Across the country, nonprofit organizations, colleges and universities, and hospitals are feeling the economic impact of the COVID-19 crisis. Nonprofits are being forced to close their brick-and-mortar operations. Colleges and universities have already cancelled one on-campus semester and many are considering another, which will mean eliminating revenue from student tuition, meal plans, or room and board. And, hospitals are being forced to cancel or postpone elective surgeries, treatments, and procedures that are typically revenue drivers to handle the influx of COVID-19 patients.
These losses are adding up. Revenue centers are at risk -- even from organizations that you might expect to see thrive right now, such as hospitals. The Medical University of South Carolina went from making several million dollars per month to losing $30 million in one month. The president of Johns Hopkins University estimates that the institution will lose $375 million next fiscal year. Colleges like Drexel and the University of Miami are being sued for tuition reimbursement for the lost spring semester. Leaders are left wondering: how do you strategically work to repair this damage while there is still an ongoing crisis?
Untapped Revenue Sources
You have probably already been in contact with your top 100 donors and are aware how they can help your organization. But, your organization likely also has unmanaged donors that have not been contacted by a gift officer during this crisis.
Imagine a nonprofit that has 1,600 top prospects. If they are all rated at $100,000, then that represents $160M in potential new revenue in a pool of donors that is not on any fundraiser’s radar. Obviously, the organization would never be able to actualize 100 percent, but even tapping into just 10 percent would be $16M in new revenue.
The fundraising workforce believes that they can make a difference -- according to our recent survey findings, 85 percent of respondents believe that fundraisers can influence the generosity of donors to make up for lost revenue. Historically, philanthropic giving during crises, such as the Great Recession or the terrorist attacks of September 11, stays consistent and continues to increase over time.
But reaching this pool of donors requires more than direct mail outreach. Personalized outreach from individual fundraisers to engage these donors with your organization's missions and needs will open the door to maximizing donations from this pool.
Lean Into Your Cause and Remain Mission Focused
When primary revenue drivers are at a standstill, organizations must look to other avenues for income. Despite brick and mortar closures, critical operations still need to be funded. Nonprofits will still need to serve their communities despite the pandemic.
Tapping into new revenue via fundraising can help prevent furloughs and layoffs. Keeping more employees contributing to your organization’s crisis response will help ensure that when the crisis is over, you will still be in a position to serve others instead of having to play catch-up for potentially years to come.
It is critical for organizations to have 30-60-90 day plans for strategy after the pandemic. Being able to fund short term operations will provide enough of a cushion for leaders to spend more time developing long-term strategy.
Revenue centers are facing major challenges all at once. Fundraising can be a core driver to protect and right the ship during these times by uncovering untapped opportunities so your organization can stay true to its mission, its people, and be ready to take on the next stage of 2020 and beyond.
It’s unlikely that current major donors will be able to bear the weight of revenue gaps. These revenue gaps will need to be filled by new prospects that may not have previously been on any fundraiser’s radar. Inaction to compensate for the loss of primary revenue will increase the cost of the pandemic on many organizations. And for many nonprofits, the cost of inaction will be insurmountable.
Now is the time to meet with your philanthropic leaders, ask what resources they need to expand outreach and deepen relationships, and ensure you see the other side of this battle.