Characteristics of Nonprofits That are Staying Afloat Despite the Recession

A small study of nonprofits in the Northwest by Retriever Development Counsel revealed several telling characteristics of nonprofits that seem to be surviving the recession relatively intact:

Those nonprofits with diversified funding, good management, and “learning cultures” seem to be coping much better than others.

Successful nonprofits appear to be putting more focus on development activities, particularly donor relations, including cultivation of major donors.

Participants in the study suggested that it is particularly important for:

Board members to actively take part in fundraising, cultivating relationships, and being ambassadors for the cause.

Nonprofit leaders to set a tone of calmness, communicate clearly regarding decisions, priorities, and organizational goals. They need to be very visible and involved with individual donor fundraising

That good internal communication among the organization’s team members is key to survival in this economic environment.

The researchers said that the successful groups are not necessarily those with the biggest budgets or the ones that had a great fundraising year in 2008. Rather the hallmarks of viable nonprofits include:

Diversified revenue streams and varied ways for donors to give.

Engaged leadership.

Investment in development staff, resources, and activities.

Proactive planning…looking to do more, not less.

Organizations that were seeing a decline in fundraising blamed the economy, not internal flaws; and generally focused on only short-term solutions such as cost containment, staff and program reduction, or dipping into reserves or credit lines.

These results coincide nicely with the tips laid out by Kim Klein recently in the “Grassroots Fundraising Journal” that we reported recently.

The recession is providing a an opportunity to observe what nonprofits should and should not do to survive future crises. We hope the studies and surveys keep coming.