Growing Reliance on Emergency Fundraising Puts Nonprofits at Risk

Driven by climate change, conflict, and the continuing effects of the pandemic — often dubbed a polycrisis — the global landscape is changing, and emergencies worldwide are becoming increasingly interconnected, frequent, and severe. How will donors and nonprofits respond when everything is a crisis?  

Across the globe, 339 million people require urgent humanitarian assistance, according to the World Health Organization, up nearly 24 percent since last year. That’s one in 23 people globally — the highest level in a generation, according to the United Nations.  

In this world of increasing need and concurring crises, relying on emergency appeals to increase revenue seems logical. Yet, doing so presents financial and strategic risks and needs to stop. Here’s why:

Disaster fundraising can produce zero net gains. Following the devastating Turkey-Syria earthquakes earlier this year, the organization I work for, Blue State, which helps nonprofits with fundraising, saw donations to our clients increase tenfold. Doctors Without Borders/Médicines Sans Frontières, for example, raised upward of $11 million in the immediate aftermath of the earthquakes, more than three times what it raised to address needs associated with the war in Ukraine. 

Nearly all humanitarian organizations issue disaster-specific appeals following major disasters such as the earthquakes. In part, this allows the public to transparently see how nonprofits will use funds. Unfortunately, these groups rarely translate one-time donors into a loyal base of support. Only 8 percent of donors acquired this way continue giving to the organization in the years following a disaster, according to the Center for Disaster Philanthropy.

What’s more, the most recent ‘Giving USA’ report found that, despite an uptick in donations in 2020 and 2021, charitable support fell 10.5 percent in 2022 after inflation, with individual giving showing the greatest decrease. To be sure, international aid was the only cause that saw an increase, growing 2.7 percent from the previous year, but last year was also full of so many disasters those donations did not meet all needs.

Peaks and valleys in fundraising are not new. But the data demonstrates that people aren’t giving the way they used to. As a result, donors who respond during a crisis are even less likely to keep giving than in years past, making it more likely an organization won’t meet its financial needs beyond emergencies. Such boom-and-bust moments make it hard to plan annual budgets and execute holistic fundraising programs.

Experts have long decried the “nonprofit starvation cycle.” Emergency and one-off appeals exacerbate the problem by placing the focus on immediate fundraising needs rather than expanding the base of unrestricted support required to keep a nonprofit healthy.

Rapid-response appeals aren’t good philanthropy. Yes, the outpouring of support and empathy is noteworthy. Yes, generosity in the face of suffering is commendable. And yes, fundraising appeals can meet immediate needs. 

Yet, philanthropy should not only keep the lights on today, but save lives and improve the world for tomorrow. If the goal of fundraising is, as the Association of Fundraising Professionals states, “to stimulate a world of generosity and positive social good,” an increase in emergency appeals and one-time donations does neither. In the long run, it may even put both at risk.

Increasingly urgent appeals can turn off donors. Crisis campaigns are built on the urgency of the moment. But ever-more dire appeals for funds may train donors and audiences that crisis is the only time to give. The need for unrestricted support, nuanced as it might be, can be lost in the garish spotlight.

Political fundraising offers a cautionary tale. In an era of increasingly partisan politics, the outreach tactics of candidates and campaigns keep ramping up their dire and existential language and threats. Dialed-up urgency has become the norm with the risk of alienating supporters.  

Many articles and op-eds decried the state of political fundraising during the 2022 midterm elections. While these complaints skewer the tactics from a practical perspective — crowded inboxes and over-the top-language — studies point to more deleterious consequences. Over time, increasing urgency can turn off a recipient, regardless of how worthy the organization or appeal may be.

Crisis giving is not sustainable. While emergency fundraising may fill gaps in the short term, nonprofit boards and executives should evaluate their fundraising and marketing practices with sustainability in mind.   

They should start by rejecting budgets and multiyear financial plans that bake emergencies into business as usual, thus pushing fundraising to rely on ever-more-urgent appeals. Long-term organizational health, including staffing, program costs, and mission objectives can’t be addressed if annual budgets are met only when disaster strikes. Organizational strategy and budgets should instead plan multiple scenarios and potential futures to ensure resiliency in the face — or absence — of major disasters.

Similarly, when organizations build the cost of emergency fundraising into their overall marketing and fundraising budgets, it takes just one crisis to consume six months of funds meant for well-planned campaigns and brand-building strategies. While revenue neutral, this results in an influx of emergency donors and resources that are not sustainable. Because emergency donors are unlikely to keep donating after the emergency, this strategy reduces an organization’s base of loyal donors over the years.  

Boards and finance departments should work with the marketing and development teams to understand the amount of financial investment they need at various levels of emergencies and retain contingency funds. Not only will this help clarify how much cash they need for emergency appeals, but organizations won’t be forced into a devil’s bargain of using budgets to either meet emergency needs or build a sustainable base of loyal donors.

Balancing short- and long-term revenue points to another key objective for humanitarian organizations — setting goals for audience and brand-building. Measuring annual revenue and the number of new donors is standard, but few organizations determine how well their brand resonates with their audience and improve where needed. 

Brand health matters for an organization’s long-term resilience. Donors with strong loyalty who come to a nonprofit on their own are more likely to keep giving. On the flip side, the growing frequency and severity of emergencies will increase contributions and annual revenue, but can mask a shrinking base of public support and loyal donors.  

Trust-based philanthropy, which gives the power to grantees to determine how to use funds, offers a path out of the restricted-funding starvation cycle. Asking a group of committed donors to provide unrestricted support — even during an emergency — could ensure short-term needs don’t undermine long-term sustainability.

Increasing humanitarian need and decreasing donations is a slow-moving disaster that’s easy to overlook. Philanthropy needs to embrace the long game. Recognizing the issue is a start, but it will take a comprehensive approach to ensure the field remains strong and important causes get the support they need. We can’t keep waiting until the next disaster strikes.