Making Your Nonprofit More Recession Proof

Making Your Nonprofit More Recession Proof

Even if an economic recession doesn’t appear imminent, it’s likely that the economy will eventually take a downturn. In the years between 1854 and 2009, there were 33 economic cycles, averaging about five years each. The longer a booming economy lasts, the greater the risk of an equally large recession. Even in the autumn of 2018, it was thought that the US was overdue for another recession by 4+ years.

Nonprofits can be hit particularly hard by recessions. The key to weathering the storm is to be proactive about preparing for what will eventually come down the economic pike. Here are some tips your organization can use today to make your group more recession proof.

Anticipate End Users’ Needs in Advance

If your nonprofit is a charitable one or deals with at-risk populations, you need to think about how a recession will not only affect your organization but also its end users. To avoid having to scuttle programs, think about creating a high-growth fund while the economy is still booming, and dedicate the dividends for rainy-day use in less prosperous times. Having reserves is always a good idea anyway.

If a recession looms, consider joining forces with other agencies that serve the same populations; you all want to survive a bear market. Internally, create an emergency plan for how you can meet users’ needs in different ways or with alternative resources should the bubble burst.

Tweak Fundraising Strategies

Fundraising is usually a mainstay of revenue for many non-profits. Before an economic downturn is the time to try experimental development strategies, not once everyone is tightening their belts. Think about using these three fundraising tactics:

  1. Don’t hold back on major campaigns while waiting for the economy to improve. Statistically, in the U.S., it’s only likely to get worse when overdue for a recession. Now, while we’re prospering, is the time to make those big asks.
  2. Once a recession is on the horizon, focus on going after donors who can make small donations. Even in troubled economic times, most people will give $5 or $10. Those contributions add up, provided they are cost effective to raise (e.g., email campaigns instead of mailers).
  3. Look toward future giving demographics. During a recession, older Baby Boomers and retirees are more likely to be concerned about holding onto income and Social Security. This is a good time to shift focus to younger donors who may feel less pinched.


Diversify Revenue

Of course, fundraising shouldn’t be your only source of revenue. While times are good, think about diversifying your revenue streams by taking into consideration:

  • “Friends Of” Memberships
  • Special Events
  • Renting out equipment or your facility


Bring on High-Power Board Members

Before a recession take a look at your board of directors. Do you have basic roles filled, like an attorney, a CPA, a tech adviser and a marketing professional? Examine your non-Profit’s goals, and recruit for the board accordingly, such as bringing on bank executives, local philanthropists or industry gurus.

Go Back to Basics

During a recession, everyone goes back to basics in nearly every sphere. For organizations, that’s offering essential services, evergreen content and pared-down events. Prior to the economy heading south, build a plan for how your Non-Profit could thrive in a simpler manner.

Adjust Spending

Naturally, your non-profit will have to adjust spending during a recession. To prevent getting caught unawares, evaluate spending now and look for places where you can make eliminations. Cut back on typical non-profit expenses like printing and mailing, in lieu of online communication. Use free services and social media for promotion.

Could your non-Profit work with a smaller office or no office at all? Can your staff work remotely? Before a recession hits is also the time to beef up volunteers, which is always preferable to letting paid staff go in order to save money. People who can’t afford to make cash donations may want to give somehow, and asking for their time is a perfect solution.