Global Policy Forum

Why Fundraising May Flourish While Business Flounders


By Janet Gadeski

Canadian Fundraiser
December 15, 2008

After months of stock market volatility, economists agree that developed economies are in or nearly in a recession. That prediction doesn't point to happy holidays or the usual fourth quarter gift surge. Yet a number of studies of previous economic downturns have surfaced, all showing that giving increased, albeit more slowly, during times like the dot-com bubble and the post 9/11 slump (CF October 31). Why should fundraising flourish while businesses flounder? When fewer people are willing to part with cash or assets in return for something as concrete as real estate, a new car or some mutual fund units, why are they still willing to part with cash or assets in return for nothing – at least, nothing you could put on a net worth statement?

Who is more primed for competition?

Consider the differences between raising money and selling products. For example, when someone needs private transportation, assuming that public transportation won't meet his every need and whim, his only option is a vehicle. A new computer or TV won't take him where he wants to go. Only a car will give him comfortable transportation over any distance at a moment's notice. An auto marketer's job is done as soon as he finds a way to make a Ford sound like a better buy than a Chrysler. Donors, by contrast, have many alternatives to supporting a particular charity: giving to other charities, or choosing another experience or product instead of making a gift. That means fundraisers are used to proving impact, telling our charity's story again and again in fresh, compelling ways. We live with a level of competition that few sellers of core consumer products will ever experience.

Relationships make the difference

Back to the car dealership. What relationship does it offer you post-purchase? Perhaps you bring the car in for warranty service every few months – a regular reminder that your purchase is deteriorating by the day, unlike the satisfaction of a high-impact gift. Does the dealer ever contact you over the years to express appreciation and nurture the relationship? Nope – no more relationship until the next time you need a car. Fundraisers, on the other hand, know our steady donors in ways that salespeople cannot hope to imitate. Our entire relationship focuses on listening deeply to them and creating giving opportunities exactly tailored to their preferences, abilities, interests and timing. Then we ensure that they hear from our organizations regularly with inspiring stories and quantitative evidence of our effectiveness. The success of our work depends on recognizing and responding to the hunger for human connection. Meanwhile, over at the car dealership, the auto branding experts are doing their level best to build loyalty to their brand, to a nebulous entity known as "GM" – all without requiring their salespeople to build ongoing customer-centered relationships. So fundraisers have huge advantages in these tenuous times. We already know how to position our organization as one of the most compelling in a universe of choices. Our success depends on relationships of respectful intimacy, a rare experience to which people respond with loyalty and generosity.

Charities enjoy high approval ratings

Our sector continues to enjoy high credibility with the public, as the Muttart Foundation's survey this fall amply demonstrated. 77% of the respondents to that survey said they trusted charities "some" or "a lot" (CF October 31). The trust ratings are far higher than those accorded to governments and businesses. Despite the few bad apples among Canada's 83,000 charities, people realize that the vast majority of charitable staff members aren't travelling in private jets, holding business meetings at lavish resorts, or earning one hundred times the average salary or more. As donors moderate their own lifestyles, they will respect charities even more for the restrained, modest operational style that most of us have practised all along. We face a society where the value of tangible things – property, consumer goods and investments – is declining. Those who facilitate the intangible but powerful benefits of philanthropy offer the lasting satisfaction of transformative connections to other human lives. That's why people have continued to give through every economic downturn in the past 40 years. That's why philanthropy will remain an irresistible experience.

With thanks to Tony Myers, Sharon Avery and Fraser Green for their thought-provoking presentations and conversations at the November Congress of the Greater Toronto Area Chapter, AFP.

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