Host: Hello, everyone. Welcome to another episode of the Go Beyond Fundraising Podcast. Today, I’m sitting down with two folks from Allegiance Group + Pursuant or AGP to discuss the impacts of the recent cuts made to USAID. We’ve seen several nonprofits scramble to replace some revenue they were not expecting to be taken away.  

To help us respond to some of the challenges facing nonprofits, I’m sitting down with Erin Robertson and J.C. Bouvier at Allegiance Group + Pursuant to discuss how nonprofits can respond. Erin, would you like to share a little more about your role at AGP and your experience in the nonprofit space?  

Erin Robertson: Hi, I’m Erin Robertson, AVP of Client Strategy here at Allegiance Group + Pursuant. I’ve been with the organization for about seven and a half years. I’ve done a lot of different work across the nonprofit space, everything from website development to fundraising and marketing strategies.  

I currently work with many of my clients in the digital space on digital advertising and email, but there are also a lot of omni-channel clients. We serve them with direct mail, advertising, and email.  

J.C. Bouvier: I’m J.C. Bouvier. I’m also an Associate Vice President at Allegiance Group + Pursuant, largely focusing on digital. I also play some executive sponsorship roles for some clients.  

Early on, I worked in arts administration and then made my way over to an international animal welfare nonprofit, where I worked my way up mostly through social marketing before it was social marketing. I then wound up as Director of Marketing and Fundraising for that organization.  

I then made the jump to the agency about seven years ago and have been doing a range of things, from spinning up whole digital programs to ensuring clients’ strategies are in alignment as we start to do more and more for them.  

Host: I’m so excited to share your experience with our audience. It’s cool that you both came to work at the organization around the same time.  

Having been and worked in the fundraising space for several years, you’ve seen the economy’s ups and downs, and how boom and bust cycles within that can affect the nonprofit space. What’s interesting and especially challenging about the cuts to USAID is that we haven’t seen anything quite like that before. It’s very different from an economic boom or bust. It’s a radical shift in how the government is approaching funding and its role in private versus public investments. 

We can’t necessarily change what’s happening at the top, but a number of nonprofits have been more affected by these cuts than others. Erin, what have you seen with some of your clients?  

Erin Robertson: Yes, unfortunately, I do have a few clients in the international aid or international development space that have seen pretty drastic changes to how their funding is coming to them. Thankfully, one organization is near the tail end of a USAID grant, so they will be able to continue that work. However, I think the long-term effects are still at the day-to-day level. It’s going to come down to what they can do in the future to fulfill this grant. 

Unfortunately, another organization had so much of its funding coming from USAID that it has been impacted in terms of its staff. It had to have some layoffs, so it’s a critical time as they figure out at a basic level how they will continue to be funded and operate as an organization.  

It’s been hard to watch, and they’re answering some tough questions. We’re trying to figure out how to serve them best and make every dollar go as far as possible.  

J.C. Bouvier: Kicking off with the USAID cuts is one of the aspects. But since that headline broke, there’s also been talk about the EPA. I have a client with some government funding through the EPA, and now that’s also at risk. They’re trying to be proactive and build a case for the court of public opinion about why they should continue being funded. There’s a lot going on. 

To Erin’s point about watching these teams struggle with figuring out their next steps, it’s an interesting time to be on the agency fundraising side.  

Host: And to that point, there may be more changes coming. It seems like more changes are announced every day. We wanted to have this conversation because there likely are nonprofits that haven’t yet been affected by funding cuts but probably will be in the future. Or they may be facing some uncertainty around the future of their budgets, specifically if they rely on government or public aid.  

In that light, many nonprofits are or will be looking to replace that lost revenue. What are some of the knee-jerk things nonprofits tend to do when faced with a sudden loss of funding? 

Erin, you mentioned staff cuts. That could also include service cuts if they do work that benefits others. Are there other strategies, ways, or methods nonprofits use to trim down their budgets?  

Erin Robertson: One of the first things we see is a pullback on media spend. It’s a gut reaction — it’s easy to see that as a big dollar amount that can be pretty easily cut. But the effects of that are much more intricate and need to be looked at with more care than just taking that money back and reallocating it. That’s one of the biggest things we see.  

They may also take a testing budget or something similar that doesn’t seem as concrete. That’s also been a knee-jerk reaction that we would advise against without carefully examining how that budget could be reallocated toward testing something that may benefit the organization differently. 

Looking at all the next steps that could come from these funding cuts takes time. Unfortunately, these organizations haven’t had the time to look carefully — at least, not recently. 

J.C. Bouvier: I agree. Sometimes, board-led moves are made to trim the sails on funding. It can be counterintuitive at that level to think that reinvesting in acquisition is what you want to consider, particularly when you have a genuine need. But if you’re suddenly losing revenue through external forces you have no control over, that’s a great appeal message. It’s one of those moments when increasing your media spend or thinking about testing some of those messages is essential — and doing that early and often.  

Over the years, we’ve also seen longitudinal reports about three-, five-, or even longer-year performance in our data sets. You see craters where, in economically conservative moments, organizations have pulled back from acquisition and paid the price in the following years. 

So, as difficult as that decision can be, acquisition would be one of the last things I would trim out of your budget. Hold onto that for dear life. 

Host: Let’s talk about some of the consequences of de-investing in acquisition specifically. We commonly see nonprofits have this reaction when they face a sudden funding loss, but what are some of the pitfalls of that approach? 

J.C. Bouvier: When you decrease acquisition — particularly mail acquisition — those donors who tend to be valuable and have a good retention rate can be hard to recover. Many of those donors get into a behavior pattern with nonprofits and become almost annual donors in some programs or recurring sustaining donors. New donors are hard to come by in those cases, so you want to hold onto them as much as possible and cover your attrition.  

There will be natural attrition there, so you want to make sure you’re reacquiring donors to cover that attrition rate. It’s even more important to invest in acquisition. 

Digital donors can be more transactional, but digital fundraising can also support overall donor lifetime value. It becomes another channel that’s sometimes easier for the donor to give through. If you can acquire a donor by mail and support them through digital, whether an ad, email, or website, those donors can become your best performers over their lifetime value. 

That’s what we’re trying to get to in our program work — that apex prey if you will; that multi-channel three-, five-, 10-year donor. Those are also the folks who can ultimately become legacy and bequest donors. 

Host: Some nonprofits may want to send out appeals to acquire donors or shore up their existing donors by capitalizing on some of the heated feelings surrounding these budget cuts. Some people talk about this as rage giving, and it can be an effective strategy to make it easy and convenient for people to give in the spirit of the moment at an event, with an emergency appeal, or through an advertising campaign.  

But in this instance, I also suspect that so many organizations are experiencing this that they may be holding back on some of these campaigns out of fear of the higher cost of advertising because there’s so much competition and demand. Or they may not want to fuel the existing negativity out there.  

Do you work with any nonprofits that are in that in-between place and are unsure of what their next right move is?  

J.C. Bouvier: I have a couple of clients who are hemming and hawing about whether to lean into that message — whether to identify their challenge by name or by implication, and that’s a tough decision to make. Again, that’s something you should test into.  

I also have some clients who have leaned into it, and that’s proven to be a good move for their audiences. They’re taking advantage of the moment. Given that we’re pretty early into the current administration’s life cycle, that could change. But we know right now that when the message is working, we should try to lean into it as much as possible and, again, continue to test.  

But it’s difficult. Sometimes, it’s not on brand to create a message that points to a specific cause. Sometimes, it’s better to be a little vaguer. Other communities want to hear that you’re taking a firm stance against the things they don’t believe in. Each organization has to figure that out for themselves.  

Erin Robertson: I agree. It depends on what’s natural for the organization. One of my clients doesn’t have a large advocacy arm. Instead, they’ve been leaning into the work itself — the work the funding does to support the organization. On-the-ground work and its impact have been a good message for them that deepens relationships with the folks already supporting the organization. 

Some other organizations I work with were initially a little hesitant to dip their toe in the water. But given what they’ve seen in the first couple of weeks with the administration, they’re feeling more comfortable leaning into some messaging that’s slightly different and a little more aggressive. Aggressive may not be the right word, but it’s different language, and they’ve seen that be impactful. 

Being open to trying a message is important because we’ve never seen anything like this before, particularly with some of the government funding cuts. 

Host: Definitely. The word “unprecedented” gets overused, but it certainly applies in this case. I love what both of you shared because it speaks to a universal truth with any type of organization, for-profit or nonprofit: having data about your donors and having some ways to triangulate what they care about.  

But also, as you both shared, have some dollars set aside for testing, knowing that you may not have all the information. Or the information you do have can’t necessarily paint a 360-degree picture of who a person is and what may motivate them to give. Have the curiosity to see what type of message may resonate based on what you do know, but also what kind of message may resonate based on what you haven’t learned yet.  

J.C. Bouvier: For sure. We have some early data on lead acquisition from one of our clients. Some folks are just angry. They want to join a list and be part of a community that’s angry about certain things, but they may not be your best donor prospects.  

This organization has a history of bipartisan support, which seems to resonate better with lists that look like their existing donors. So, it may be better to lean into the slower flow of those bipartisan interested leads rather than going after those raging, angry leads just because they’re available and willing to give you an email address but who may not be your best prospects. Just something to think about. There’s nuance even in that.  

Host: Oh, 100%. There are probably large groups of individuals who may be happy about certain aspects of some government efficiency. But they also don’t like seeing nonprofits and causes they support being negatively affected. Understanding that people are nuanced and can care about multiple things at once — and not putting them into one bucket or the other — is really important.  

Moving back into our conversation around funding, we’ve seen some clients effectively diversifying their revenue prior to all this unfolding. Could you share a few stories about nonprofits that have been ahead of the curve in this area and what we’ve learned? 

Erin Robertson: I’m lucky enough to work with an organization called Water for People. We started an omni-channel acquisition program for them about three years ago. We’ve also been doing direct mail and digital acquisition for them. So, they really did start at a great time. They had never done anything like this before.  

Over the past two years, we’ve developed a direct mail package that works and resonates with folks. We’ve tested and reached a point where we have a solid package that we know works. Now, we’re in a position where we can possibly increase the number of packages we send per year, knowing that what we can get back is pretty consistent. We’re able to take that into account when we’re doing budgets.  

But on the other side of the coin, we’ve learned a lot on the digital side — how folks react to certain messaging on the digital front and how they flow through the organization, if you will. We’ve learned what messaging to use from an advertising perspective to bring them onto the file, about how long it takes, and the type of messaging that gets them to convert to a donor.  

It’s great that we’ve had this time and been able to test a lot of different strategies to figure out what works. Now, we’re set up, and the client feels that they’re in a much better place than if they hadn’t made this investment two or three years ago.  

It’s a marathon; it’s not a sprint. The client and the organization feel much more positive about where they are in the face of funding cuts than they did two or three years ago. 

J.C. Bouvier: Pulling back to a macro strategic level, the idea of individual giving programs and increasing the percentage of sustainers on your file makes these moments better weatherable, if you will. Organizations can handle it much more easily when they have that durable revenue coming in from a larger sustainer base.  

One of the strategic sets of guidance we offer regularly concerns how to increase the penetration of sustainers in your donor file. For instance, defaulting to sustaining gifts on forms or setting up a sustainer day. Think about that as where you want the sweet spot of your donor type to be for those individual giving programs. Once you have those folks on file, your revenue gets less volatile year in and year out as you see that percentage increase. So, that’s one area. 

We’ve also worked with several clients on the age-old challenge between marketing/communications and the development side. Work together to build those bridges so marketing/communications can do a better job of telling a story and building the out-of-funnel and top-of-funnel activity that can pass through to donor conversions. Then, you can start cultivating additional sustainer conversions if you don’t convert them immediately. 

When organizations invest in those basic things before turbulent moments, it pays off for them during those turbulent moments because they’ve done the hard work to think through how those strategies connect. 

Host: I love those positive stories of nonprofits that are ahead of the curve in having that diversified set of donors investing in sustainers. If you were advising a nonprofit that isn’t prepared for these changes and is trying to figure out what the next right step is, what advice would you give them?  

J.C. Bouvier: Start where you are. If you’re struggling, use the marketing/communications and development/fundraising teams. If you don’t have a good, coordinated communications calendar, start to build it. If you aren’t doing advertising — digital advertising, in particular — start with a small testing budget and start working up to those types of activities. 

If you’re struggling with your donation form, start looking at another platform that can give you the test data you want to try. Form language, imagery, or usability are much easier to develop these days, particularly on the digital side, than they were 10 or even 15 years ago. Today, you can stand up a lot of great tech pretty quickly and get some answers around some of that data. 

Then, do some longer-term data analysis to look at lifetime value. Think on a three-to-five-year calendar. Many organizations tend to look quarter to quarter or fiscal year to fiscal year. They don’t take the time to consider the overall trend line and how they look at the lifetime value of their overall donor base. 

Those are the types of questions mature programs ask, so try to emulate those organizations. They say a good artist copies, and a great artist steals. Steal as much as you can from their learnings, conferences, case studies, that sort of thing. 

Erin Robertson: J.C., you made a ton of great points. To your point about starting where you are, figuring out what message resonates is so important. Also, use what you have. Use your email program to test what’s resonating and working. There’s no better platform for doing that. Start there and carefully plan out your tests, what you want to gain from that information, and what you’ll do with it moving forward. That’s a natural place to go. 

And then, as you said, dig deep into the data and look at what the impacts will be in one year, three years, and five years. That will give you the basis and help you make your case for where you want to test into — where you want to put your available dollars and make them go as far as possible. 

Also, continue thinking about a multi-channel approach, even if it means decreasing your budget a little across all channels. Don’t just strip out a channel entirely because donors are multi-channel now — that’s the behavior people have. So, make sure you’re not just stripping something out for the sake of taking that budget back. It’s important to do it strategically across multiple channels. 

Host: That speaks to a thought I had earlier when we were talking. So often, when we as people are faced with unexpected constraints, we tend to shrink into a fixed mindset. It’s this idea that you put the blinders on, and you’re not open to any other possibilities or creative decision-making because you can only focus on the limitations. 

What’s interesting about that is that when you’re in a fixed mindset, it’s difficult or almost impossible to think outside the box, be creative, and find solutions that may not be immediately obvious. A tone to part on here is that despite being faced with challenges, the more nonprofits can lean into seeing possibilities and opportunities as opposed to limitations, the more successful they’ll be. As in many examples you shared, people who make knee-jerk decisions will more often see negative consequences than positive ones in the long term. 

J.C. Bouvier: Being caught up in a tough situation can be an opportunity to change venues. Go for a walk, get out of your box, cube, or home office. I do some of my best thinking just walking around my little plot of land here. Sometimes, that can help alleviate some of that stress. 

Self-care is really important in these moments, and taking time for that is key to doing your best creative thinking. Your mileage may vary, but it works for me. I’d suggest that. 

Host: Looking forward, are there any other recommendations or takeaways you want to leave our listeners with today?  

Erin Robertson: Don’t be afraid to push back on some of the hard, high-level conversations you’re having. Many folks we work with daily have to report to people and then to the board. It’s easy to just take the orders and go implement them. But taking the time to make a case for what will happen in the long term is important. Don’t be afraid to push back; use your expertise and experience and show your ideas. While some of these investments may not pay off in the current or next fiscal year, they’ll have a longer-lasting effect in the long term.  

Do your analysis work, push back where you can, and lean into your expertise. That’s one takeaway I would push upon folks. 

J.C. Bouvier: These are also moments where there are opportunities for partnerships that you may not have considered previously, even within your own organization. If you’ve been thinking about talking to someone in your organization because they can add value to your program, but you’ve been hesitant, shake it off and go have that conversation. You never know what fruit may come from it. 

We tend to get caught up in our ways sometimes. It can be good to make some changes and push the envelope internally or with complementary organizations working in your space.  

Host: Yes, adding as much as possible to the collective knowledge pool is a key step. I also love what you shared about the marketing and development teams getting on the same page and sharing monetary resources and access to some of the decisions being made. For many of the nonprofits we work with, the ones where the marketing and development teams work in lockstep tend to see the most success. 

Erin Robertson: Absolutely.  

J.C. Bouvier: For sure.  

Host: Any last thoughts before we wrap up?  

Erin Robertson: It’s an interesting time to be working in the nonprofit space. Obviously, the word “unprecedented” comes to mind. There’s a great community of folks continuing to do meaningful work. Never doubt the importance of what you’re doing. 

Reach out to folks in the space, stick together, and we’ll all get through this time. Continue to do the important work you’re doing.  

J.C. Bouvier: Absolutely. Hold on to the mission. Try to lean into where the rubber meets the road programmatically and how you can best aid in the service of the mission. This is a good time to stay close to it.