It's been a tough year for a lot of us. And as much as we hate to say it, we as fundraising people probably face cuts. You can't hold it off forever, but you need to be smart about what programs you put aside and which ones you keep going. Let's talk about what you'd be crazy to cut:

 

Net?positive Donor?cultivation Programs
This term refers to anything you're doing that's gaining net revenue. Basically, if you cut these programs, you're cutting revenue. It sounds very "Business 101," but a lot of nonprofits do not measure net gains--they measure gross revenue and assume that big dollars mean success. Unfortunately these organizations may be hosting events that produce a lot of money but are losing money overall.

For instance, say you have an event that costs you a lot of money and it brings in a lot of money. If you're looking at net renuve and return on investment (the efficieny at which you raise your money), you can say, "Well, you know, for every dollar we spent, we've brought in $1.50." That's not so great in terms of returns. However, in a time like this, that may be acceptable. (In a more flush time, you might say, "You know what? The opportunity cost and the staff time we're spending could be spent in a different way.")

For now, simplify it down a little bit to this: Are you measuring net revenue? Would this cut cost you revenue?

 

Donor Acquisition
This may be more difficult to defend from the "ax-man," as donor acquisition typically costs you money. You lose money in order to gain donors, and cutting it actually means that your organization's bottom line looks better as you do it.

However, donor acquisition is your organization's food; if you do not acquire new donors now your organization will suffer in the long-term. Typically, the first year you have a new donor you break even--whatever that acquisition cost you, you get about that much back. However, moving forward, second-year donors will typically return 2:1 and third-year donors about 3:1. As you go to the fourth year and beyond, your return on investment skyrockets to about 10:1.

Therefore, if you make cuts in acquisition now, you are making the decision that your organization's recession is going to last two, three, or more years longer than THE recession. We do not know how long this economic downturn is going to last, but if you want it to end when it ends (and not years later when your donor value catches up), do not cut donor acquisition.