Navigating the New Donor Environment Requires Non-Profit Executives to Find Innovate Solutions

While donor-driven change may initially feel scary, in reality, it is a feature of non-profit management that can lead to many benefits, including increased long-term sustainability and impact. This past year has presented funding and financing disruptions for non-profit leaders, unlike any other management challenges. The donor landscape is unpredictable and highly dependent on current events. Leaders must be able to navigate and make decisions on their toes, as this environment forces a regular yet unexpected change management schedule. Dealing with this requires a more non-conventional business approach.

During an interview for this article, Scot Chisholm, the Co-founder of Classy, articulated clearly and convincingly that during these uncertain financial times, non-profits can take advantage of change management processes to build new partnerships, leverage technology, and diversify their resource mobilization strategy. After a successful year in 2020 raising $1B for social good, Scot shared the following lessons Classy has learned during the Covid-19 crisis through its work empowering 6,000+ non-profits on its cloud-based platform.

Finding Creative Solutions

Non-profits in troubled financial waters can tap into their creativity to find immediate solutions.

“Adversity and constraints breed creativity,” says Scot Chisholm, Co-founder of Classy

The Covid-19 crisis saw many businesses and organizations ordered to close, and people called to quarantined in their homes. This unique set of circumstances forced non-profits to come up with creative solutions quickly to stay afloat. In the early days, leaders focused on finding ways to replace physical fundraising opportunities with virtual ones. However, as the pandemic dragged on, sustainability and opportunity promptly became a topic of interest.

1. Build strong new partnerships

One of the first, and most important lessons that non-profit leaders learn, is that they cannot do it alone. The work these organizations do depends on the kind and giving hearts of those around them. It is critical for non-profits to develop close, tight-knit, and innovative partnerships with people, organizations, and the private sector to survive during difficult times.

World Central Kitchen used this strategy during the Coronavirus pandemic when they partnered with the organic restaurant chain Sweetgreen back in April 2020. As the software platform provider for World Central Kitchen, Classy introduced the charity to the like-minded folks at Sweetgreen. The partnership resulted in the two organizations working together to provide frontline workers with meals, generating substantial interest and support in its wake.

“To be able to help share not just nourishing meals with the tireless and brave medical professionals working on the front lines of this crisis, but also the hope, dignity, comfort and care that a delicious and fresh bowl of food represents is an honor, and we are proud to partner with Sweetgreen on this mission,” said Nate Mook, CEO of World Central Kitchen.” — Business Wire

2. Leverage technology

Technology is widely beneficial. Businesses use it to broaden their reach, increase revenue, and improve efficiency. Covid-19 has shown that non-profits can use it just as effectively. The virtual landscape is shifting dramatically in response to a collective digital transformation, and this change is here to stay.

It is easy for non-profits in the early stages of their online presence to be distracted by new technologies, falling into a sort of technological “shiny object syndrome” trap. Scot Chisholm cautions against this. “How are you advancing the ball?” he asks of non-profit organizations.

“It’s not just chasing the next new technology. What if you picked maybe one or two different [types of technology] and you did them well? How are you thinking about technology as an enabler to deepen relationships and build recurring revenue versus just thinking about the top of the funnel and just thinking about donor acquisition?,” — Scot Chisholm

In times of change, non-profits need to appreciate their current donors and use technology to connect with them, keep them informed, and most importantly, thank them.

3. Diversify your fundraising

The only reliable way for a non-profit organization to create stable and sustainable funding streams is to diversify its donor pool. As many local groups have recently experienced, fundraising issues can instantly limit your flexibility and autonomy if things head south.

The pandemic revealed several valuable opportunities for virtual fundraising. These include:

● Crowdfunding: This is one of the most popular methods of fundraising out there. With multiple platforms hosting this type of fundraiser, crowdfunding provides non-profits with the opportunity to tell their story. Crowdfunding works by generating small amounts of money from individuals within a large group of people.

● Peer-to-Peer Fundraising: Simply put, this is a multi-tiered version of crowdfunding. Because it uses existing relationships and networks, peer-to-peer fundraising is built for social media. Peer-to-peer fundraising relies on networking to reach out to peers in order to generate donations.

● Recurring Giving: Recurring giving is one of the most reliable and sought-after fundraising options out there. This type of giving eliminates seasonal fiscal concerns associated with operating a non-profit, which is why it is preferred over one-time giving. As the name implies, recurring giving happens when a donor makes a regular, ongoing donation to your organization.

Preparation and flexibility

Managing donors during times of change can be incredibly overwhelming. But, as we go into a post-Covid world, non-profits should keep this in mind:

“A recurring donor is worth five times as much as a one-time donor,” says Scot, and that’s where we need to be focused if non-profits want to survive in uncertain times.

Organizations with recurring donors, strong partnerships, and multiple income streams are the most likely to survive and even grow — even through the unpredictable.

For instance, Scot notes that nearly 20 percent of total giving on Classy’s platform today is done by donors who “subscribe” to non-profits and pledge to give regularly. Donors on Classy’s platform also committed over $14 million in monthly recurring donations in 2020 alone. Ultimately, this practice of boosting recurring giving models helps non-profits maximize their revenue streams seasonally and achieve their missions year-round, Scot said.

A key lesson for non-profits emerging from the pandemic is to be prepared for anything. Planning and flexibility will keep your organization in an advantageous position. Maintaining that advantage in uncertain and unstable times can help you survive.

However, whether you are prepared or not, continuous adaptation is required in times of change. Non-profits must learn to evolve and respond to the events around them. These top three tips — building partnerships, leveraging technology, and diversifying fundraising — are a way to get started now.

Edmund Settle is an Executive Coach and can be reached at edmundsettle.com. Leveraging over 20 years of international human rights and development experience, he works with nonprofit and community leaders to maximize their organizations’ impact.