment will be like this fall. With that in mind, it may benefit your organization to do as much traditional annual giving fundraising as possible before the end of May. Just remember to think through extra precautions you may need to put in place for processing gifts by mail, and consider whether it may make sense to do a series of digital appeals — or even some telefund/phonathon outreach — over the next 30-60 days.
5. Focus on stewardship.
In situations where you cannot (or should not) be actively fundraising, the next best thing — and a great insurance policy to maximize future giving — is to amp up your stewardship efforts. Take the time to personally call, e-mail or engage your best donors via services like Zoom and Skype. (This is especially important if you cancel spring galas and other signature fundraising events. In some cases, stewardship calls could lead to contributions being made by phone or online after the call.) For lower-level donors, spring and summer are typically “softer” times in the annual giving fundraising cycle. Reach out with your appreciation via e-mail and, if possible, direct mail.
The bottom line is, every organization is different … but we’re all in this together. The COVID-19 pandemic has the potential to reshape our society within months. While we can’t predict everything that might happen, we know that how we prepare for it matters.