Double Down on Development
In the face of financial uncertainty, organizations—particularly nonprofits—are often confronted with agonizing choices when it comes to budget cuts. The instinct to preserve as much funding as possible for direct programs and services is understandable; after all, delivering on the mission is what inspires staff, volunteers, and supporters alike. Yet, one of the most counterintuitive but vital principles in nonprofit management when facing financial crisis is to invest more, not less, in fundraising and development even at the cost of program and service delivery.
This may seem difficult—perhaps disheartening—especially when the pressure to cut costs is mounting. It can be tempting, or even appear responsible, to reduce spending in areas that do not produce immediately visible mission outcomes. However, cutting back on development and fundraising does not merely shrink overhead; it erodes the very foundation of an organization’s future capacity, restricting its ability to weather storms and to thrive when the environment improves.
When budgets are tight, it is tempting to view a fully resourced fundraising and development team as discretionary, rather than essential. However, data and experience from organizations of all sizes and sectors reveal a different story.
At its core, fundraising and development serve as the engine that powers an organization’s mission. These departments provide the resources that are essential for sustaining programs, expanding impact, and fulfilling long-term goals. When investment in these areas is reduced, the potential for future revenue shrinks, leading to a cycle of scarcity that can ultimately threaten the organization’s existence.
Fundraising Fuels Mission Delivery:
Without robust funding streams, even the most impactful programs cannot operate at scale or, in some cases, survive at all.
Development Drives Innovation:
Investment in development supports innovation in donor engagement, new fundraising strategies, and partnerships that can unlock new revenue sources.
Donor Relationships Require Consistency:
Building and maintaining trust with donors is a long-term process, and any reduction in stewardship or outreach can have lasting negative effects.
Short-Term Savings, Long-Term Losses:
While reducing development expenses can immediately free up funds, the long-term consequences are severe. With fewer resources dedicated to fundraising, the pipeline of new donors dries up, existing donor relationships may atrophy, and overall revenue declines over time.
The Cost of Rebuilding:
Once a development program has been scaled back or dismantled, it can take years—along with significant new investment—to rebuild donor relationships and fundraising capacity to former levels.
Missed Opportunities:
Economic downturns and challenging environments often inspire generosity among those with the means to give. Organizations that continue to invest in development are best positioned to identify and secure these opportunities.
We have seen this before during past crises like the global financial crisis of 2008 and again during COVID. Organizations that made the difficult choice to maintain or even increase their investments in fundraising weathered downturns better than those who cut development budgets. Not only did they maintain stronger relationships with their donors, but they emerged from the crises with greater organizational strength and often larger resource bases. Investing in donor engagement, communication, and retention pays dividends when conditions improved… and they will improve.
Investing in development does not necessarily mean spending more indiscriminately. It means making smart, strategic choices about where resources will have the greatest impact, and showing that you are doing this will help you gain buy in from key stakeholders, like your staff, clients and board members.
For many nonprofit leaders and staff, the idea that programs and services must be reduced while other departments are protected can be emotionally wrenching. The mission—the work itself—is why so many dedicate their careers to the sector. But cutting development support to preserve current programs is a false economy. Without the continued flow of resources, not only do programs become unsustainable, but the organization loses its ability to rebuild or expand in the future.
I used to always give the example of a client I worked with many years ago that was an adoption program for cats and dogs. Everyone wants to save the dogs, but without food, electricity, a building, staff, adoption recruitment, volunteer walkers…the dogs are saved. Sustainability is key right now. Even if you have to save fewer dogs for now, staying in place to save more dogs in the future is vital.
A willingness to make tough choices now, and to invest in the infrastructure that supports fundraising and development, is an act of stewardship. It ensures that the organization will be able to serve its beneficiaries, not just today, but for many years to come.
