Meaningful Donor Conversations in Uncertain Times

Yes, it’s a difficult time. Especially for organizations that receive significant government funding.

With federal funding cuts happening across the board with little notice, many nonprofit leaders are feeling blindsided. Many organizations are in crisis.

We agree, this is certainly a crisis, and you can use that word!

Today, Kathryn Gamble and I are sharing our best advice about reaching out to donors – what to say and how to say it.

And, remember, right now, you have an excellent opportunity to build a closer sense of trust and connection with your key donors and stakeholders.

First of all: Acknowledge the situation.

Acknowledge that this is truly a crisis crisis for many organizations. And for many people who have lost their jobs.

It’s ok to be concerned and distracted. We are also concerned and worried about the economic future of many nonprofits.

We have conversations almost daily with some of our clients who are concerned—about the future of their organization, their teams, and most importantly, the people who benefit from their work.

The Reality of Nonprofit Funding

Here are the facts: most nonprofits receive some type of government funding. We find that some nonprofits receive as much as one to two thirds of their budget from various government sources.

Many people do not realize that in the big picture, nonprofits receive revenue from three primary sources:

1. Government funding – a significant portion for many organizations.
2. Earned income – sales, ticket fees, and service fees.
3. Philanthropy – contributions from donors, corporations and foundations.

And right now, nonprofits are facing serious funding reductions in the government funding area.

We want to note that some organizations are more immune than others—those with substantial earned income or other support—but for many, this is a crisis.

Communicating with Donors in Uncertain Times

When you consider reaching out to donors, it’s important to acknowledge the uncertainty—how you feel and how everyone is feeling. Simply acknowledging the reality of the situation can help lighten the emotional burden.

It’s really about empathy – for yourself and others. You can never go wrong by recognizing how people feel.

Even sharing a little bit about your own concerns, when appropriate, can help donors relate and open the door for deeper conversations.

Having a Strategy & Plan

You need to have a clear donor outreach plan: What are you going to do first?

Which donors will get phone calls, emails or visits? Who will make them? What will you say?

Sit down with your team and brainstorm the best steps.

Our recommendations are:

• Focus on your major donors, especially the ones who can help out financially.
• Prepare an approach, talking points, and a plan for reaching out.

There’s nothing wrong with sending an email that says, “These are tough times for our organization.” Always, always – being direct and transparent strengthens relationships.

The Importance of Transparency in Fundraising

Nonprofits often communicate in a watered-down, overly formal way. Take a look at your language. Is it normally very dignified and formal?

Now is the time to be clear. Say:

• “Yes, we are facing a challenge.”
• “We are experiencing a funding crisis.”
• “Here’s how you can help.”

Many donors don’t know how nonprofits are funded. This is your chance to educate them—not just on how much money you’ve lost, but on the real impact this has on the people you serve.

This is when storytelling wins the day. Tell stories about what is happening or what might happen to the people you serve.

Key point: One compelling story featuring just one person or situation is more impactful than three stories!

Stories make your donors feel the urgency, help them remember and share your message.

Educating Donors on Your Funding Model

Here’s a hot tip: Now is the perfect time to bring back the good old pie chart.

A color-coded pie chart diagrams out your funding model —how much comes from each of the primary revenue areas: philanthropy, earned income, and government funding.

You’d be surprised to discover that many board members and donors don’t fully understand your own organization’s funding model.

Sharing this type of information builds trust and credibility. We saw during the pandemic that organizations that were transparent with their donors received more financial support.

Making the Ask: A Pretext for Outreach

If you’re wondering how to reach out to a donor, you already have a pretext! Use permission-based conversation starters like:

“Would you like to know what we are facing?”

That’s so powerful. Once the door is open, you can guide them into a collaborative ask.

Final Thoughts

We know this is a tough time. Take care of yourself and your team.

Nurture your donors with honesty, transparency, and trust-building conversations.

We hear from nonprofits daily about these challenges, and we want you to know—we’re here for you.

Take care, and best of luck. Keep in touch!