Podcast: Is the Sky Really Falling?

Season 5, Episode 33

When the economy dips, political tensions rise, or a major funder pulls back, nonprofit leaders often hear the same refrain from anxious board members: “Maybe we should stop fundraising until things settle down.” It sounds reasonable on the surface. But reacting out of fear rather than strategy is one of the most damaging things a nonprofit can do — especially in uncertain times.

The instinct to hunker down is understandable. When headlines are alarming, and the mood in the boardroom turns nervous, it can feel like the sky is falling. But is it really? And even if parts of your world are shifting, does pulling back on fundraising actually protect your organization — or does it make things worse?

The truth is, at least half of what feels like a crisis is emotional rather than factual. Fear is contagious. All it takes is one or two board members raising alarms — “We need to stop asking for money right now”—for that anxiety to ripple through your staff, your volunteers, and your entire culture. If you haven’t thought through your response in advance, you’ll find yourself speechless when a respected board member suggests putting the brakes on your campaign or your annual fund.

Listen Now:

Andrea Kihlstedt:
Oh my God, the sky is falling. Or is it really?

Amy Eisenstein:
Hi, I’m Amy Eisenstein. I’m here with my colleague and co-founder, Andrea Kihlstedt. And today, we are talking about the falling sky — or maybe it is, maybe it isn’t — but I think in this political, economic, social environment, it can feel like the sky is falling.

Is the Sky Falling? And How Does That Affect Fundraising

Andrea, why are we talking about the sky falling today?

Andrea Kihlstedt:
Yeah, I think it’s a super important topic, Amy, and it comes up in many ways and has for years, right? People have asked us questions about, “When times are bad, should we be raising money?” I mean, we hear that again and again. So it is important, I think, that we address this question of:

Is your sky really falling? How would you know if it were falling?

And what can you do about the fact that at least some of your board members are going to feel like the sky is falling, and that’s going to make them have some cockamamie ideas that you better be ready for.

Amy Eisenstein:
Yes, yes. At a minimum, some of your board members are scared that things are really not going well for your organization. And you’re right, they’re going to react emotionally from fear. We’re joking around about the sky is falling. Of course, you probably know the Chicken Little story, and really thinking about how to get your team to think critically and rationally, not to jump to conclusions to avoid hype or hearsay or whatever it is.

So, all right, let’s talk about some things to try and evaluate rationally whether the sky is falling. What might that mean or look like, actually, for your organization and how you can plan for it, and of course, avoid it.

Andrea Kihlstedt:
The big picture of what would happen if that were really the case? Well, you can point to a number of things. Maybe your fundraising would be precipitously down for one reason or another. Maybe nobody is attending your programs anymore. Maybe parts of your facility are shut down because something is going on in your town. Maybe values that you have championed are no longer popular or are no longer approved by people who used to not think twice about them.

So, these are things that do happen and that might make you think that your little world is coming to an end and it might have negative consequences to your organization.

Reassuring Your Board and Staff is Paramount

Now, in thinking about this, and there are a couple of big points that I want to make, and then we’re going to dive into them. But one big point that I want to make is for the most part, when it seems that the sky is falling, that things are really turning sour, at least half, probably more of that is emotional and it’s contagious. All you need is a couple of staff members and a couple of board members who are saying:

“Oh my, our organization is going to be in serious trouble and we’re not going to be able to do this and we’re not going to be able to do that.”

And unless you have really thought about it beforehand, that kind of emotional negativism spreads. So, you have to think about it beforehand so that you can counter it when a board member, when a board president or a board chair or a key board member says:

“Listen, I think we better stop fundraising because times are really bad and the economy’s going to go down the tubes.”

You need to be able to address it right then and there. And unless you’ve thought about it beforehand, you’re going to be wordless.

Amy Eisenstein:
And you may get into this emotional spiral yourself. You’re hearing things about funders making cuts or foundations getting 10 times the number of applications they’ve gotten before, or maybe you didn’t get funding from a funder that has been a loyal funder or you got a huge government cut. So, some of this is based on reality and some of it’s based on emotion and hearsay.

And so the question is, how to sort through which is which, and what are you going to do in various circumstances? I think that’s part of the point is trying to really think critically and be proactive rather than reactive when things happen, and things do happen. And so what are the different —

Andrea Kihlstedt:
Well, Amy, before we go farther, I want to say that the other big point that I want to make is that pretty much every time something goes awry, something turns sour, something goes bad, something goes wrong, it opens the door to something you can do, which could be exciting, which could be a real opportunity.

Start with a Mindset Shift

And the challenge is to move yourself from the, “Things are really bad,” to the opportunity that is opened up by that. And that starts as a mindset shift and that ends up with some very practical things that you can actually do. So, that’s number two point that I want to make.

Number three point that I want to make is no matter… If you have an organization that has a robust fundraising program, we’re not talking about organizations that are totally dependent on government funding, let me be clear. But if you have a robust fundraising program that does a variety of things to raise money, the more your fundraising program has focused on individual donors who have the capacity to give significant gifts, the more stable your fundraising program is going to be, and the more opportunities you have to rely on those people and involve those people when things go awry.

So, that’s point number three, that all of this sky is falling issue should be pointing you in the direction of increasing and building your major gifts program over time, whether you’re in a campaign or not in a campaign, because having a robust major gifts program is going to give you balance and stability even when things seem bad.

Amy Eisenstein:
Such an important point.

Engage with Your Board, Your Donors, and Your Community

So, just to continue on that, I mean, the opportunity that you were pointing to earlier is talking to those donors, right? If you have two donors that your whole program rises or falls on, whether it’s government or two individuals that fund your 60%, 70%, 80% of your program, think you’re in a precarious spot and you probably know that. And it’s probably been that way for a long time.

So, the question is how to start talking to your board or continue to having the conversation? How do we really engage people in the community that have the ability to support our programs in meaningful ways? And how do we go to them to talk about the things we’re facing, what they might recommend, how they might think about these things, and sort of take it outside the boardroom?

You might, with community leaders, business leaders, philanthropists, have some new ideas, have some fresh thinking about it, and identify people that want to help in meaningful ways. I mean, that’s the idea. So, if your organization has 20 or 30 people like that, you’re going to be on much more solid ground than if it’s two people like that. So, really being proactive, thinking about, “How can we stabilize rather than being so dependent on a few funders?”

Andrea Kihlstedt:
Right. I think one of the things that we hear a lot is that organizations will have a big grant they were counting on from a local foundation, turned down. And they have been getting big grants from this organization again and again, but all of a sudden, for some reason, the foundation turns its attention to something else.

And that feels like the sky is falling. We did not get our largest grant from the organization that typically supports us, “Oh, the sky is falling.” Now, foundations are notoriously fickle. Even when times are really good, they are fickle. They have a short attention span. Board members change, their mission changes.

Somebody decides that they’re not going to support this kind of program anymore. They’re going to support that kind of program. Foundations often like new things. They like new, exciting bobbles. So, after you’ve had a new exciting program and it’s up and running, their interest in supporting it over the long run is not going to continue.

Planning in Advance Makes the Difference

So, this is going to happen and you better plan for it. And the way to plan for it, again, is to build your program on a base of recurring major donors from individuals who tend to be very consistent in their giving, and not fickle. They tend to give more and more as they become more and more connected to you and feel better and better about you and your organization.

So, “The sky is falling, our foundation grant didn’t come through.” You need to protect yourself because I promise you it’s going to happen.

Amy Eisenstein:
Right.

Andrea Kihlstedt:
That’s important.

Amy Eisenstein:
I think one of the points is be proactive. So, scenario plan, that means scenario planning, “If this happens, then we do that.” So, thinking ahead to, “What if we get significant funding cuts in this particular area?” And even going to those donors in advance and saying:

“All right, these are the scenarios that we’re planning for. What have we missed? What haven’t we thought about? What would you recommend? What should we be thinking about?”

So that they’re involved in helping you so that they’re not surprised when you come to them and something’s happened or you’ve planned for it. A way of engaging them will help them be partners in your work instead of just going to them when you’re in the dire situation. If you can do it proactively, it’s going to be much more advantageous.

Adopt an Annual Planning Process

Andrea Kihlstedt:
Yeah. A very specific way to think about that is that instead of having a strategic planning process once every three years or five years, when your five-year plan is over, then you do it again, why don’t you think about having some kind of a planning process every year where you engage your key funders and board members and other key leaders in your community?

You could really build that into your process. So, every year for a day, you bring those people together, you look and see what’s happened, you look at the environment, you look and see what’s gone up, what’s gone down, what problems you’re seeing on the horizon, and you get people’s advice.

Now, if you did that as a regular part of who you are as an organization, what would happen when times feel when someone cries Chicken Little, “The sky is falling.” You could easily say that’s exactly why we have an annual planning process where we bring our key partners in to look at what’s going on and to have course corrections given the current environment.

That would go a long way to help someone who’s saying, “Oh, things are terrible.” It’s like, we are planning for this in advance. Every year we look at these key indicators. Every year we bring in some of our major people to talk about them and to come up with scenario plans and the opportunities that are right in front of us.

So, do more of that kind of planning, and particularly do more of that kind of planning when times do feel less secure. We do sometimes, some periods in history, feel less secure than others, and that’s the time for more of this planning.

Amy Eisenstein:
And I just want to acknowledge, of course, this is easier said than done. This is not a fast or quick or easy fix. And some of the organizations that we’re working with are facing serious challenges right now, and they would be in a better position if they had done this earlier.

Final Thoughts

So, what’s the best… I don’t remember what the analogy is. What’s the best time to plant a tree? It was 10 years ago, but the second-best time is today. It would’ve been better if you had been building these relationships with your funders and with donors and individuals for the past decade. But if you haven’t, there’s no better time to start it than right now.

And will it take time? Yes. Will it take effort? For sure. But you will be in a much stronger position six months from now and 12 months from now and two years from now if you start having these really important conversations and doing some scenario planning with key members of your community.

Andrea Kihlstedt:
And board members. And if you’re an executive director and you’re listening to this, a lot of this falls on you. A lot of how you approach these times falls on how you talk to your board members, how you talk to your staff members. And you don’t want to be hiding your head and say, “Everything is fine,” if it’s not, but you need to be a steady voice in saying:

“Here’s what we’re facing, here’s what we’re doing, here’s the way forward, here’s how we’re evaluating the situation, here are the things we’re doing to look for opportunities.”

That falls to the executive director, supported by the development director. But if you find yourself in a panic mode, things are going to be much harder for the organization to handle.

Amy Eisenstein:
Excellent. All right.

Well, as always, I just have to throw in, if you’re thinking about a campaign, if you’re looking at planning, if you have some exciting projects on the horizon and want to talk to us, that’s what we’re here for. We’d love to learn about your big projects coming up and how we might help you raise the money for a campaign.

So, visit the Capital Campaign Pro website, capitalcampaignpro.com and sign up to talk to us. And we thank you for listening and we’ll see you next time.