State of the (political) Economy
If you thought fundraising in a bull market was tough, then you’ve got another thing coming.
Just in case you are living under a rock, here’s a quick rundown of the state of the American Economy:
- Inflation is at 40-year highs
- US consumer sentiment is at 10-year lows
- Recession fears have businesses, investors, economists, and everyday Americans spooked
Political organizations are not immune to these broader market conditions, and neither are political donors. Now more than ever, campaigns and advocacy groups need to focus on capital efficiency and plan accordingly.
Here are some tips for navigating these headwinds:
Check on your burn rate:
No one knows how bad it will get or how long it will last. Political teams need to prepare for any scenario and keep a close eye on their monthly burn.
In the event of an economic downturn, being capital efficient doesn’t mean being cheap, though. Invest in campaign expenditures that produce a fundraising return and hold off on costly operational expenses. Trust me, the lawn signs can wait.
Revisit your budget and make a plan B and C in case your fundraising doesn’t meet your original expectations. Scale your organization both aggressively and deliberately. This means ramping up your spend at a sustainable rate without hindering your progress. This is a difficult balancing act. The last thing you want to do is run out of money too early and be forced to make difficult budget cuts, but don’t leave money on the table either.
Reevaluate your raise
Make sure you have a well-balanced fundraising operation. This means diversifying your funding sources between digital (small-dollar), major-donor prospecting, and an events program. Don’t put all your eggs in one basket.
In an environment of economic uncertainty, less active political givers are the most likely to turn off the spigot. For fundraising call time, focus on high-propensity major-donors. At Trailmapper, we score potential donors on 3 main criteria: recency, frequency, and size of gift. That way we can properly prioritize and identify the best opportunities.
If donors start to tighten their belts, they may be less likely to consider new opportunities and focus instead on the investments they've already made. There is an old adage in major-donor fundraising: the easiest money to raise is from people who already gave. Take the time to develop meaningful relationships with your high dollar supporters. Keep them up to date on your progress and momentum. Leverage “Match/Max” campaigns to re-engage your early supporters by asking them to either match their first gift or max out. For example…
- If Remy Buxaplenty gave $500 in Q4 2021, ask Remy to match his previous contribution with another $500 today.
- If Doug Dimmadome previously gave $2000, ask Doug for $900 to bring him up to the individual max*.
As always, treat donors with respect and show appreciation. Major donors want to be part of a winning team. Don’t treat people like ATMs.
One team, one dream
Get every department of your organization - finance, comms, and political - rowing in the same direction. Use political activity and your comms strategy to support your fundraising efforts.
- Share political updates like major endorsements and favorable polling data with major-donors to get them excited and demonstrate viability.
- Capitalize upon earned media opportunities to bring new small-dollar donors on board.
These best practices can be easy to forget in the daily grind. Think of every comms and political activity as another opportunity to either A) engage your existing donor base, or B) capture the attention of new potential donors.
*for Federal campaigns. Adjust your Match/Max strategy accordingly based on the legal giving limits in your specific race.