Economic chaos is upon us; should fundraisers panic?

The stock market pretty much crashed last week. On news of Trump’s latest rounds of tariffs, the Dow fell by 1,679 points on Thursday, then fell another 2,231 points on Friday. The market lost more than $6.6 trillion in value those two days alone.

These eye-goggling numbers signal bad news for everyone, worldwide. And it is a major challenge for fundraisers. Because charitable giving usually tracks with the stock market.

A large percentage of your donors are living on retirement accounts, or are approaching the time when they will be. They’ve watched their account balances tank. This means they have less to live on than they did last week. For some, a lot less. In addition, many of your midlevel and major donors are in touch with their investments. Some will react by cautiously cutting back on donations. This is similar to what happened during the financial crisis of 2008.

It’s possible that some or all of that lost stock market value will eventually come back, but there’s no guarantee. And no turnaround in sight.

A drop in giving is almost certain. How deep and how long-lasting, we don’t know. But be ready.

And the market isn’t the whole story: Tariffs are basically a tax increase that targets lower and middle-income people the most. That could cause some donors to cut back their giving. Cuts to Federal programs mean thousands of federal employees are now or soon will be unemployed. Federal programs that do useful things for the economy have been erased. It’s not pretty for the economy. Or for charitable giving.

So go ahead and panic. But don’t make panic decisions for your fundraising.

The worst thing you could do right now would be to decide for your donors that they are not going to give.

If you do that, whatever pain is coming your way because of these outside forces will be much worse. And last a lot longer.

It might by easy to see fundraising as a cost center that’s easy to cut. The short-term pain of doing that is pretty low. It’s it’s the long-term pain that will get you if you do that. Fundraising is a revenue center. When you cut it, you get less revenue. And you damage future revenue because you not only lose donations — you lose donors. They lapse if you go silent on them.

This isn’t going to be easy.

Don’t make it worse by slashing your fundraising.