by Zain Jaffer
Many American companies just barely survived revenue wise after COVID hit, if they did survive it. Now they are getting by with high corporate debt interest rates and lower earnings. Their customers are skimping on new purchases because there is less cash to go around for everyone.
Unless a nonprofit foundation has a steady set of reliable benefactors, it could encounter some difficulties for some of its planned projects given a possible recession scenario.
So where does that leave nonprofits that have depended in the past on corporate and government largesse. For the US government, having a $32T debt and a debt ceiling that might not be lifted by the Congress means that external grants may need to go. Consider that Treasury Secretary Janet Yellen is already tapping into government pensions just to sustain operations. Most likely support for nonprofits will be extremely difficult if not impossible.
Corporate donors might not fare much better. Job cuts and layoffs are part of the headlines these days. Many smaller companies have had difficulties during COVID that they were just beginning to recover from, and now they are paying higher interest rates to service corporate debt.
That formerly generous corporate donor might not show up at your next fundraising dinner and decline politely. After all, what is the use of a tax-deductible grant for the year if they are not expecting taxable profits for the next few quarters.
Trying to solicit from individual donors may not be that different as well. If people are paying higher rates for car and housing loans, if their savings are depleted, and their credit cards are being maxed out, then donations to nonprofits are the least of their priorities.
So what are some possible means to augment support for nonprofits?
Keeping the merchandise and publication subscription revenues flowing is one way. If you already have a thriving merchandise physical store, consider going online with it. Aside from shipping physical items from the store like shirts, stuffed toys and other merchandise, do consider NFTs. These can be collectible NFTs that depict something the Foundation has done in the past. If you have a treasure trove of old photos, it might be time to use those creatively as NFTs.
If you have an extremely talented creative team, make sure your content is compelling to ensure your Foundation remains in the radar of your existing and possibly additional new donor base. Coupled with a good social media strategy, this can help ensure that the dollars flow even when revenues are down.
If you have a paid subscriber plan, try to see if you can expand your base. Generation Z and Alpha will start to dominate the workforce when some of the Millennials start to retire after the Baby Boomers. Look at what topics they prefer that are also relevant to your Foundation. Many people might be willing to sign up and retain their subscriptions if the content in your newsletters and publications are useful and interesting to them.
Recognizing that your traditional funding sources may dry up, and looking at new ways to raise or maintain funding is key to the survival of nonprofits. Many people and companies, as well as the government, might not fully appreciate the value of what you bring to the table.
Be creative. It is up to you and your team to hustle and bring in the needed funding to survive the next few quarters.
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