As fundraisers, we often like to read the economic tea leaves to predict donor sentiment and willingness to give. Over the past 10 years or so that has often been tied to GDP as an overall indicator of the economy, or the stock market as a sign that individual wealth is increasing and how quickly. But as we enter 2022, we have all come to learn about another, slightly more complicated indicator: inflation.
There are many theories as to what is causing inflation, whether it’s a lack of products available due to supply chain issues or money that was pumped into the economy to keep it afloat through the COVID pandemic. While talking heads can argue the causes, what cannot be argued is that inflation is now being felt throughout the economy.
So what does this mean for nonprofits? The most obvious answer is that just like other households or businesses, costs are going to be higher. Employees, for example, will likely seek higher salaries because more money is needed just to maintain their current standard of living. Supplies and rents are also more expensive.
With costs rising, organizations will likely look to fundraising to help fill the gap. The trouble is that fundraisers have to turn around and ask individuals and businesses, who are also feeling the effects of inflation, for a gift. But as we all know, if you don’t ask, you likely won’t receive. So how do you go about it?
For individual donors who you see and have regular conversations with, be straightforward about how inflation is impacting your organization, but focus more on the cost of services provided versus salaries and overhead. Position their gift in terms of impact (feeding x number of people, for example) and explain the cost it will take to have that impact over the next year.
It gets a little trickier when considering mass appeals, like direct mail or online giving. You want to gently suggest to your donors that their gift does not go quite as far as it used to. One way to do this is through the ask string.
Consider doing a quick analysis of what amounts your donors are giving at, like the example below. Donors typically like to give in round numbers, increments of 10 or 25. Once you know where those most frequent amounts are you can choose asks strings that are just slightly above that, and again positioned in terms of impact.
For this example we might choose to build our ask string around the four most frequent levels--$250, $100, $50, and $25. Our goal is to get these donors to upgrade to help cover increased costs by showing them the impact their gift has. Let’s use a classic example of an organization providing food for children and families in need. Our ask string might look like this:
$280 – Provides dinner for a family of 4 for two weeks
$140 – Provides dinner for a family of 4 for one week
$70 – Provides lunch for a parent and a child for a week
$35 – Provides one week of healthy after school snacks for a child
These amounts provide a more subtle upgrade than asking donors to double their gift when inflation may also be impacting their household. Like a one-on-one conversation, this appeal encourages donors to think first about the impact they want to make, then how much that will cost.