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Plus We're Also Out Of Siracha!!!

The bad news just keeps coming and leaders are trying to assess what it all means to their nonprofits.

There's the stock market. And the pending recession. And the resurgence of both COVID and inflation. Plus, the Astros are still stranding too many batters on base and now the stores are out of Siracha hot sauce.

What's a nonprofit leader to do?

The Chronicle of Philanthropy ran a good analysis on the mounting economic challenges and the impact they could have on the sector. Here are the highlights:

Inflation - Rising prices for food and other necessities hurt the people you serve, and it costs more for nonprofits to meet their needs now. So far, donations to nonprofits do not appear to have suffered, but we need to remember that inflation causes people to reduce discretionary spending, and nothing is more discretionary than writing a check to a charity.

Stocks - Foundations don't seem to have reduced grant awards and most look beyond a bad economic quarter in making funding decisions. However, if predictions are correct and the market drops before flattening out for the next year or so, watch for donors and foundations to hit pause on their funding. This is especially true for people with Donor Advised Funds. DAFs are usually funded with stocks and bonds. Donors may decide to hold onto them until prices rise again and their value increases.

Consumer Confidence - People are worried about the future and the index that measures consumer sentiment has been dropping. If it continues, people are likely to reduce spending including donations.

The worst-case scenario is that nonprofits could see a drop in contributions from their large, middle and small donors at the same time.

How Leaders Should Prepare

Remember Why You Are Here. Groundbreaking Navy Admiral Grace Hopper had a favorite quote, "A ship in port is safe, but that's not what ships are built for."

In many ways, nonprofits were built for bad times. When people are most in need, nonprofits are needed most. Just as a ship's captain can't control the weather, nonprofits can't control the economic world around them. Like captains, nonprofits should focus on the things they can control - Making sure they are prepared and turning their face to the wind.

Adapt. Chances are that your organization survived the pandemic because you were willing to adapt and try new things. This is a new challenge, and you will need to try new new things.

Don't be Houston's "Best Kept Secret." At some point, just about every nonprofit board or staff member has said something like, "If people just knew about the great work we are doing, they would support us."

Guess what...No one can fix that but you, and a downturn is no time to hide your light under a bushel basket. Get your story down cold. Figure out how to show your impact. Let the world know about it. Start now!

Fix a leaky roof before it rains. Hopefully, you are not seeing a dramatic change in your funding. Don't wait until you have a shortfall to prepare. Take a strategic approach to your fundraising. Is your development team using a fundraising system that is geared to acquiring new donors and turning them into long-term donors by showing them the impact of their support? Is your board helping you fundraise? Are you using your communications tools to target donors at each phase of their journey with you?

What You Should Do Right Now

June is the half-year mark. Look at your budget and your annual fundraising plan. Did you meet your mark? Now do a "what if" analysis. What if your overall revenue drops by 20 percent this year? First look at the spending side and figure out how you would cut 20 percent from your budget.

Now look at the revenue side. What would it take to replace that lost 20 percent with new donors or cultivating the donors you have now? Raising more money to fill a gap is a much better option than reducing budgets. What do you need to do with your communications and outreach to achieve that?

If you are already behind your goals, Forbes provided 12 important steps for starting fresh in the second half of the year. It's worth a read.

If you would like to talk about the ways that you can use an integrated, focused approach to communications to get your story out and turn strangers into supporters, email us at

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