david

Buy High, Sell Low

david 01/22/2008 Fundraising Strategy
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It’s not what you should do, but if you are like most people, it probably is what you will do.

As I write this, stock markets around the world are crashing.

Now that prices are falling fast, many people want to sell their stocks and mutual funds as quickly as possible. These are the same people who bought when prices were high. They follow the herd.

Right over the cliff.

Being in a herd has its advantages. You keep your head down. You follow someone else’s lead. You can blame someone else when something goes wrong. And when you run off the cliff you have plenty of company.

A few smart people will see the bigger picture, think for the long term and will view this as a buying opportunity.

Call them contrarians, loners or visionaries; they are definitely not part of the herd.

What does this have to do with fundraising or marketing?

Everything.

Past experience has taught me that when there is a big stock market pullback or an economic recession, most organizations respond by following the herd: they cut back.

They cut back on expenses. Which means cutting back on mailings. Which means less contact with their contributors.

Their thinking is: if people are losing money and the economy is in shambles, people will contribute less money. So why even bother asking. Let’s just stop now and save the bother and expense.

The person who gave you $20,000 last year because his hedge fund investment paid off handsomely may not contribute anything this year because the fund has just gone broke.

On the other hand, the person who has been loyally sending $36 twice a year for the past five years is still going to contribute. And may even increase his donation.

Why?

Because he understands that when times are tough, people need even more help. And your organization is the one doing the helping.

But there’s a catch. You have to ask.

If you lower your head, run with the herd and cut back on your mailings, he’ll just give his donation to someone else.

The contrarian has the smarts to continue mailing when others pull back. The visionary sees opportunity when others see disaster. He will be the one who profits in the long run.

Will you be one of them?

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