December 9, 2010
Are recession cut backs causing you to miss the boat?
In today’s highly competitive economic and marketing climate, a wide range of nonprofits have hunkered down to ride out the storm, and, in doing so, have sown the seeds for their organization’s future without even knowing it.
Nonprofit leaders’ fears about “sinking the boat” (making bad investment decisions in marketing and fundraising) make it more likely they will “miss the boat” when it comes to taking advantage of opportunities that entail some risk and investment.
In today’s highly competitive economic and marketing climate, a wide range of nonprofits have hunkered down to ride out the storm, and, in doing so, have sown the seeds for their organization’s future without even knowing it.
We see leaders who have cut spending on research and development; cut back on acquisition of new supporters; reduced the cultivation and care of longer-term donors; reduced or halted planned giving contacts; and, reduced their organization’s presence in marketing and press outlets.
While that is certainly understandable, it doesn’t necessarily position the organization for the future.
In fact, it may be that such “conservative” (as in “conserving”) behavior gives another organization the chance to step into the vacuum and take over the former leader’s market share.
When advising clients about opportunities to grow, we counsel them that times of economic downturn can be a great time to strategically increase their message testing, their audience outreach, their R&D, and their conspicuous cultivation of supporters/constituents.
It is our belief that what an organization does in today’s environment will set the stage for its profile and strength in the years to come. An organization that can look two or three moves ahead when making investment decisions is well-positioned to endure the present while preparing for the future.
In an economic recession like the one we are in, uncertainty seems to be the underlying operating principle driving organizational decision-making. Organizations wonder how long it will last … how donor/consumer behavior will change as a result of the crisis of confidence … what this will mean about the strength of the nonprofit sector going forward … just to name a few of the questions that influence their thinking.
As a result, it is easy to focus on things an organization can control: cut back on research/testing expenses … reduce the workforce … shop for the lowest price even if it means reduced value … eliminate donor/constituent outreach unless it “pays for itself.” Short-term considerations tend to trump longer-term potential.
But herein lies the challenge facing today’s nonprofit leaders: protecting the organization’s balance sheet in the short-term may make it more difficult for the organization to re-establish itself as the recession recedes.
Actionable data on message, audience selects and channels may not be available due to testing cutbacks, and will make the organization sluggish coming out of the gate as the economy improves. Too many donors may have been turned off by the organizations’ relentless requests for support during the downturn … others may feel ignored by the cutbacks in informative communications (cultivations) that showcase the value of the donor and the impact of his/her giving.
We think too many organizations are focused on not “sinking the boat” and are making decisions to protect their current status without recognizing the implications (and opportunities) of today’s marketplace.
We want to be sure organizations we work with don’t “miss the boat” when it comes to making strategic investment decisions that protect the short-term while positioning the organization for longer-term growth and effectiveness.
