Share Your Shortfall

Here’s a “hot take” for you:

If your organization has a shortfall, I encourage you to share it with your donors.  Sharing it will be good for your fundraising and donor relationships, both in the short term and the long term.

I know that sounds absurd to many people.  But this is a data-driven position.

Sharing a shortfall with your donors is a scary idea for many nonprofits.  Doing it usually requires a big shift in thinking.  So this is a longer post than normal.  I’m going to explain what we’ve noticed about three things:

1. Why sharing a shortfall seems like an obvious bad idea
2. The results when nonprofits run shortfall campaigns
3. Why we think shortfall campaigns work so well

We want you to get past the fear because of what’s on the other side…

“There’s no way this is a good idea”

Let’s start by talking for a moment about why sharing a shortfall feels somewhere between dangerous and dumb.  Here’s what “common sense” tells you about sharing a shortfall with your donors:

• It would reflect poorly on your organization and your brand.
• It will look like you’re bad at managing money.
• People won’t give.  (After all, if they think you are bad at managing money, why would they give you another gift?!?)
• Even if sharing a shortfall somehow brought in a bunch of money, there will be negative consequences in the future that will far overshadow any revenue that comes in now.

Furthermore, no one likes how it feels to send out a shortfall message.  Everyone working at the nonprofit, or leading the nonprofit, or on the Board will feel like the shortfall reflects poorly on them.

All of this makes sense.

And let’s add one more layer: no one ever talks about the results of their shortfall campaign.  Have you ever been to a conference where a fundraising professional was up on stage talking about how well their shortfall campaign went?  Nope.

There’s so much shame around this that no one talks about it.

Then we add the branding and marketing folks who don’t really understand how vulnerability is such a big part of fundraising success, and they actively push back on mentioning that the organization has a shortfall.

So we’re in a situation where people think shortfall campaigns are a bad idea, no one likes them, and no one talks about the results.

But in my experience, the vast majority of people have never seen the results of a shortfall campaign.  They just aren’t aware that…

Shortfall Campaigns Work Great & Don’t Have Negative Consequences 

This idea is so counter-intuitive that, until you have experience with multiple shortfall campaigns, there’s almost no way you’ll believe it.

But it’s true; fundraising campaigns that focus on helping an organization overcome a shortfall work great.  And they do not cause the negative consequences that people fear.

I estimate that I’ve helped on between 60 to 70 shortfall campaigns.  They’ve been for organizations of all different sizes and in all different sectors.  Here’s what happens:

• Donors respond in droves.  The letter / email / campaign is usually the second-highest fundraising campaign of the year, behind only the year-end campaign.  Often it’s the best campaign of the year, or the best campaign the organization has ever run.
  • The response rates are higher than average, the size of gifts are higher than average.
• The feared negative consequences do not happen, either in the short term or long term.  I’ve measured; they don’t happen.
  • I can’t emphasize this enough: in 30+ years of fundraising and measuring results, I have never seen a reduction in long-term giving or retention rates as a result of letting donors know you have a shortfall.  All of the things we fear – donors leaving in a thundering herd, donors complaining to the Chamber of Commerce, donors telling all their friends not to give – just don’t happen.
• There will be five or fewer conversations with concerned donors or Board members.  And when the situation is explained to them, about half of them will give you a gift on the spot and be happy they did.

Notice I’m not saying, “shortfall campaigns always raise enough to erase the shortfall.”  I’m saying that they always raise quite a bit more than an organization’s “standard” fundraising, and don’t have the negative consequences that people fear.  And the campaign will erase the entire shortfall more often than you think.

Those are the numbers.  Water is wet, the world is round, shortfall campaigns work great.

“I still don’t believe you… but if I did, how is this possible?”

I’ve thought about this a lot.  Here’s my take on the powerful mix of reasons shortfall campaigns raise so much more money than an organization’s “regular” fundraising.  And I suspect that, even though you might not totally believe my main thesis yet, you’ll look at this list and see how it makes sense:

• Your donors care about your organization, and about your beneficiaries or cause. 
• Donors do not want your organization to be forced to reduce services.  And they know that’s what can happen when there’s a shortfall – you’ll have to cut programs or staff.
• Donors quickly understand the problem you’re having – all of us have had a “shortfall” of our own at some point in our lives.
• Humans respond to clear needs.  Witness the recent giving to help the victims of Helene and Milton.  And a shortfall is a clear need.
• Your donors know you’re a nonprofit.  They know you don’t have all the money, and they know that funding can be hard to come by sometimes.
• Oftentimes, when an organization shares a shortfall, it’s the first time they’ve Asked their donors in a way that makes it very clear that help is needed now.  The contrast between the urgent ask and the regular fundraising (“Things are going great, we’ve helped so many people, it would be lovely if you considered partnering with us”) makes donors see and feel that their help is needed now.
• Humans love to help, and helping feels good.

All of those ring true, right?

Put all of them together and you can begin to see why donors respond so generously when an organization shares that they have a shortfall. 

Should you go looking for a shortfall?  No.  Should you share a shortfall four times a year?  No again.

But when you have a shortfall, trust that your donors care, and share it with them.  You’ll be so glad you did.  Your donors will be glad you did, too, because they love helping you.

In my next post, I’ll share a story of an organization that had a shortfall, had all of the perfectly normal concerns about sharing that shortfall with their donors, and decided to run a shortfall campaign.