No one last year could have fully predicted the impact that the economic storm is having on our nation, our world, and on Hawaii. For many businesses, surviving Economic Recession 1.0 (2008-2009) has meant paring down expenses to ride out the storm. However, the fundamentals that drive the economy are also changing, and the landscape will be very different for Economic Recovery 2.0 (2010 and beyond).

Business management that look for the economic 'reset' key will that it will bring them back to a past economic environment that no longer exists. Economic 'recovery' is more about re-inventing your business strategy than a return to the glories of years past.

Disruptive Opportunity
Many people and organizations shy away from change. Keeping the status quo, after all, involves less work. However, you cannot afford to do business as usual as there is nothing usual about the current economic environment. Your customers and, in the case of nonprofit organizations, your donors are changing, and you have to change to remain relevant and ensure you continue to meet their needs.

A shorter-term economic impact will change consumer behavior temporarily. E.g.: "We will pick up prepared foods from the grocery store instead of going out to a restaurant for dinner." A significant economic impact will create a new set of values and habits that will likely change consumer behavior more permanently. E.g.: "We will learn to cook different cuisines, and we will dine more at home because it brings the family together, and we can eat healthier." The decision to eat at home transcends the need to save money. As the recession continues, we'll see more permanent changes in consumer patterns, which in turn presents opportunities for savvy businesses. (When women began joining the workforce in droves in the latter part of the 20th century, it sparked a boon in the prepared foods and fast food industries.)

Understand your customers' needs
Businesses that recognize changes in consumer behaviors and priorities will reap profits in their Economic Recovery 2.0 strategies. An example of this is Marukai Wholesale Mart, a membership store that sells groceries and Japanese imports. Marukai recently conducted a successful promotional campaign that offered its members an opportunity to save as much as 50% off its already low prices. Unlike previous offers that promoted special items or a featured department, the promotion allowed members to save between 5 % and 50% off the price of any items of their choosing. Some Marukai members applied the savings toward selected premium items such as sake and seafood. Others chose to apply it to everyday staples. Regardless of what they selected, the make-your-own-sale preference-based strategy proved to be a win-win for the store and its members.

Consumers are already changing their spending habits and preferences since the recession began. The train has left the station, and smart businesses are offering innovative on-board services while gearing up for the time when it eventually emerges from the tunnel.

Consumer motivation is still a balance between the facts and logic, and the emotional drivers. In a recent study by Future Now group, emotional drivers account for 12 of the 25 reasons how people make purchase decisions. However, depending on the product and the customer's personality, the motivator may carry a totally different weighting. Understanding the relationship between your products (or services) and your customers is the key to a targeted marketing and sales campaign.

Understand donors' philanthropic capacity
Many nonprofit organizations experienced a rude awakening last year when the State of Hawaii began to cancel contracts. Meanwhile, participation in fundraising galas started to dwindle and, recently, some foundations that have dispersed multiyear grants have begun to review performance before grant completion. At the end of 2008, Olomana Marketing conducted a fundraising survey for the Aloha Chapter of the Association of Fundraising Professionals and found that many nonprofit organizations indicated they would pursue more direct support and major gifts.

Indeed, many organizations have reported that direct contributions have increased in the past few months-further demonstrating that Hawaii residents are some of the most generous people in the country. In some cases, the increased contributions have narrowed the gap in funding loss from other sources while a few have actually made up the variance. However, many professional fundraisers question the sustainability of the public's support as the recession wears on. The 'first-to-market' concept that typifies startups also applies to this fundraising environment. Those nonprofit organizations that reach donors aligned with their cause first will reap the rewards, while those that delay will find that donors may be tapped out later in the year.

This makes understanding the giving motivation of your donors even more critical. The Seven Faces of Philanthropy succinctly illustrates the seven motivations that drive giving. Your supporters may give because they are a Communitarian (someone who really wants to make a difference in a specific community); a Devout (where doing good is doing God's will); an Investor (who 'invests' for social outcomes); a Socialite (it is fun to do good with lots of other people); a Repayer (someone who responds to a personal life-changing experience); an Altruist (a rare genuine donor who gives without any recognition); or, a Dynast (giving is a strong family tradition).

Update your case
Whenever there are scarce resources, competition rises. While this may be less common among nonprofit organizations in Hawaii in the past, the competition for scarce funds will exponentially increase as the year progresses. If you haven't updated your case statement, it's time to do so. Make sure it is extremely relevant to the donor and there is an 'urgency' to the ask. What is your organization's promise and impact? What is the threat, and what is the hope? Revisit your 'propositional value' to your donors. Make sure they understand and appreciate the value of your programs and services, and all of the benefits. These simple strategies are time-tested and will be even more critical in a competitive environment.

It is important to understand your donor's motivations. Are they most interested in leaving a legacy? Do they want to make a significant difference? Do they desire recognition? Are they looking for socializing opportunities? Are they die-hard champions for the cause? Strong alignment between what your organization has to offer and what donors want is the key to effective outreach and fundraising.