One of our clients was told to cut their fundraising budget by 15%. No discussion, no data, just cut it.

I understand why boards do this. Fundraising is one of the biggest line items. When money gets tight, it looks like the obvious place to start.

The problem is that fundraising isn’t a cost. It’s how you make money. Cut it and you don’t just spend less – you raise less.

Data from nonprofits we’ve worked with confirms this. Across a significant group of organizations, the relationship between fundraising expenditure and fundraising income is consistent and clear. Spend more, raise more. Spend less, raise less. It really is that direct.

Cutting the fundraising budget is the one mistake that does the most damage in tough times. It causes more damage than the tough times themselves.

We’ve seen this before

In 2008, and again during the pandemic, this played out the same way. Nonprofits that kept fundraising came through fine. Some had their best results ever. The ones that cut back lost income that they could never recover. Others took years to get back on track. And unfortunately, some didn’t make it at all.

It isn’t just recessions. After every major crisis we’ve observed, the pattern is the same. The nonprofits that kept fundraising raised money. The ones that stopped, didn’t.

The damage wasn’t caused by the crisis. It was caused by the fundraising decisions that were made as a reaction to it.

There’s no denying that fundraising is hard right now. I don’t want to pretend otherwise. Fundraisers are being asked to do more with less. But pulling back on fundraising spending makes every one of those problems worse, not better.

Your donors are still here for you

When boards talk about cutting fundraising, they often assume donors are hurting too. Some are. That deserves a compassionate response.

But think about who your donors typically are. They’re often older, 70 or above. Their kids have grown up and left home. They don’t have mortgages. They aren’t the demographic being hit hardest right now. And your mid-level and major donors are likely to be even more stable than that.

Data from nonprofits we’ve worked with backs this up. A small proportion of donors – sometimes less than 1% – account for around half of total fundraising income. And that is the least likely group to be affected by economic pressure. Your biggest givers are probably more financially stable than you think.

When we decide not to ask, we’re making the decision on behalf of the donor. We’re assuming they can’t or won’t give before they’ve had the chance to tell us themselves. Since when was that our call to make?

Your donors give because they care about your cause. That doesn’t switch off when the world gets uncertain. Don’t make that choice for them by staying silent.

The case worth making

If you’re facing pressure to cut, show your board where fundraising income comes from. Show them what happens to your income when programs like acquisition stop – and crucially not just in the current financial year – but in the next 2, 5, 10 years.

But this also doesn’t mean carrying on as if nothing has changed. Here are 3 smart adjustments worth making:

If some channels get too expensive, shift budget to ones that are working.

Keep connecting with your donors with genuine thankyous, real impact stories, a phone call that isn’t asking for anything.

Don’t overlook direct mail. There’s no algorithm gatekeeping a letterbox, and right now there’s less competition for attention in the post box than there’s been in years.

The nonprofits that come through tough times with their donor bases intact do so because someone presents the data and holds firm. That can be you.

We’ve put together a free guide with the evidence and the arguments in one place, something you can read yourself or share with your leadership team before that meeting.

Download Fundraising in Tough Times: 5 Things Smart Fundraisers Do When the World Gets Uncertain. It’s free, it’s practical, and it’s built for exactly this moment.

If you’re facing budget cuts, please share your experience by leaving your reply below.

Related Blog Posts:

• To Survive Scary Times, Don’t Freak Out!
• 9 Smart Ways to Protect Your Fundraising in Uncertain Times
• 5 Things to Keep Fundraising Strong in Strange Times