Nonprofit leaders and fundraisers are always up for a challenge. Our careers demand innovation and ambition as we champion our causes. For animal advocates, we are a voice for the voiceless. We fundraise for crucial work with the suffering of billions at stake, and yet animal and environmental causes only receive 3.6% of charitable giving. Still, we don’t let that stop us, and every year our sector raises a little bit more.

Despite our careful planning and budgeting, our financial future is now unknown as a pandemic sweeps the globe. In a recent survey of more than 500 charities globally about the impact of COVID-19 on their operations, 67.9% of respondents said they’ve seen a decrease in funding and reported difficulties in reaching donors, while 33.9% indicated an increase in operational costs. 97% are projecting a decrease in their funding in the next 12 months and 41% expect their funding to decrease by more than 21%.

As unemployment rises and economic uncertainty darkens the shadow of a looming recession, nonprofits must persist. Fortunately, we can turn to data to help guide the difficult decisions we may encounter during this crisis.

The Great Recession

While the unprecedented nature of the shutdown caused by COVID-19 makes it difficult to predict how philanthropy will be affected, we can look to history for an idea. The Great Recession reduced charitable giving by 7% in 2008 and 6.2% in 2009 (adjusted for inflation). WellBeing International’s Andrew Rowan has been tracking annual financial data for approximately 3,500 animal protection organizations (national and regional organizations with annual income of $100,000 or more) for the last twenty years, and fortunately did not observe any decline in income over the 2008-2012 period. However, giving to animal and environmental causes (combined) is estimated to have decreased by 9% in 2008, and from 2008-2012 animal and environmental organizations experienced a closure rate of 3.1%, a 0.7% increase from baseline.

How we got to that point is just as important. While the stock market may have fluctuated, charitable giving remained steady at the start of the recession. It is important to remember that the impact had a lag of about 9-12 months from when the larger financial crisis occurred. This lag is often attributed to the fact that donations are based on the previous years’ stock market results. Knowing there might be a delayed impact should be taken into consideration as we analyze our budgets and assets, both this year and next.

While we know that our sector will likely take a hit during the recession, we should also examine how donors themselves responded. Charitable giving moved toward local poverty-related causes; funding to food banks rose by 2.2% in 2008 and by nearly 32% in 2009.

The decline of the stock market tends to hit larger foundations and big individual donors harder. Charitable giving by wealthy Americans (people with a household income of more than $200,000 and/or net worth of at least $1 million) dropped by more than a third between 2007 and 2009.

In a Blackbaud report on the macroeconomics of fundraising, we are reminded that “in a recession, donors cut back on both the amount of money they give and the number of organizations they give to. We have also seen an inverse relationship between the unemployment rate and the number of donors giving to participating organizations.”

Where should we expect a change in revenue? Across the board. One study revealed that among revenue sources, losses were wide-spread from individuals (losses for 53% of organizations), corporations (losses for 44% of organizations), and foundations (losses for 42% of organizations). Nearly two-thirds of respondents with endowments reported that their endowments fell by 20% or more. 9% experienced a decrease in contributions from their volunteers.

It took time to recover: by 2012, charitable giving was still well below its pre-recession level, but it was growing. In time, the tide did turn back in our favor.

Charitable Giving and COVID-19

As we ponder the past and focus on the future, let’s examine what we know about donor intentions right now. Many believe that the economic damage from COVID-19 may hit charities harder than the last recession, and some suggest that animal charities are among the most vulnerable. There is some research to help shine a light on a way forward.

In a brand new Faunalytics study of 1,000 U.S. adults, we found that roughly equal proportions of respondents said they were more and less likely to donate to an animal charity because of the pandemic. Respondents also claimed that they were more likely than usual to donate to charity because of the pandemic. A Better Business Bureau survey commissioned to gauge donor reaction to the pandemic found that close to one-third of Americans plan to give more to charities in 2020.

However, self-reported data may be subject to bias and we must treat the claims in both studies with some degree of skepticism, since data from the 2008 recession suggests that overall donations are likely to decrease substantially. And, as we know, there may also be more targeting of donations toward poverty-related causes, which could divert funding away from animal charities. We should treat stated intentions as the most optimistic of possible outcomes, and advocates must think strategically about how they’ll respond as the wave of the recession approaches our shore.  

Rising to the Challenge

Despite everything nonprofits have been up against, our sector always steps up to the challenge. Nonprofits seemed to take one of two approaches in their response to the Great Recession: conservative fiscal management or new entrepreneurial strategies.

Many organizations turned to conservative financial management practices. Examples of this include cutting administrative costs, eliminating travel, switching to cheaper products/services, relying more on volunteers, postponing new hires, and implementing salary freezes. 34% had to resort to eliminating staff positions.

On the other hand, many organizations engaged in innovative entrepreneurial activities such as increasing marketing efforts, developing new giving opportunities, expanding advocacy for funding, introducing or raising prices for fee-for-service activities, building collaborative relationships with other nonprofits, or starting a for-profit subsidiarity.

Which approach fared better? A Johns Hopkins study of 1,400 organizations found that entrepreneurial strategies tended to be more effective than many of the other strategies. “While substantial majorities of the agencies pursued many of the fundraising and belt-tightening strategies, their likelihood of achieving “successful” or “very successful” financial performance was about on a par or slightly below that of all organizations. By contrast, far fewer organizations pursued the entrepreneurial strategies, but those that did were more likely than all organizations to report “successful” or “very successful” financial performance.”

As you think about the possible approaches and strategies your organization can take to weather the storm, remember to engage in effective animal advocacy by using research and data to inform your efforts. Faunalytics has conducted a series of Donor Studies to help grassroots fundraisers and development directors alike:

• The People Who Support Animal Causes: Descriptive Results. Learn all about the people who support animal causes, including what they do, what they like, and who they are.
• Donor Segmentation: The People Who Donate to Non-Companion Animals. This analysis compares people who donate to non-companion animal causes (farmed animals, wild animals, etc.) against companion-animal-exclusive donors.
• People Who Support Animal Causes: Who Gives More? Here we look more closely at predictors of monetary and non-monetary support to animal charities.

Armed with information, we have the unique opportunity to inspire a reconnection to charity. Isolated and unsettled, many people need something to connect with, to support, to believe in. The nonprofit sector gives people the opportunity to give back, to help others, to be part of something bigger. As advocates, we must remind our supporters and the public that we need them now more than ever.

Giving USA suggests focusing efforts on renewing gifts from current donors but maximizing the use of all fundraising tactics available. Be sure to ask people for contributions in a clear and focused manner. Call your donors to thank them, and be transparent when conveying the urgent need for support. Provide multiple giving options and engage with your stakeholders through multiple channels. Send information about planned giving to long-term donors. Educate your donors on the new universal deduction that allows taxpayers who don’t itemize to get a deduction. Make sure that each board member is a current donor and an active advocate for the organization.

Encourage your teams to get creative. Deploy effective public relations and media relations to communicate your mission broadly. Consider mutually beneficial partnerships. Create new virtual volunteer opportunities. Take no donor for granted and communicate continuously. Recognize every donor’s contributions and share the accomplishments they have made possible.

The animal protection movement and the nonprofit sector have an obscure, and likely uphill, road ahead. But data can help guide us through the ebb and flow of philanthropy, helping us to decipher how to best respond to the future by examining the past. Now is the time to lean into our missions, to be creative, to make direct asks. And if Faunalytics can help you at any step of the way, please reach out to us. We are here to support your advocacy and to help you succeed.

For further reading check out Faunalytics’ COVID-19 poll, our recent blog COVID-19 & Animals: Cutting Through the Noise, or our older blog, Emotional Labor, Burnout, And Animal Advocacy. Take care of yourselves fellow advocates, and we will get through this together.