The Things We Do For Budget Cuts?!
Have you read the recent article on how American Cancer Society lost $30 Million dollars by pausing their mail acquisition program for 1.5 years? “Live from DMA: Direct Mail Hiatus Cost ACS $30 Million” featured in The NonProfit Times by Mark Hrywna
Ouch. The experience sounds painful for the ACS team as they went through a big organizational restructure. There are many reasons why organizations cut (or cut back) their mail acquisition; mostly we hear it is due to budget cuts.
So many organizations are forced to chop out acquisition mail to relieve a short-term budget problem.
By year two, the organization is trying to operate on a smaller budget based on the year before.
And the previous year’s chop repeatedly results in a decline in annual net revenue, decrease in active donors and a noticeable deterioration of the database size.
By year three, the panic sinks in with pushing for advanced strategies that seem too costly to consider.
Over and over, organizations continue to take this path. Imagine how advanced the organization would be if they simply stay the course.
It is sad to hear the loss for ACS! All the lost funds were needed to help eliminate and diminish the suffering from cancer. Fortunately, ACS has a strong well-known brand and quickly rebounded as explained in the article.
Unfortunately, most nonprofits don’t have such brand recognition and will take longer to rebound. If they can rebound.
In the article “Making smart cuts in a difficult federal budget climate”, featured in the Washington Post, columnist Joe Davidson reports from “Making Smart Cuts” by Booz/Allen/Hamilton (Hey, who knows most about expenditures and budget cuts than the federal government) that the best approach when dealing with a budget cut is to take a “systematic strategic approach” and leverage “opportunities”.
We are in a fortunate time in fundraising that we can share our experiences though so many resources. (Thank you ACS for sharing your story.) We have outstanding resources that help us fine tune strategies using analytics. We have so many more marketing channels that can be leveraged to build a trusting relationship with a donor.
All of these benefits in today’s time can be understandability overwhelming.
That is why it is important to embrace the experiences of your trusted advisors.
Do you need help leveraging an online and offline acquisition program to build your services?