Reprinted with permission from Inside Philanthropy
As the coronavirus crisis worsened, Jeff Comfort started calling donors who’d promised to make an ultimate gift through their wills to Oregon State University where Comfort is a vice president. “I am not calling to ask for money,” he told them. “I just want to see how you’re doing.”
Comfort quickly noticed a pattern, one that the veteran fundraiser observed in other tough times like the Great Recession. In 20 to 30 percent of his calls, he says, the donor would say something like, “I know this call is not about money, but I’d like to talk about my estate anyway.” It was, Comfort says, “the best week I’ve had in a long time.”
It’s a very different fundraising story, however, at the Christian Appalachian Project, which provides food and other services to the needy, according to chief executive Guy Adams.
“It is too early to tell how this will affect us both short and long term,” he says. “I think I’ve noticed a slowdown, but I don’t have all the facts yet. That’s just an impression.”
Donors to the Christian Appalachian Project, Adams notes, are mostly people recruited with direct mail and online appeals, and they behave differently than higher education donors. Unlike alumni—or grateful patients contacted by a hospital where they received care—direct-marketing donors often react with apprehension when Adams contacts them.
“I worked in higher ed for 15 years, and that is a different constituency,” Adams explains, noting that he and his colleagues are trying to reach donors now. “In higher ed, I could visit nine out of 10 people I contacted. But when relations come from direct mail or online solicitations, people are not as open to a personal relationship. It’s just different.” Instead of nine out of 10, it is about 30 percent of donors who respond to his overtures, he says.
One new thing the charity is trying in the coronavirus era: holding online staff meetings and inviting donors to send them prayer requests. After the staffers pray together online over those requests, they mail a card to each donor, stating that his or her prayer request was honored.
As coronavirus cases and deaths mount, charities are struggling with office closures amid increasing demand for service from the newly unemployed and others. Fundraising has ground to a halt at some organizations but is being transformed at others.
Eileen Savage, the lead fundraiser at Cranbrook Educational Community, a private school and graduate arts academy in Bloomfield Hills, Michigan, is working from home to try and move two special events online. The events, both including auctions, are held every April. Projected to net $1.25 million annually, they are critical to Cranbrook’s bottom line. But Savage can only guess about whether they’ll be successful in the new format.
On one hand, she says, Cranbrook may attract new people by relaxing the previous requirement to attend in person. On the other hand, she says, the ability to build relations and communicate her organization’s mission could be compromised.
“We talked about whether to cancel or postpone,” Savage says. “If we just let these events go, we’re basically telling constituents that we don’t need their money. We can’t afford not to have their support. It would send the wrong message.”
To help the online events succeed, Savage says, Cranbrook is offering options to donors. For example, both events are ticketed, and donors can write off only a portion of the ticket cost, so “we asked people to convert the entire ticket price into a gift, and most of them are saying yes,” Savage says. In other cases, Cranbrook is offering to refund part or all of what people have spent to attend. “Time will tell as we move into the virtual format whether we can make or surpass our goal,” says Savage.
One encouraging sign: A donor offered to match new gifts made to Cranbrook’s arts academy, Savage says. “This is the kind of goodwill and positive gesture coming out of these hard times.”
Economically challenging times present opportunities, she adds. Earlier in her career, when Savage worked at Indiana University in the Great Recession, the downturn decimated funds that donors had endowed to generate a certain amount each year for scholarships.
“It gave us an opportunity to reach out to donors and tell them the funds were not producing,” recalls Savage. “We asked donors if they’d make annual contributions in the amount their fund would have produced. This was a chance to engage donors in a way they could be helpful. Most who could did. They really stepped up.”
Reaching Out Now
Like Oregon State University’s Jeff Comfort, who’s seeing good results from calling bequest donors, many fundraising experts are advising charities to contact donors now. While Comfort doesn’t advise asking for money, he told charities in a recent webinar that they should familiarize themselves with charitable provisions in the recently passed federal stimulus bill.
For example, one provision in the law allows donors to deduct 100 percent of their adjusted gross income for cash gifts, excluding donations to supporting organizations and donor-advised funds. “I expect a number of six- and seven-figure gift to come out of this,” Comfort says. If fundraisers know about this and other charitable provisions in the stimulus package, they can offer helpful information to people who express interest in supporting charities now.
But, he warned, business as usual in fundraising right now can easily backfire. The University of Mississippi learned that lesson recently.
Ole Miss, as the university is known, produced a solicitation that was soon removed from its website when numerous people protested. Noting the escalating pandemic, the solicitation told alumni and others that now is an opportune time to revisit their wills. The mistake? Appearing to profit from a growing tragedy.
“I agree generally with reaching out, but you have to be really thoughtful and clear,” says Jon Gossett, the top fundraiser at Arena Stage, a 70-year-old performing arts center in the nation’s capital. “You don’t want donors and others to think you’re taking advantage of an emergency, and it is critical to demonstrate a business plan going forward. With longtime members and subscribers, he says, “we’re making calls and sending notes that start with a question: ‘How are you doing in this difficult time?’” Many people, he adds, “eventually ask how they might help, which is an invitation to describe how they can support the theater.”
With its doors now closed, Arena Stage officials have worked to map out three scenarios for eventually re-opening at varying dates and the implications associated with each one. And the theater also created a new Roaring Back Fund, with the goal of raising $1 million. So far, the new fund has attracted more than $400,000.
Pushing the Limit
Some fundraisers are being pushed to the brink by the coronavirus. “It’s been 24/7 with the hospital for 12 days now, and it is only getting more intense,” wrote Dyan Sublett, president of the Martin Luther King Community Health Foundation in Los Angeles, in a text response to a reporter’s inquiry. “I’m not ignoring you, but I haven’t even had time to return calls from my daughter.”
In the pandemic, Sublett has been working every day from 5:30 a.m. until midnight, she says in a later interview. She has not thought about fundraising at all in “probably a week,” she says. Instead, she and her colleagues in development have been pressed into helping the hospital obtain desperately needed emergency medical supplies like masks and field hospital tents.
“I never thought I’d be ending my fundraising career in disaster relief,” Sublett says, adding that her email inbox is jammed with ideas for raising money in the coronavirus crisis. Far more helpful, she says, are the multiple grantmakers who’ve approached the hospital unsolicited and are now loosening or abandoning their application requirements. They’re enabling Martin Luther King Community Health to use money as it sees fit in the escalating crisis.
“If you know a great nonprofit, do this,” Sublett says. That’s her way of telling donors what healthcare and other virus-fighting charities need right now.
Doing More With Less
Other charities are scrambling to achieve their missions with fewer resources. At the World Food Programme, which feeds 16 million school children in developing countries every month, “we know the virus is going to disrupt supply chains, so we have to deliver food in a different way,” says Barron Segar, a longtime fundraiser serving as the charity’s chief executive in the U.S. He says that World Food Program USA (which spells its name differently than the parent charity) hopes to develop alternative delivery systems by working with partner organizations it has learned about from the United Nations.
Meanwhile, World Food Program USA, which annually raises at least $35 million in private support, is lucky that it hasn’t yet had to dip into reserve funds, says Segar. “It is the first time in my career that I remember spending so much time looking at reserves and expenses,” he says. “I’m looking at it multiple times weekly.” On the plus side, he adds, “we have significantly underspent because no one is traveling now.”
Like other charity leaders, Segar sees the coronavirus pandemic as a very different crisis from other tough economies fundraisers have negotiated.
“This is very different from the 2008 financial crisis, which did not displace people immediately,” says Segar. “We had more time to adjust our budgets then. It seemed like a much slower process. With this pandemic, the entire world changed within a week.”
Still, whatever differences the coronavirus crisis brings to fundraising now, development professionals can take comfort from the fact that charities have historically persevered through difficult times, says Ron Schiller, a former fundraiser who founded the Aspen Leadership Group, an executive search firm.
In his long development career, Schiller led three fundraising campaigns that all succeeded despite being affected by, respectively, the 1987 stock market crash, the 2001 terrorist attacks, and the Great Recession.
Donors Turn Inward
“Fundraising is always a challenge,” says Schiller. “In good times and times of widespread economic challenges, donors will focus on their own well-being, their families, their jobs, and the organizations about which they care in different measures, according to their individual circumstances.” The only way to get through to them, he adds, “is to focus on the relationship, and listen first. For those who want to help, we need to be near, dear, and clear. Bring them in rather than leave them out, be more inclusive than ever. And be clear about what is truly needed now.”
Some donors, Schiller adds, “won’t want a conversation at all, now. But let donors tell you—don’t assume.”
At the Aspen Leadership Group, Schiller says that he’s heartened by the fact that nonprofit searches have not been canceled. “Some searches are delayed or postponed, but many are moving forward in a more virtual environment.” To help client organizations, he and his colleagues have published several resources in the wake of the pandemic, including an article on educating new employees online rather than in person.
With the coronavirus ravaging the globe, giving is sure to decline this year, experts say. The only question is by how much—and, of course, how long the downturn will last.
Behind a Drop in Giving
Barlow Mann, a Memphis planned giving consultant, says several factors in addition to the coronavirus will push donations down this year, and possibly beyond:
The tax law that took effect in 2018, causing donors to report fewer itemized contributions on tax returns,
The Dow plunging 10,000 points and wiping out trillions of dollars in personal wealth,
A return to recession after a decade of economic growth, and
Rising unemployment and employment concerns.
“We’re all in for a wild ride,” Mann says. “People give from income or assets; both of those sources are under tremendous stress.”
Robert Sharpe, another Memphis philanthropy expert, agrees. Like Jeff Comfort at Oregon State, he’s observed a lift in people’s intention to make bequest gifts following financial crises. “Studies of philanthropic behavior during and after the Great Depression and the 2008 recession indicate that bequests written in prior years will help sustain many charities in future,” he says.
But the severity of the coronavirus pandemic, he says, could lead to another problem:
“People doing their wills now and in the near future may give less to charity due to understandable economic fears,” Sharpe says. And because wills written in the downturn may not be realized for several years, he adds, there could be an “echo effect” stretching beyond the current crisis.
While long-range charitable estate planning will endure, he says, “predicting an uninterrupted rise in bequest giving could give charities false hope.”