It’s baaaack: Double dip recession


My neighbor is the owner of Larry’s Home Maintenance, a small handyman business. He has been in business for approximately five years after getting laid-off from his IT job at Motorola. While Larry (pictured on the right) is our friend and handyman (yes, his work is awesome), he is also my “canary in the coal mine”.

When Larry’s phone stops ringing (like it did in 2008), I know the economy is in bad shape and a recession is either around the corner or it is already here. For most of 2011, Larry’s phone has been ringing off the hook. This isn’t surprising because when the housing market is in the toilet people tend to start pouring money into home improvement projects. On average, he has been receiving 20 phone calls per day.

In the beginning of August, Standard & Poor’s downgraded the United States’ credit rating and the European Union entered into another round of debt crisis discussions involving Greece, Spain and Italy. The future of the eurozone was called into question. When this happened a few weeks ago, Larry’s call volume dropped from 20 calls per day to approximately five. When I saw Larry yesterday, he said that his phone has “stopped ringing”. And he means that literally . . . potential customers have stopped calling.

Larry’s call volume is a lagging economic indicator. It accurately forecasted 2008 and I suspect it is doing the same thing now.

Every non-profit organization has relationships with a “canary in the coal mine” like Larry. They are called “DONORS,” and staying in regular contact with them will help you kinda/sorta predict the immediate future and allow you to take corrective action that might permit you to glance off of the iceberg rather than hit it head-on.

So, if you think Larry is “off his rocker,” you might want to read this blog post from yesterday’s The Chronicle of Philanthropy titled “Two-Thirds of Donors Plan to Cut Back on Giving This Fall“.

If you already clicked the link, read the article and returned to finish this blog post, then you know that 68-percent of survey respondents recently said they plan on cutting back their charitable giving for the remainder of 2011. While I am usually suspicious of “survey data,” the combination of Larry’s situation and The Chronicle’s story has me saying “Uh-Oh”.

Of course, there isn’t anything a non-profit organization can do to change this situation. So, the better question we should all be asking is: “What should we be doing TODAY to position ourselves for a double dip recession that minimizes the impact on our clients?”

I will use tomorrow’s blog post to look at a few options you might want to consider implementing. In the meantime, please use the comment box below and share what you are thinking and possibly planning to do. What are your donors telling you? Share your canary in the coal mine stories.  We can all learn from each other!

Here is to your health!

Erik Anderson
Owner, The Healthy Non-Profit LLC
eanderson847@gmail.com
http://twitter.com/#!/eanderson847
http://www.facebook.com/eanderson847
http://www.linkedin.com/in/erikanderson847
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About DonorDreams

Erik got his start working in the non-profit field immediately upon graduation with his masters degree in 1994. His non-profit management and fundraising experience numbers nearly 20 years. His teachable point of view around resource development is influenced by the work of Penelope Burk and those professionals subscribing to a "donor centered" paradigm. Donors have dreams and it is our responsibility to be dream-makers because donors are not ATMs.

Posted on August 25, 2011, in Fundraising, resource development and tagged , , , , , , . Bookmark the permalink. 1 Comment.

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