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How-to Library • Featuring articles from past issues of Contributions

Overcoming Your Donors’ Psychic Poverty
Downturn demands new strategies

by Kay Sprinkel Grace

The roller coaster ride of the American stock market is no longer entertaining! Long-awaited recovery has been slow to appear.

Although there’s a certain philosophical acceptance of the market’s cyclical nature, and guarded optimism that the bottom must be near, the news about market performance — and even the value of the dollar against foreign currencies — is the same or worse.

An interesting and challenging outgrowth of the recent hammering of investments is the psychological impact it is having on those who invest not only in companies, but also in nonprofit organizations.

These people — whether their income and net worth are large or small, are experiencing “psychic poverty” — a feeling of scarcity, rather than abundance. And while who became fabulously wealthy (relative to their previous status) in the 90s are still much wealthier than before, the gap between their current and previous wealth is alarming to them.

of related interest

OF RELATED INTEREST: In The Ultimate Board Member’s Book, Kay Sprinkel Grace explores the role and responsibilities of board members, including the time commitment, the role of staff, fundraising responsibilities, conflicts of interest, group decision-making, board self-evaluation, and more.

Even people who aren’t invested in the stock market — whose holdings are in real estate or in their own companies — or who have no holdings at all — are feeling the pressure of uncertainty.

This spills over into their philanthropic commitments, and they’re hesitant right now to commit large sums or renew previous support “until the economy gets better.” That may take a while, and there are community needs to be met. So what is the best strategy?

Here are Ten Things you should know about helping people through a tough time of feeling psychic poverty. If you are successful, you will help them, and help your organization as well.

1. Recognize that people are honestly worried about the future.

While we see hopeful signs here and there in the economy, the truth is — this is a very challenging time. Don’t try to talk people out of what they’re observing and experiencing — you’ll sound like a slick salesman, not a professional or a peer.

This is a good time to remember that we all have two ears and one mouth, and need to use them in that ratio. Most people right now just want to be heard: they have views on everything from economics to terrorism to local issues in your community. Give them a way and place to be heard.

Grace (Episcopal) Cathedral in San Francisco has been particularly successful at this, both through its on-site gatherings and through Grace.com. The forum they provide has retained for their constituency the intellectual, spiritual, social, and emotional involvement that is clearly needed many at this time.

2. Be genuinely accepting of comments, even among the still very wealthy, that they feel poor.
There’s a relative aspect to feeling poor: some feel it, some don’t. Someone worth millions, now worth only half of that amount, may feel poor.

In our family, during the Great Depression, one of my father’s aunts was married to a clergyman who died at 37 leaving her with five children and no money. They were very poor. One day her children came home and told their mother there was a food drive for the “poor” at school. They wanted to bring something.

Aunt Maggie went to her cupboard and found some cans of soup — ones she could hardly afford to give away — and sent them to school. Her children never knew they were poor, because they had never had much to begin with and because Aunt Maggie always focused on the things they had, rather than what they did not have.

Today, with the decline in relative (and absolute wealth), people are painfully aware of what they no longer have (or may no longer have). We need to accommodate this, while beginning to position our mission and issues as worthy of even diminished investment.

3. Emphasize the relative safety of an investment in your organization.

As people mourn their risky investments in now-dead or dying companies and industries, we can mount a good communications program based on the impact of investments in our organizations. Returning to what we know works — focusing on results, not needs — we can show that our ROI (return on investment) is fantastic.

Lives are altered, communities are bettered, children are fed and clothed, people are housed, and great art and music fill our halls — all as a result of community investment.

Glide Memorial Methodist Church in San Francisco — a major social and community spiritual and social center — has a few well-placed billboards in San Francisco right now, offering their programs as a safe place to invest your money. This is particularly appropriate for this center of the dot.com boom, but in other communities across America a similar message about our nonprofits’ return on investment needs to be stressed.

4. As well as emphasizing the safety of an investment in your organization, communicate the impact an investment has.

This could be a time for instituting some notable shifts in the way people think about their money and its uses. It could be that one of the permanent benefits of this time of extreme readjustment will be the realization that a “balanced portfolio” is a metaphor for life, as well.

As we read stories of those who survived the World Trade Tower tragedy or other life-threatening events or diseases, we realize that the ultimate answer for many of them has been to simplify and savor. Philanthropic investment provides that opportunity, too.

Get a fresh start on the way you communicate with your investors. Even if you’ve already mastered the importance of conveying impact, not needs, use more human interest stories. Keep them simple and to the point.

Illustrate your rehab program’s impact by having a person whose life was changed write your annual appeal letter. Bring people who have benefited from your programs to donor receptions and to special events. Have them speak briefly at key gatherings.

Years ago, a children’s service agency had a very high profile speaker come to its 40th anniversary celebration and talk about major trends in child development. Impressive, but not nearly so much as the young man in his 30s who spoke from his heart about his years in their care from the age of 2 to 10, and how it had changed his life. Now self-supporting with a family, he said he owed it all to them. There were few dry eyes in the room.

5. There has never been a better time to practice good donor and community outreach.

Not only are people seeking a sense of community as we consider what’s happened to us as a country, they’re also looking for stable values-based organizations that will serve as ballast during these stormy times.

Assure them that yours is just such an organization.

Spend more time reaching out and letting people know that as a result of their investment in your organization lives have been enriched. Use the Internet and other venues to share your success stories. We’re all searching for the good in the news these days. Be proactive in providing it.

6. If you’re in an area where there’s high unemployment, think of ways to involve those whose work is gone or has changed.

One organization benefited itself and several key supporters who had lost their jobs in the “dot.bomb” experience in California.

These individuals, without work but with some short-term financial stability, turned their energy towards volunteering. They were ably guided by the organization and given new responsibilities that enhanced their sense of self-worth.

Concerned about their financial future, they no longer continued their generous gifts — but the time and talent they provided were a significant investment.

When the tide turns, they will be back among the financial contributors as well — having set their psychic poverty aside with a new job or career.

7. As you work with donors individually to help them feel included, cared for, and engaged with the ongoing work in which they’ve invested, gauge the time when you can ask them to become your ally and champion.

Ours is a profession that relies heavily on peer interaction. It’s the basis of our governance and our development programs. Make it the basis, as well, for inviting those who have either passed through their own feeling of psychic poverty — or who never felt it but are sympathetic to those who do — to become allies with you in developing strategies for helping others.

Get their permission to publicize gifts they’ve made during this time. Ask them to speak informally at board meetings. Have them accompany you on calls to family foundations and to individuals where they can provide their own “from the heart” account of how and why they contributed.

Encourage them to become informal advocates and have them talk about creative ways to sustain support even when cash flow trickles: by volunteering, asking others to give, getting people to join, and attending events.

8. Because fund raising is about relationships rather than money, this is an opportune time to show that we practice what we believe.

This may be our test time. The too-frequent complaint among donors is that we only contact them when we want money. Well, now is our chance to disprove this.

Keep those who have suspended their support in the loop regarding their previous investments. If we truly believe in the investment theory of giving, then what they previously invested in (a life, a program, a project, a discovery, a concert) still has residual benefit in the community and the organization.

The fact that they choose not to give now, while their stock portfolio, company, small business or other income is suffering, is no reason to abandon these supporters. We need to honor them and keep them involved.

9. If some people continue to cite lack of wealth as their reason for not giving, even when recovery seems imminent, look to other reasons for their disconnection.

Sometimes people find excuses not to continue their philanthropy, often because they feel disconnected from the values, vision, or mission of the organization. If this is the case, and if you’ve honestly tried to keep them engaged through difficult times, it’s probably a signal to let them go.

Remember, however, that these people will always be investors in your organization, even if they’re not currently involved.

From time to time, let them know what you’re doing, what your successes are, and that their previous investment was important. Who knows, they just might come back.

10. Be a model for the larger economic sector through your integrity, transparency, and values.
The excesses and abuses of power and the denial of investor rights this past year have been rampant.

As a vital, vigorous, and important part of the economic balance in our society, let people know that the public benefit (nonprofit) sector is committed to investor return, community involvement, and management approaches that are measured by the impact on the community.

Although we must attain and preserve a strong financial bottom line, it is not our only measure. We also must deliver on our investor’s and community values.

By living our values, we’ll not only raise donor confidence and increase investor satisfaction, we’ll also position our sector as a healthy, robust, and delightful place to invest.

As the economic cycle wavers, falls and rises, only to fall again, attention to your donors has never been more important. Their feeling of psychic poverty needn’t be fatal relative to their future investment in your organization. There are strategies, as outlined in these Ten Things, that will keep them involved while we’re going through these challenging times.

Kay Sprinkel Grace is the author of the Ultimate Board Member's Book, Fundraising Mistakes that Bedevil All Boards and Over Goal! What You Must Know to Excel at Fundraising Today, all of which may be ordered from Emerson & Church, Publishers. Kay is a prolific writer, creative thinker, inspiring speaker, and reflective practitioner. Her passion for philanthropy and its capacity to transform donors, organizations, and communities is well-known in the U.S. and internationally. Kay lives in San Francisco and is an enthusiastic photographer, traveler, hiker, and creative writer. When not writing, speaking, or consulting, you can find her with her children and grandchildren who live in San Francisco, upstate New York, and France.

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