Inflation is here, and for many nonprofits rising costs can mean fewer donations and higher expenses, a dangerous dual pressure that can make serving your community incredibly challenging. When inflation is hurting your nonprofit’s bottom line, there are a few ways you can take action to boost donations and keep your donors engaged.
What Nonprofits Need to Know About Inflation
Inflation is a serious challenge for many nonprofits. Just as your costs are going up, you often see a significant drop in donations. Donors may have changing financial situations, simply be afraid of the future, or may be reworking their own budgets as they face the same higher costs. It’s important not to panic. There are key, simple steps you can take to counteract the impact of inflation and partner with your donors effectively even in challenging times.
How to Talk to Your Donors About Inflation as a Nonprofit
Your donors are aware of inflation—every trip to the grocery store or the gas station is a painful reminder that prices keep climbing. For many of them, this may be the first inflation that can remember—or it may be a difficult trigger of challenging years they’d rather forget. However, while your donors are likely aware of inflation, they aren’t necessarily thinking about how that might impact the nonprofits they care about. This is an important time to educate your donors about the challenges of inflation as well as what they can do to help.
Lead with Gratitude
Whenever you communicate with your donors, you should lead with gratitude for their ongoing support and care. This is even more important when it comes to discussing inflation—if rising prices are creating challenges for your nonprofit, you should be especially grateful for the donors that have continued to support you already during all this uncertainty. Thank them for their faithful giving and the incredible impact they’ve made possible—start with gratitude, drive home the gratitude in the body of your letter or email, and end with gratitude.
Honesty and Transparency
Be frank with your donors. If your costs have increased 15%, tell them that! They’ll feel like a trusted partner. Maybe it’s something simple, like utilities, that’s driving up prices. Your donors can likely relate, and sharing about the challenges you are facing will help them understand why you are reaching out without feeling like you are just asking for more. It can diffuse tension and prime them to be more likely to respond positively.
Use Numbers Sparingly for Effect
Numbers and statistics mean a lot in an example like this. There’s a reason that many news stories about inflation include headlines about the price of gas or the increasing cost of staples like eggs. These numbers, especially for things they buy regularly, drive home what can be an impersonal and abstract concept like inflation. Your donors will empathize if you share a statistic about how much your costs have risen, the amount your last utility bill increased, or other examples that help humanize your work.
Consider How This Impacts Programs
Will inflation make it harder to impact as many people? Maybe one of the rising costs is the food you purchase to feed people, the supplies for students, or whatever else is a main part of your mission. By connecting the challenge of inflation to tangible needs for your nonprofit, you will help your donors understand why their support is so important in this challenging time. Be ready for donors to offer unconventional support, however, if you go this route—they may try to connect you with discounts on those items or even donate the items themselves.
Don’t Forget About Non-financial Donations
In-kind donations are a real way that donors may want to support during inflation. Perhaps they have items they no longer need or a special connection that would allow them to help. Volunteering may be another area where they are willing to help that can positively impact your nonprofit—consider tapping volunteers for an upcoming fundraising event or other activity to reduce the load on your staff and drive your costs down.
How to Avoid Your Donations Being Cut from Donors’ Budgets
When inflation rises, many people notice their regular expenses going up. For people who stick to a bugdet or don’t have a lot of disposable income, these rising costs can lead to serious changes in their lifestyle and spending choices. Some of your donors may even be considering cutting back on their charitable donations if money is tight—a sad though understandable reality. Each donor has to make the decision for themself, but there are ways you can work to reduce the number of donors who cut their giving to your due to shrinking budgets.
Showcase How You Use Their Donations
Remind donors of the impact they are having. By showcasing how their giving is helping, you can encourage them to keep contributing and showcase the great work your organization is doing. Focused on both the business case (the statistics and numbers of their impact) as well as the personal stories that showcase how their donation is making a difference.
Donors Give to Relieve Suffering
Your donors didin’t give to you because they had extra money lying around—they gave to relieve suffering they saw and to make a positive impact in their community . Those motivations haven’t changed, so reminding them of those realities in a way that acknowledges they may be facing new challenges can be an effective way to encourage them to continue supporting your work. Reminding them how inflation is impacting your work and the people you help already can also refocus the conversation on the need again, rather than on the challenges your donors may be facing.
Leverage Company Matches
Help your donors have a bigger impact with their gifts by encouraging them to apply for company matches. If any of your corporate partners are still matching employee gifts, this can be a great way to help donors have a larger impact even as inflation reduces the value of their donations. Tools like DonationXchange can make setting up a company match for your nonprofit or your company easy and secure—making employees even more likely to give.
Keep Your Donation Processing Fees Low
During times of inflation, any way you can reduce costs for your nonprofit matters—both to your bottom line and to your donors. Keeping donation processing fees low is an important way to keep more of your donors’ money going directly to the work that matters. Tools like CharityGiving and DonationXchange keep processing fees and setup costs low and consistent to keep as much money as possible going towards your nonprofit. Let your donors know how you’re streamlining tools like this to be a good steward of they money they are giving.
Social Proof Is Still Important
Your donors showing others that they are still giving is an important piece of fundraising during inflation. By having donors share through peer-to-peer fundraising campaigns and events that they are committed to supporting your work even with rising personal costs, you help normalize consistent giving among the rest of your donors. Reaching out to all of your donors asking for gifts right now may feel insensitive to some, but a more passive approach where donors encourage their friends and family to give may be more effective and prevent any negative reflection on your organization.
The Importance of Upgrading Monthly Donors to Fight Inflation
Your regular small dollar donors are part of one of the biggest fundraising area impacted by inflation. As costs rise and the relative value of a dollar decreases over time, your regular supporters who may commonly give $10 or $15 at a time are slowly becoming less and less impactful. Finding ways to upgrade these donors over time is absolutely essential to fight the impact of inflation. Consider a special upgrade campaign inviting them to have an even bigger impact—but make sure that your thankfulness for their continued generosity leads any communication you send out. It’s important they don’t feel like you’re just hitting them up for money yet again. Keep this ask very soft, and do what you can to be transparent about rising costs and the challenges inflation brings.
Be Straightforward and Gentle When Fundraising During Inflation
The best thing you can do to connect with your donors, drive giving, and build a positive brand for your nonprofit right now is by being honest and winsome. Inflation causes anxiety and fear for many—be a voice of hope and possibility. You can tell the truth about rising costs while also reminding your donors that they can be a part of something bigger than themselves. By showing that you trust them enough to be honest, you’ll deepen your relationship with your faithful donors and help drive the conversation around how people can support their community during challenging times. Inflation won’t last forever, but positive relationships and interactions with your donors will pay long-term benefits long after prices have cooled down.
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