Are you being financially wise as we enter what could be a very long and deep recession?
Maybe your board wants to move money into safe and stable investments. Cutting expenses, especially donor acquisition, which, after all, is a money-losing activity in the first year or so.
Bad move.
Cutting fundraising is financially irresponsible. Especially now, when conventional investments are lower than usual because of extremely low interest rates.
That's the important message of The Cheap Money Paradox at The Agitator:
If ever there was a time to substantially boost acquisition investment and increase spend on donor care and improving donor experience now is the moment. The financially wise nonprofit will seize this opportunity for both new donor growth and to invest in hiking retention rates.
Put your reserves in stocks and bonds, and it will grow about 5% and year. More in non-recession times.
Put it into fundraising, and it will grow, on average, somewhere around 300% a year.
Which one would a smart board choose?
(That return depends on exactly how you spend that fundraising money. Donor acquisition typically loses money at first before it turns around and starts to make money. Some activities, like improving retention, focusing on high and mid-value donors, and bequest fundraising have returns much better than that 300%.)
These numbers aren't guesses. They are what happens in the real world.
So talk to your board about being financially prudent and spending more on fundraising. They might even consider getting a loan to finance fundraising activities -- after all, interest rates are at historic lows!
from Future Fundraising Now https://ift.tt/3lzMYrg
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