“What A Bear Market Means For Philanthropy And Jobs”: Five Takeaways

• A financial crisis may be upon us, but let’s not blow it out of proportion. According to McClelland, the U.S. economy has undergone 12 financial crises in the last 50 years—or about once every four years. “This one is likely to be in the middle of the pack,” he predicted, citing the low unemployment rate and other indicators of underlying strength. This assessment isn’t to discount the hardships that inflation is inflicting upon many Americans. In a so-called K-shaped economy, recovery comes slower for those at the bottom of the economic ladder.

>>>The Investment Mentality: What Nonprofit Leaders Need To Know

• This is the tightest job market in memory. With two job openings for every unemployed American, Rosales recommended strategies for getting creative about hiring and retention, including benefits tailored to staff such as time off dedicated to mental health, civic engagement, and other pursuits. “You can offer different things to different people,” she said, “but it has to make sense.” Beyond pay and benefits, she asserted, “People want a seat at the table, and they want to feel valued.” (Discover our Talent Services.)
• Authenticity counts. Inflation, war, democracy in peril, climate change, racial reckoning…. In times of uncertainty, honesty matters more than ever before, both within organizations and in relationships with donors. Frequent and candid communication enables nonprofit leaders to instill and engender trust and confidence. This advice applies even if—especially if—you make a mistake or don’t have all the answers. “Bring folks along for the ride,” Rosales recommended. Citing widespread institutional distrust, McClelland noted that people appreciate it when you do exactly what you tell them you’ll do. (Read more.)
• Donors are clients. While the term client often refers to the individuals who benefit from an organization’s services, McClelland stressed that supporters, too, should be viewed through this lens. The social upheaval that followed George Floyd’s murder, for example, left many high-net-worth individuals feeling a powerful urge to take action. Echoing Green’s $50 million Racial Equity Fund met this need, providing them an opportunity to support Black and brown entrepreneurship. The pandemic and other crises are motivating everyday donors and mega-donors alike to increase their giving. CJ Orr affirmed that donors recognize and respond to innovation, adding that the arc of engagement from first encounter through first major gift can take a year or two. The sooner you start, the better. If an individual is hesitant to make a large cash gift during a downturn like this, planned gifts might be more palatable. (Read more.)
• “Stay in the batter’s box.” McClelland invoked a baseball metaphor to challenge nonprofits to continually seek out the next opportunity to advance their mission. Whether the nation is experiencing a bear market, a course correction, or a full-blown recession, these are challenging times, and this is precisely the reason why now is the moment to launch that capital campaign. Many of Orr Group’s partner organizations are moving forward with campaigns and soliciting large blended gift commitments. The response has been encouraging. (Find out more about our Campaign Services).

Board members will fundraise for something they love and believe in, CJ Orr maintained. Open-ended conversations with donors to discover their beliefs, just like similarly unstructured dialogue with staff, lay the groundwork for building on shared values.